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Recommendations for Learning Accounting Basics

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Fox

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Hey everyone.

A goal of 2021 is to really dial in my business finances and cashflow.

I do have an accountant for the last few years (really good) but I still feel there is a lot I should/could learn to help run a business better.

I remember at the summit @MJ DeMarco was able to give a quick look at some financials on a slideshow and spot a bunch of trends/insights right away - those are nice skills!

Does anyone have any courses/books/programs they would recommend for learning a solid foundation in keeping business books and being able to make better financial decisions with a business?

Also would love to hear how anyone on here already learned these skills and any improvements they saw.

Thanks.

( I am based in Europe so it doesn't have to be super detailed to any one country - just general best practices. Thanks again).
 

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mbjay40

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Hey everyone.

A goal of 2021 is to really dial in my business finances and cashflow.

I do have an accountant for the last few years (really good) but I still feel there is a lot I should/could learn to help run a business better.

I remember at the summit @MJ DeMarco was able to give a quick look at some financials on a slideshow and spot a bunch of trends/insights right away - those are nice skills!

Does anyone have any courses/books/programs they would recommend for learning a solid foundation in keeping business books and being able to make better financial decisions with a business?

Also would love to hear how anyone on here already learned these skills and any improvements they saw.

Thanks.

( I am based in Europe so it doesn't have to be super detailed to any one country - just general best practices. Thanks again).
Have a read at Profit first by Mike Michalowicz . It might help bring more focus on the Profit instead of seing the business as Revenue - Expenses = Profit.

I really enjoyed the whole concept and cannot wait to bring in money in my business to start implementing this seriously.
 

Kid

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I haven't finish it but seems good for now (free and instant access):
 

Martin.G

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Financial Statements by Thomas Ittelson is a good book to read financial statements and understand how good is a business, it could help you.
 

CareCPA

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Once you get some basics, I would look at EDGAR, search for some companies you like, and take a look at their 10K and 10Q filings. These are their annual/quarterly SEC financial filings.
(Obviously this is US filings, but the principles are similar)

This will help you realize what part of the financial statements you don't understand, so you can focus on those areas with your learning.
 

Boyd

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Tom H.

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Last edited:

mon_fi

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I have a good summary of my accounting courses from university. I also have a kickass summary of my finance course (that all students from the master have been using for 2 years to pass the course).

Do you want them? I am kinda dumb with math, so I had to make them super detailed "slow" to understand the principles.

I can send them to you if you want. Let me know
 

cviji

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Dec 9, 2020
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Hey everyone.

A goal of 2021 is to really dial in my business finances and cashflow.

I do have an accountant for the last few years (really good) but I still feel there is a lot I should/could learn to help run a business better.

I remember at the summit @MJ DeMarco was able to give a quick look at some financials on a slideshow and spot a bunch of trends/insights right away - those are nice skills!

Does anyone have any courses/books/programs they would recommend for learning a solid foundation in keeping business books and being able to make better financial decisions with a business?

Also would love to hear how anyone on here already learned these skills and any improvements they saw.

Thanks.

( I am based in Europe so it doesn't have to be super detailed to any one country - just general best practices. Thanks again).
Hi Fox,

It is quite a broad area and there is probably quite a lot within the accounting space that is probably of low importance or interest. Based on what you've said I would perhaps look into watching some YouTube videos as a starting point, or head onto Udemy or Linkedin for some basic courses. Some areas you might want to consider would perhaps be:

1) Getting a basic understanding of the reading of financial statements of Income statement, Balance Sheet and Cashflow and how these fit/are connected together and what they are telling you

2) Leading from the above the ability to then assess metrics or ratios on the financial statements, understand what they mean which can then act as either performance indicators to manage against or as the basis for comparison across different companies. This is going to be things like:

- Profitability metrics (EBITDA, Gross Profit, Net Profit, Return on Assets / Equity etc.)
- Depending on the type of business you are running you will likely then have other ratios / indicators you would want to be thinking about for example things like customer acquisition costs & customer lifetime value etc.
- Working Capital or Liquidity/Cash ratios (Quick ratio, Inventory days, Days Sales outstanding, Days Payable outstanding)

3) Management of Cashflow, I would suggest this is largely not something you'd really need to 'learn' about as its largely common sense based and more down to having good practices and process and having an overall awareness of cashflow when making agreements / dealing with customers / suppliers and not being overly focused on sales, or profit'. There is a good saying: Sales are vanity, profit is sanity and cash is reality.

Depending on the complexity of this and your businesses cash flow requirements you may want some form of simple model to manage your cashflow, see impact of drivers etc. see point 5 below.

4) Investment Appraisal - Used to assess an investment proposal in financial terms, based on estimates of the future cash flows associated with a project or capital investment, methods:

- project payback – the number of years it is expected to take to recover the original investment from the net cash flows, OR rate of return - rate of return of a project is compared with a businesses return on capital

- net present value – a discount rate is used to convert future cash sums into their present day cash equivalents OR internal rate of return (IRR) calculation.

5) depending on the size and scale of your business, or if you are looking to obtain financing you'd probably want to next consider how you go about planning, modelling or forecasting your businesses financials but this would vary significantly in complexity depending on what you were looking to achieve from doing this process.

Thing to always remember is ask what are the actions that could be influenced by the insight you are gaining from your financials, without anything actionable you are not achieving anything .

Hopefully that makes sense or is of some help.
 

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SPM_ENT

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Have a read at Profit first by Mike Michalowicz . It might help bring more focus on the Profit instead of seing the business as Revenue - Expenses = Profit.

I really enjoyed the whole concept and cannot wait to bring in money in my business to start implementing this seriously.
This book saved my business after I was staring down 300k of debt and not much cash flow. After applying the teachings of the book I've been able to "set it and forget it" and I can focus on growing the business and using the money I have set aside to do so. Money is usually one of the biggest problems in a company and even in life/things like a marriage but I'm amazed at how easy it is when you get things in order the way the book explains. Highly reccomend.
 

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