"I’m just not any good with the finance bit!"
It’s a common sentiment among many of the business owners I meet.
In many cases, when they then start talking about some of the issues they are facing they clearly have a great grasp of how the finance bit affects their business. Granted, they might not know the correct technical terms or finer details. But who cares! They understand their business!
There seems something about accountancy that makes it seem a little unapproachable, a little too difficult to understand. But what makes adding things up so complex?
One of the main barriers seems to be the words used. Too much jargon is an accusation often used but is it justified?
Terminology versus Jargon
Terminology: special words or expressions used in relation to a particular subject or activity
Jargon: special words or expressions used by a profession or group that are difficult for others to understand
Think of any activity or hobby and you’ll be confronted by all sorts of new words. They are needed to clearly and simply convey ideas. To make life easier and save time.
At first, these new words might need to be explained. After which, they should help make things more understandable. Effectively turning what was jargon into terminology.
However, it is this clear explanation that is crucial.
Why avoid accountancy terminology?
There does seem to be a general push to make accountancy more accessible which is fantastic.
Much of the software on the market seems to be focusing on becoming more usable and easier to understand.
However, there also seems a trend to ditch accountancy terminology. Introducing alternative words instead. But, doesn’t this just create confusion?
You may find yourself, reconciling, allocating, matching, or explaining your transactions depending on what software you happen to be using.
I’d argue that this doesn't solve the problem.
Embrace the Language of Accountancy
(well, maybe just a little)
"Accountancy is the Language of Business" – Warren Buffett
You don’t need to understand every accountancy term that there is. Most will be irrelevant for your business anyway. But, there’ll be a handful of words that could help you understand things a bit better.
I'd encourage you not to shy away from the terminology used. If ever your accountant uses a word you don't understand - ask. It's probably only the odd one here and there.
Once you've got to grips with a few terms you'll be better equiped to discuss your finances and start feeling more in control.
So, what terms and concepts confuse you?
Let me know in the comments and I’ll see if I can help…