Why accounting is so important for entrepreneurs

Why I should care about accounting. So the goal today for this video is to explain
how you can manage your money, maximize your deductions (so save your money) and how to
make money. So the first reason that you’re doing accounting
is to figure out how much you owe in taxes. And the reason is is because if you didn’t,
weren’t paying taxes, maybe you wouldn’t be keeping track of your finances anyhow. So that’s number one. It helps you calculate your taxes. Next, it’s a way to track your deductions,
also known as write-offs. So the income is all tracked, mostly through
the IRS through 1099 income and other forms of reporting. But the part that the government doesn’t have
are your expenses and your expenses are what’s going to reduce your taxes. Because the taxable part is the net income,
which is revenue minus expenses equals your net income, which is your tax base. Lastly, my favorite is a better understanding
of your cashflow. And so what having a better understanding
of cashflow will mean to you is that will help you with your goal-setting, reducing
stress at tax time. And just possibly helping you drive your business
and figure out that right level of business. So whether you want to just go right out of
the gates, if you want to go slowly or if you want to take a break, you’ll be able to
figure this out by caring about accounting.

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