3 ms·
my two cents - bookkeeping (the act of doing all the transactions that result in financial statements) is quite boring, but at the end of the day the purpose of
by cascom 5y ago
my two cents - bookkeeping (the act of doing all the transactions that result in financial statements) is quite boring, but at the end of the day the purpose of accounting is to provide information around the financial condition and results of the business, which it turn is and should be used to make decisions around the future of the business.
Accounting (in its various forms (financial, cost, mgmt, tax)) should help you answer questions like: what is our most profitable product? how much does it cost to make that product? was that acquisition/investment successful? sales are going up and net income is positive, why don't we have any cash?
But when you get under the hood, there is a lot of subjectivity around how to make accruals, allocate revenue and expenses, or capitalization policies.
Furthermore, many people in different organizations are incented on financial metrics (sales, EBITDA, EPS, equity value, etc) and as such have are keenly focused on gamesmanship around the calculation of those numbers.