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Whatever your responsibilities are in your business or organization, you need accounting skills to perform at your best. If you are in sales, you learn your product’s features and how to show them to buyers. Those features include the cost or value proposition and how it affects your customers’ buying decisions.

Marketing managers study how to find and appeal to a product’s target groups. Working up price points can mean some detailed cost analysis. Production managers learn how to plan workflow to control costs. Senior managers use financial statements to speak to those outside about their business’s prospects. Whatever your management level, you need to know accounting because your decisions will often be determined by “the numbers.” That is how managers keep score and are graded.

Every business asks three key questions:

• How much money came in?

• Where did the money go?

• How much money is left?

The answer to each question can come only from the practice known as accounting. Like other practices such as medicine and law, accounting has its own vocabulary. In many ways, accounting is the language of business. You’ve heard the saying that nothing happens until someone sells something. After that sale, accounting takes over as the basic activity of business.

Many manager and professional confuse bookkeeping and accounting. They think that bookkeeping is accounting. Bookkeeping is the act of recording transactions in the accounting system in accordance with some distinct principles. Accounting is the way we set up the  system, the principles behind it, and the ways we check the system to make sure that it is  working properly. Accounting ensures that bookkeeping is honest and accurate and, through financial accounting and management accounting, it provides people outside and inside the business the picture they need of where the company’s money is.

That is just one thing. You can actually loose many huge opportunities if you can’t read reports from an accounting system. Because they will let you do the following things much more easily.

- Find errors from transaction record.

- Plan for the future. When to borrow money and what work to do to improve your business etc.

- Stop fraud and theft. If you know your business and your books, you can find out if people are cheating.

- Make taxes easily. If you have just a checkbook and shoe boxes full of receipts, tax time can be a nightmare. It can actually cost less to keep good books all year than to clean up the mess just for the IRS.

There are many things you can do if you understand accounting. Get yourself some decent accounting references, and reap the benefit from your knowledge.

Among other references, [http://www.accounting4manager.com]www.accounting4manager.com is specifically intended for manager and professional to help them understanding accounting.

Article Source: http://EzineArticles.com/?expert=Narendra_Dewayanto http://EzineArticles.com/?Why-Managers-and-Professionals-Must-Understand-Accounting&id=825009