Financial accounting is often referred to as “language for business”. It allows you to make better decisions, participate in strategic conversations, build and manage businesses, and understand the basic concepts and principles behind accounting.
You might be an entrepreneur who wants to join the 40% group of small-business owners who are “very” or “exceptionally knowledgeable” about accounting. Or you may want to change your career and become one of the 90 700 people expected to enter the accounting profession by 2028. Perhaps you are simply trying to gain a better understanding of the financial structure of your company and how it impacts your current situation.
Whatever your role or background, financial accounting can help you advance your career. These are the steps you should take to start your education.
Learn how to read and analyse three important financial statements: the balance, income, and cash flow statements. These documents provide valuable information about your company’s spending, earnings and profit as well as the overall financial condition.
The balance shows your company’s assets and liabilities for a specific period. This accounting equation illustrates the relationship between these components. It is used to verify that the balance sheet is balanced and correct. Assets should always equal owners’ equity and liabilities.
The Income Statement (also known as the Profit and Loss Statement or P&L) shows your organization’s revenue and expenses. It is usually on a quarterly basis.
The Cash flow statement lists all cash outflows and inflows for a given period. Each source and receiver of cash are listed on the cash flow statement.
These statements are useful regardless of your industry or role because they show the financial details of your company. This information can help you decide which investments and projects you want to pursue, and how you will impact your company’s profitability.
A solid understanding of the financial statements and their analysis will help you prepare for the more complicated principles of financial accounting.
There are many options for learning financial accounting. These include in-person classes and online courses. You can also consult colleagues or read accounting textbooks. Each has its pros and cons depending on your situation.
Online or offline courses might be the best fit for you. Here is a list with the top offline accounting courses available in Nigeria.
Whatever learning method you choose, make sure to spend plenty of time on your education. Accounting concepts are interrelated, so it is important to spend time learning about each concept before you move on to the next. Although it can be tempting to rush to learn more complicated topics, taking the time to understand them all will pay off.
Learn as a part of your daily routine. No matter where you are located, you can make steady progress towards your educational goals by completing your coursework at a regular pace.
Remember that financial accounting equations and principles are not meant to be memorized. The goal is application. Put your learning into practice as often as you can. You can also think about examples from your career. In order to make learning more meaningful, it is a good idea to apply equations and concepts to your own experiences.
Financial accounting is not something you can learn overnight. It requires you to apply the concepts that you have learned repeatedly. You will soon be able to recognize situations in your company where your accounting knowledge could be useful.
Connect with other professionals interested in financial accounting. As you improve your accounting skills, it is a great idea to be part of a group of dedicated learners. Your network might have faced similar problems to yours, so you can share your experiences and celebrate each other’s success.
Whatever your level of experience, financial accounting can help track and understand the performance of your company and make better strategic decisions. It can make a difference in your career and your company’s financial health by learning more about business.