1. WHY LEARN ACCOUNTING?
What is accounting, exactly? In the simplest terms, accounting can be defined as: Tracking the movement of Money In and Money Out of a business.
Accounting simply “keeps the score” of a business.
Three Reasons Why Accounting Is Important to Business Owners…..
1.Taxes can be up to 50% of your income. Accurate accounting records go hand in hand with good tax planning. There’s too much savings in this area to be in the dark.
2.If you don’t have some oversight of your business accounting, you are WIDE OPEN to theft.
3. Tracking your business’ success is fun. A basic understanding of accouning rules will help get the most out of your business.
If you are still not convinced…here a several more reasons why an understanding of tax and accounting rules are valuable to business owners…
- To communicate better with your CPA, Bookkeeper, and other business professionals
- To strategize at every level
- To accurately track the return on your investment
- To minimize errors
- To access Real-time information
- To build accurate Financial Ratios & ProForma calcs
The following links will help you appreciate why Accounting and Tax knowledge is crucial to your success as an entrepreneur.
Here is a blog playing the devil’s advocate with great feedback. Short, but should help enhance your appreciation for the importance of an minimal accounting education.
Tax & Accounting for Real Estate 
11/30/2009 at 5:29 AM |
Accounting is important to me because it helps to minimize my tax exposure. Good accounting allows me to be eligible for lower taxes.
12/07/2009 at 7:42 AM |
Having talked to previous students of the program I can see and appreciate the critical component that accounting makes up within the development process. Knowing even just some basic principles I can already see how accounting procedures can have ramifications in not only the type of business (LLC, C/S-Corp, Sole Ownership) but also can be incorporated into other facets of the development process. Such as allocating gains and losses from projects into specific percentages as part of a partnership agreement. It seems that we are amassing a set of tools that will hopefully help us be able to develop project. And to that end I can see the accounting process as another tool and not just a tedious chore.
12/07/2009 at 5:46 PM |
Why learn accounting?
For me what I know so far about accounting, it is use to track the money.(where does it goes? what is your expense? And the value of money or property that you have). From my point of view, I think it is very important to learn accounting because you can use money carefully and know where and what are you spend for. Furthermore, to know accounting and taxes, it can help you to save your money or somehow you can avoid taxes ( is it illegal).
12/07/2009 at 10:22 PM |
I believe it is one of the crucial building blocks that will help each of us toward our development goals. I find such topics as how depreciation can limit the amount of income taxes that one owes to be facinating. Learning to work the system within it’s legal constraints will only better our knowledge along with our wallets.
12/08/2009 at 10:49 PM |
In addition to all the great reasons mentioned above in the article and the comments from my classmates, the appreciation for accounting should begin at the most fundamental level. Why start a business if you or someone in your company can’t account for the money? I’ve known some Architectural firms who have gone out of business due to the lack of understanding of accounting. It had nothing to do with their design capabilities. On the contrary, they were all good Architects….unfortunately, they just concentrated more on the design half of the business instead of focussing on the whole business including the accounting half.
10/09/2010 at 12:46 AM |
I find it interesting that there is so much emphasis to minimize the taxes we pay. Of course it’s natural to want to retain as much of our income as possible, but don’t taxes pay for all the necessary infrastructure that the government affords us in society? Oh, wait a second… that’s right, half the politicians in government are corrupt and misuse our tax dollars for their own gain (after all, our taxes pay their wages, right?) So the question becomes… if no politicians were corrupt and all our tax dollars went to tangible improvements and maintenance of our necessary infrastructure, would people start becoming less adamant about reducing their tax payments, and rather pay them without a sense of getting screwed over by the government? Well, maybe after they stop spending our tax dollars on overseas warfare.
10/10/2010 at 1:45 AM |
On the topic of government and tax spending, although we all may have varying opinions on a range of topics concerning government spending, I think we can all agree that our tax dollars not put to good use a majority of the time. Yes, half of the politicians in office may very well be corrupt, but that also means that the other half are sincerely doing their best for the general public. My opinion is that as long as the government provides us with tax breaks and benefits, it will always be in our best interest to seek them out to make our businesses run efficiently. Better decision making by the government is not going to happen by giving them more money.
10/11/2010 at 5:36 PM |
Why Learn Accounting? From our first class session it has shed light on many great topics that I have been scratching my head over. Why would I want to give 55% of my income to the government. Funk that. The topics of how to make good spending choices become deductions to pay less taxes in the end. Also bring my business back to show a bank a four year history which reinforces creditability. This is going to be a great learning opportunity. Thank Akore for giving us such straight forward explanations. On the topic of government spending…that is just FUBAR. We have to minimize impact and payment so that we can invest back in our project because that is truly a dollar for dollar impact to us the citizens. Without a class such as this I would be clueless. Thanks again.
10/13/2010 at 6:23 PM |
Since everyone has to pay taxes everyone should know how it truly affects them and their dependants. Any strategy towards offsetting the 50% income tax is immensely valuable. On top of this factor, even more money could be lost by greedy accountants or book keepers. Any sort of defense or strategy provided by this course could potentially be worth thousands someday. I am very grateful for this opportunity to learn all the necessities regarding taxes and accounting.
10/28/2010 at 8:24 PM |
this is a great blog, thank you akore.
i find it really interesting that as architects we are used to concepts related to making buildings function more efficiently, but not so used to the concepts that make businesses and their related profits function more efficiently for the stakeholders.
regardless of our individual outlook on taxes/government or the changes we would like to see to the system, we need to respond to existing tax law the same way we respond to any other existing condition that we encounter as architects. we need to design (in this case designing our finances) in a way that maximizes opportunities. understanding the existing tax law and its impact on our business is the first and most important step in this process. thank you for helping us to take this step.
10/29/2010 at 10:17 PM |
It’s pretty overwhelming to think that as future developers and self-employed professionals, we could be paying up to 55% taxes. This alone is reason enough for me to want to learn about accounting and learn how to control and manage the financial system. It definitely makes sense to at least have a basic knowledge of accounting if we are going to be architect developers. Similar to when it comes to designing our buildings; we do not have to be licensed structural engineers, but we do have to have a general understanding of building structures in order to be good and efficient architects. Really looking forward to learning more about accounting.
11/18/2010 at 5:11 AM |
In my perspective, accounting is more or less like one of those things you must do in order to find success. Knowing your outgoing and incoming investments and gains in a certain project, gives you an understanding of what you can or can’t do, should or shouldn’t do in your future project. As my previous colleagues mentioned, being self-employed comes with a variety of disadvantages, yet there are advantages that can be found and would come in handy understanding the financial system. The economics side of architecture, is what architects lack the most of, and I am glad our class throws it at us in such simple ways.
07/21/2011 at 2:48 AM |
Understanding accounting and tax laws will definitely help in with my future investments business ventures and purchases. being ahead of the game is always important.
10/10/2011 at 2:50 PM |
I have been in the accounting profession for many years and my specific objective for this class is to learn more about the current accounting tax issues as they relate to real estate and rental transactions and yes to implement any legal measures that may minimize taxes. My goal is to have a comprehensive understanding of the current tax codes and accounting procedures that will benefit both my personal and professional lives.
01/29/2013 at 8:44 AM |
The old man was an entreprenuer who started his business in the basement and aimed high. His sons, overly educated looked at things thru totally different set of tools and terminology.
Who needs who?
The dad is the business driver and his sons need learn to communicate at thier fathers level, understand the business THEN provide sound advice for managing capital resources to track and improve profitability.
The point isthat people know what they want to do, accountants and tax advisors show them the ways to be successful and maximize resources.
The dad did it on his own….yet maybe, he could have gone further or saved more money for other fun things besides tuitions galore!
01/23/2015 at 6:00 PM |
Hi there – the link to the blog cited is no longer active.
07/09/2015 at 5:28 PM |
I have been working in corporate accounting for a long time. I just got involved in doing real estate accounting and need to sharpen up my skills to make sure that I am staying on top of the knowledge base.