What is accounting and why does it matter for my MSP? Well, it matters for four reasons:
Accounting is a shared language. It’s a language that people understand a standard upon which you can talk about the health of your business as it relates to the financials. And people that are looking at that information can understand it, because there’s a set of standards and rules.
Accounting is important is for transparency – transparency for your employees, or for your investors, maybe for an acquirer, and also for yourself to give you confidence that the data that you’re looking at accurately reflects the performance of the business.
Third, is credibility. Credibility is a demonstration to those who have a vested interest in your financials that you are holding to a high enough standard to represent your financial information in a way that demonstrates rigor. Think about equity investors in your business or debt investors if you’re trying to get a line of credit. Or maybe most important for you, an acquirer of your business. When they look at your business and want to see the financials, they will say, “Oh, this is somebody that really has taken care to make sure that the data is accurate.”
The fourth reason that accounting matters is confidence. Cconfidence for you. It’s confidence in knowing that you’re looking at a set of financial information that sufficiently represents the intrinsic value of the business that you’re building.
So again, a four reasons why accounting matters. It’s a language, transparency, credibility, and confidence.
Have a great day.
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