5 Best Accounting Books for Small Business Owners

ByMilos Djurovic
May 20,2023

Is there a better way to get a handle on your finances than studying the best accounting books written by some of the most experienced people in the field?

Business owners need all the help they can get when building their company since understanding and implementing financial concepts such as record-keeping, budgeting, taxation, and cash flow management are known to be daunting.

To help you with that, we are briefly reviewing the 5 best accounting books for small business owners you can get right away!

5 Best Accounting Books for Small Business Owners

Every budding entrepreneur should read the books below to gain valuable insight into the art of managing money for maximum profitability, regardless of whether they have established their market presence or have just started their business journey.

1. Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine 

  • Author: Mike Michalowicz
  • Publication Date: July 4, 2014

With “Profit First”, Michalowicz offers a fresh perspective on accounting by creating a simplified system that puts profit at the forefront of any business plan.

Namely, this book introduces several methods of managing cash flow and expenses without sacrificing growth and profitability.

Profit First’s unique approach to financial management proves invaluable for small business owners looking to make sustainable changes in their businesses. 

Its pages reveal an effective method to tweak your systems and reach your profit goals while cutting costs, regardless of your industry or business size.

2. Accounting for the Numberphobic: A Survival Guide for Small Business Owners

  • Author: Dawn Fotopulos
  • Publication Date: September 3, 2014

Any business owner who has ever picked up Dawn’s book has quickly grasped the complex accounting topics as she outlines them clearly and concisely.

So, if you have ever felt overwhelmed and intimidated by all the accounting jargon but have no means to hire a professional accountant, this book will prove very resourceful as it offers a direct line to everything you need to help your business succeed.

On top of that, you’ll access plenty of practical examples to help you internalize the theory behind them and boost your confidence in the decision-making process.

3. Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports

  • Author: Thomas Ittelson
  • Publication Date: January 31, 1998

What’s a book older than 20 years doing on this list, you might ask?

Well, it teaches all the crucial and timeless accounting basics every business owner needs to manage cash and product flow properly.

In addition, “Financial Statements” is written in a straightforward, visual style that demystifies complex accounting topics with minimal usage of specialized terms.

This book offers step-by-step instructions on creating and interpreting financial reports and detailed real-world examples to help you apply those learnings.

With only a single read-through, you’ll understand all accounting concepts and how they help you define, manage, and measure your enterprise.

4. Small Business Financial Management Kit for Dummies 

  • Author: Tage C. Tracy and John A. Tracy
  • Publication Date: July 30, 2007

If you are an absolute beginner in any topic, the first thing you should do is pick up its “...for Dummies” book as it is written to help you navigate through a new and complex topic with ease—something that this specific book does very well.

The “Small Business Financial Management Kit” is packed with detailed tips and advice that covers most aspects of financial management, from creating budgets and managing your accounts to tackling taxes and maximizing profits.

The authors also go beyond explaining theoretical concepts: they offer practical strategies that can be implemented in any small business to aid financial management.

  • Author: Mark J. Kohler
  • Publication Date: April 28, 2015

If you are a business owner often facing tax and legal questions, you should get no book besides “The Tax & Legal Playbook” by Mark Kohler.

This all-encompassing resource offers clear-cut truths, valuable advice, and effective solutions that save your nerves, time, and money.

Even without reading the entire book, you can use it as a reference guide to quickly find the answer to all kinds of local, state, or federal regulations.

Some of the main topics covered by Kohler’s book relate to making the right business decisions, tax and legal strategies to save money, utilizing the right legal entities, avoiding legal scams, and protecting your assets for retirement.

Key Takeaways

  • Accounting literature helps anyone understand the essential accounting concepts and manage the finances of a business.
  • “Profit First” provides a unique approach to managing cash flow and prioritizing profitability.
  • “Accounting for the Numberphobic” simplifies complex financial concepts for small business owners who may feel overwhelmed by accounting.
  • “Financial Statements” offers a comprehensive guide to making informed decisions and understanding and creating financial reports.
  • “Small Business Financial Management Kit for Dummies” covers the basics of financial management, from budgeting to understanding records.
  • “The Tax and Legal Playbook” provides clear, actionable advice on navigating tax and legal challenges on a state and federal level.

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Creating and sending purchase orders (POs) can be daunting for inexperienced business owners. For some, it can be hard to keep track of all of them as they pile up, while others stress about filling these important documents flawlessly to ensure smooth order processing. Thankfully, there is software available that can help manage the entire process, from start to finish. Businesses can leverage technology to create and send purchase orders quickly and accurately. These systems often come with additional features such as automated reminders, tracking capabilities, and more. Our article will answer all your PO questions - e.g., What is a purchase order? Why are they important? How do they work? - and teach you about the various ways businesses use purchase orders, as well as how to create and send them yourself. Purchase Order Definition So you've heard the term many times and are wondering, “What is a PO, exactly?” In a nutshell, a purchase order is a legally binding contract created by a buyer to communicate a seller's demand for goods or services. It is generated after the buyer and seller agree on the terms of sale, such as pricing, quantity, delivery date, and payment terms. The PO serves as a formal record of the details of the transaction between the two parties and can be used as a reference in case of any disputes. POs are typically used for business-to-business transactions and can be sent electronically, via fax, or by mail. A complete PO will include all relevant information, such as vendor details, product/service descriptions, prices, delivery methods, and payment conditions. Once it is received by the seller and accepted, it becomes subject to the terms both parties must abide by. The Role of a PO in Business POs are created anytime you need to buy anything from a vendor. For example, if a company needs to buy 500 chairs for an office renovation project, it would place an order using a PO system. This ensures both parties have clear documentation outlining the specifics of the transaction. The purchase order system is essential to any successful purchasing process and helps ensure goods and services are delivered on time and per the contract terms. It also allows companies to track their spending more accurately and helps them budget accordingly. Having a purchase order system in place also ensures better communication between buyers and sellers and eliminates any confusion over what has been ordered or agreed upon. This ultimately leads to more secure transactions with less risk of misunderstandings or legal action from either side. Why Is It Important to Have a Purchase Order? Imagine you are a business owner who has just been handed a PO from a potential new client. You've never seen one before, so you're not sure what it is exactly, but you should learn how to use it. Here are some reasons buyers should know the ins and outs of POs: To make sure they’re ordering the correct items To make sure they're getting the best price possible To make sure the order is correct and can be delivered on time To keep track of buyer and vendor expenses To make sure buyers are within budget By taking the time to learn more about this vital tool, business owners can streamline their operations and improve customer satisfaction. How do POs Work? A PO is essentially a document sent from a buyer to a seller, stating the products, quantities, and agreed prices for goods or services the seller will provide to the buyer. It also serves as an offer from the buyer to purchase those products or services at the given price. The PO serves as legal protection for both parties, and it must be approved by both before any transaction can take place. Once a purchase requisition form is filled and accepted, buyers are protected from price increases or ordering errors, as all costs and terms must be clearly stated in advance. The supplier typically then sends an invoice to the buyer, which contains all of the same information as the PO. This invoice signals that the order details have been finalized and are ready for payment. Once payment is received from the buyer, it signals that all obligations regarding the PO have been completed. How to Create a PO in a Few Easy Steps Log into the company’s procurement system or software and find the purchasing order form. Fill out the PO with all the necessary information, including supplier contact info, item name, description, quantity required, unit price, total cost, payment terms, delivery terms, and expected delivery date. Once you've completed the order form and double-checked all your entries for accuracy, submit the purchase order request to management for approval. Obtain a signed copy of the approved PO from the purchasing department manager before sending it to your supplier to ensure both sides have agreed on all of its contents in writing. Forward an electronic or hardcopy version of the PO to the supplier. The supplier will confirm receipt of the PO and provide an estimated delivery date for the requested goods or services. When the goods or services arrive, check that they match what was ordered and submit payment according to the agreed-upon price. Following the purchase order process will ensure that you have a complete and accurate record of all purchases made by your purchasing department. This information can be invaluable in helping your company better manage suppliers, negotiate more favorable contracts and stay compliant with relevant laws and regulations. 10 Tips for Using Purchase Orders Effectively Planning: When issuing a purchase order, it's important to allow enough time for the supplier to fulfill the order and anticipate any delivery delays. Pay attention to detail: Make sure that all information on the PO is accurate and up-to-date, so there are no misunderstandings between you and your supplier. This includes pricing, payment terms, shipping details, product specifications, etc.  Stay organized: Keep track of all POs issued by organizing them into folders or using filing software such as Excel or Quickbooks. This allows you to quickly locate a PO if necessary and also helps with budgeting and accounting tasks. It’s also easier to rely on legal protection in case of disputes if you can easily locate all relevant documents. Follow up: If there are any discrepancies with the PO, address them immediately. This will help ensure that everything is done properly and promptly.  Use the latest technology: Automation tools such as PO software can help streamline the process by automating many of the manual tasks associated with issuing purchase orders. This can save you time and money while ensuring accuracy and efficiency. Negotiate terms: Don't be afraid to negotiate payment and other conditions that may benefit both parties involved in the transaction. Establish relationships: Good relationships with suppliers are vital for ensuring future success with purchase orders. Open communication and following up on time can go a long way toward achieving your business goals. Monitor performance: Make sure your suppliers are fulfilling their obligations according to the terms of the PO. Doing so will help you identify any areas in which improvement is needed or where alternative suppliers may be necessary. Stay compliant: Staying updated on applicable laws and regulations when issuing purchase orders is essential for remaining compliant with local, state, or federal laws. Familiarize yourself with all relevant rules and make sure that all of your purchases follow those rules accordingly. Leverage data: Analyzing the data associated with your purchase orders - be they on the buyer or seller side - can help you identify opportunities for cost savings, streamline the buying process, and improve supplier relationships. Bottom Line Using POs effectively is an essential part of any successful business nowadays. Following a strict purchase order process can help your business save time and money while ensuring accuracy and efficiency.  For example, a PO system for a small business uses automation, and tracking data from your POs can also provide additional insights and help you make more informed business decisions. By following this guide, you will be well on your way to using purchase orders effectively.
By Bojan Jovanovic · November 28,2022

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