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The Importance of Accounting

Although accounting caters more to the business world, it applies to everyday life with budgeting, it's installed after the accounting process.

Records going back thousands of years, as far back as the Mesopotamian era, of ancient civilizations using accounting and budgeting to keep track of crops and cattle. During the Middle Ages, accounting and budgeting were used to keep track of exchanges of currency and resources. Today, accounting and budgeting have become a vital part of the business world and everyday life.

Accountability

Accounting and budgeting are essential to owning a business. If the money coming in and out, is not being tracked properly, future performance issues and legal problems could arise.

Suppose business owners and businesses have a clear and concise history of expenses, revenue, profit, and other accounting details. In that case, it will help investors understand whether they want to incorporate themselves into the business. Suppose the “books” look wrong or the numbers are off. In that case, it shows the company is either legally shady or not taking proper care of its finances. This may signal to investors and sponsors that the company is not one to be associated with. Being transparent and organized goes a long way from the macro scale of sponsors and investors to the micro-scale of how a person handles their personal life. 

Although accounting caters more to the business world, it applies to everyday life with budgeting, it’s installed after the accounting process. Financial freedom and independence are something that almost every business owner and person wants to achieve before their physical life comes to an end here on Earth. However, one of the best ways to reach those financial goals is to budget appropriately. 

Everyday Expenses

The “everyday” expenses that need to be made are services and products such as electricity, insurance, food, housing, etc. These are essential aspects of our lives that almost automatically come out of our pockets and are not given a second thought. Because things like car payments, loans, and groceries require a considerable sum of money every month, it is essential to understand how much money needs to be put aside for those payments and how much you will have left over.

Budgeting

Understanding that the “micro” services and products of creating and following a budget can lead to the growth of the macro side of budgeting and the goals we are trying to achieve. Those things include holidays, retirement, emergencies, etc, which are all aspects of life that should be valued but are not. In America, about 20% of people have nothing saved for emergencies or retirement, which means that any want of a holiday will have to be on a loan and obviously will have to be paid back with interest. It just proves that there is a lack of education, knowledge about budgeting, and care for the topic of money when things like retirement and emergencies should be a significant financial objective.

Accountants Can Help with Your Budgeting

The team at Intentional Accounting wants to ensure that our customers understand the value of money and budgeting as much as accounting.

If we can help anyone save some money, time, and mindset, then we have helped at least one more person try to achieve their financial goals as a team. Anyone can budget with a bit of time, a Google search, and an Excel sheet. So please do not hesitate to contact us. It is always possible to start on your financial goals and dreams!

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Michael Callahan

CEO of Intentional Accounting

Financial Advice

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