Friday, October 23, 2009

The Importance of Accounting

I see far too many businesses and startups minimize their accounting investment. An accounting system should be a strategic asset, yet it works more like an anchor or a sinker for many organizations because they don't understand or appreciate the value of a strong accounting system.

There was a great story recently on some financial problems at the Bicycle Transportation Alliance (BTA). It seems they didn't know what was going on and they ended up with a series of errors that left them showing a nearly $100,000 loss on $1.3 million of revenue. They weren't aware of the problems because their books weren't in order.

I'm a founding member of the BTA and appreciate all their hard work and advocacy on behalf of biking. I'm not picking on them but just want to show a real example of what can happen when your accounting system fails.

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