| Most business owners have a terrific, on-going, | | | | money. If you can control the money, then you |
| love-hate relationship with their accounting system | | | | can control your financial future. |
| or its software. The reason for this, in my opinion, | | | | Planning how to get in more income and |
| is that accounting systems actually have a | | | | implementing those plans is essential for everyone. |
| dangerous little betrayal mechanism built into them | | | | Nothing stays stable for very long. It either goes |
| that is secretly masked as something that is | | | | up or goes down. Income is at the mercy of this |
| "supposed to help you." | | | | natural law. An individual or company has to |
| What is this betrayal? Accounting systems cannot | | | | continue to push income up, while cost of living |
| tell you how to manage your money to your | | | | increases, rising prices and taxes eat away at |
| best advantage. They only tell you, after the fact, | | | | income growth. |
| if you did well or made mistakes. This means the | | | | To be profitable and create wealth, reducing |
| agreed-upon financial system that we rely on to | | | | expenses so you are operating within your |
| help us, only has the ability to tell us what | | | | income is sometimes necessary. But, be careful |
| happened in the past - not how to handle our | | | | to makes sure you don't cut expenses in areas |
| money in the future to fix money management | | | | where it would reduce your ability to produce |
| mistakes and get better results. | | | | income. Careful spending on items that bring more |
| You might think the subject of accounting seems | | | | money back in than was spent is the goal for |
| complicated and mysterious. Accounting is simply | | | | responsible financial planning. |
| recording what occurred after money came into | | | | Many business owners make the mistake of |
| a company or a household. It keeps track of how | | | | cutting back on marketing and promotion when |
| much money came in and where that money | | | | that is the only way they will get in a constant |
| was spent; pure mathematics, no thinking | | | | flow of new and repeat customers. Using existing |
| involved. | | | | cash and resources in a way that prevents waste |
| Any standard accounting system is actually a look | | | | and generates more income is vital. All of these |
| back into the past. It tells you how much was | | | | actions require planning before doing. That is |
| made or lost, and how much money is currently | | | | operating in the future. Thinking is definitely |
| owed. While this is important to know, it can put | | | | required. |
| the company or individual in a position of being | | | | Where did all the money go? Your accounting |
| controlled by the money - always making financial | | | | system tells you that. |
| decisions based only on how much money is left | | | | How much money will be coming in? How can it |
| in the bank. | | | | best be used to increase the long term survival |
| On the other hand, financial planning is done by | | | | potential of a household, company and the |
| looking toward the future. Planning occurs BEFORE | | | | individuals in the group? The answers to these |
| the money comes in and BEFORE it is spent. This | | | | questions require frequent, consistent, and careful |
| puts the company or individual in control of the | | | | financial planning and money management. |