Debunking The Accounting Myths

My first accounting professor - Prof. Freddie Valliant - taught me in my first summer at University. He was a white guy with a strong Jamaican accent. He is probably the only person on earth who could make accounting "fun". Yes, I said fun and I stand by it. His class was always memorable as he ran us through the basics of accounting. When someone would ask him why does it work this way or why do we use such fancy names he would simply reply "so that accountants can feel good about themselves".

Any accounting class I took after that showed me how spot on he was. It was nightmarish and made me happy that I wasn't majoring in accounting but in Finance. I personally have always wondered why there are so many rules, why there are so many different ways to classify money you spend, why small businesses have to pay so much and spend so much effort to basically report how much money they made last year. I mean if someone lines up 10 small business owners (and I'm talking 3 employees or less) and asks them how much money they made that day or that month, they'll probably know off the top of their head. They'll also know how much they spent and what their biggest expenses are.

Yet complying with the various reporting criteria is another issue. According to the USBA, very small firms with fewer than 20 employees annually spend 45% more per employee than larger firms to comply with federal regulations. Does that seem right to you?

With only 31% of newly established businesses surviving past 6 years isn't it time that some of the accounting myths get debunked and a simplified reporting method be created for micro businesses?