[fefifofu]

I'm in the "definitely do not learn bookkeeping" camp. Even to many accountants, bookkeeping is different than accounting.

Bookkeeping is the data entry of accounting - degree or professional designation are not required.

Accounting is taking the data and trying to reflect an accurate story to the financial statement reader - the data visualization.

Finance folks are readers of financial statements, where you interpret the data viz to make decisions. Business owners should be readers too. The decisions regarding working capital, capital structure, budgeting, etc. are the important parts. Not debits and credits.

It does help finance and business owners to learn accounting, but bookkeeping is a step too far - especially when there is many other higher priority things to learn. To put it in a tech analogy: a Python dev could learn C to gain a better understanding, but assembly is step too far.

[tryitnow]

I disagree. And I agree. What I disagree with is that you shouldn't learn bookkeeping. I agree that you should learn accounting.

The problem is that you do need to know the basics of bookkeeping to learn accounting.

And seriously, learning bookkeeping takes maybe one or two weekend and you will use what you've learned the rest of you business and professional life.

If you can't commit at most two weekend of your life to something as important as the basic building blocks of finance and accounting, then you probably shouldn't consider running your own business.

And yes, bookkeepers and accountants will cheat you. The stories are numerous. And the marks are always executives and entrepreneurs who never bothered to learn bookkeeping and accounting.

Finally, basic bookkeeping knowledge (as expressed in this tutorital) is crucial for making informed evaluations of accounting software (which is honestly going to do most of the actual 'bookkeeping' for you).

[fefifofu]

Bookkeeping is the wrong place to start learning the basic building blocks of finance and accounting. It's too detailed and step-oriented. You should start at the high-level of reading financial statements and dig deeper as you go. Try to see how financial statements flow by using everyday concepts.

If you are trying to spot mistakes an accountant made, you won't spot it by going through accounting entries. If you are trying to see how your business is doing, you won't know from knowing debits and credits.

You can spot an accounting mistakes or see how your business is doing by comparing the financial statements to what you are seeing in the business in real life. "Why is my net income look great, when the cash in the bank is so bad?" Or, "why does my cash in the bank not match the cash in the financial statement?". By asking these questions you learn accounting much more effectively. And your accountant should be able to explain that to you convincingly and in detail - if not get a new accountant (In fact, it is best practice for corporations to switch accountants every 4 years or so to catch mistakes).

[rahimnathwani]

The accounting equation, and theory underpinning book-keeping, is the right place to learn about accounting. But this is literally an hour's work.

I agree that you don't need to learn how to 'do book-keeping', in the sense of knowing your way around the UI of some specific accounting software.

But, unless you spend that first hour, you will need a lot of explanation from your accountant in order to understand why income != cashflow. If you have spent that hour, then your accountant simply needs to tell you: "your 'accounts receivable' went up, as you haven't converted those invoices you issued into actual cash". Actually, they wouldn't need to even tell you this, as it would be obvious from the balance sheet.

[crixlet]

This comment was immensely helpful. Thank you.