Does your Checkbook Define You?

I have spoken with many people who believe that as long as they track the ins and outs of their cash flow, they are doing a good job of accounting for both their households and their small businesses.

First, I would like to applaud you for going through the process of tracking anything about your business, and particularly your cash movement because countless companies have neglected to “follow the money” so to speak, and they have found themselves with nothing left to track even if they wanted to.

Next, I want to remind you that there exists a set of accounting principles that are generally accepted by business practitioners and accountants alike that support the notion that there is more to a business than just its cash inflow and outflow.

Now, consider for a moment, your company. (Go ahead, close your eyes and take a deep breath.) Are you picturing a pile of cash? No? But what about all those people who have said, “As long as I track my cash, I am okay.” The mere mention of this phrase suggests that there is absolutely nothing more to your business than a pile of cash. Close your eyes and picture your business once again. What do you see? People? Buildings?

Inventory? Furniture? Customers? Employees? Cash, too? All of these people, places, and things you are envisioning make up various parts of your business. Clearly, there is more to your business than just its cash! So, why are you just accounting for the cash? Are the rest of these tangible elements worthless to you and your company? Then, why not account for them?

Keep track of the buildings that you have and the inventory, so that you know what is yours! Why would you want to know that? So that you know what is at your disposal to grow your business, which is your ultimate objective!

Julismiles (a.k.a., Juli A. H. Evans, CPA), Financial Relationship Expert, is the President and Founder of Julismiles, Inc., a Financial Edutainment Company. She is the author of Organized & Profitized, the eBook and Audio Book Series, and the author/editor of NumberByColor, the Edutaining Ezine.