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Many new small business owners rely solely on their bookkeeper or accountant to explain their financial statements to them. Although nothing can replace the advice of a skilled financial advisor, having a basic understanding of important business accounting concepts can give you peace of mind and confidence you’re making the right decisions in your business. That’s where the best accounting books for small business can come in handy.
Now, the easiest way to gain this understanding is by reading accounting books—but which books should you read?
Hundreds of the best accounting books for small business are available—and they range from financial accounting books, management accounting books, accounting principles books, and basic accounting books if you’re starting at square one.
New accounting books are being published at an astounding rate, but not all of these books are well written or easy to read. To help you avoid spending your money—and your precious time—on books that might not be of value to you, Fundera has compiled a list of the eight best accounting books for small business owners.
Our list includes a mix of classic technical texts, as well as more contemporary, conversational books, all of which will get you up to speed on the most important accounting concepts necessary for your business and how to leverage them to increase your bottom line.
Are you convinced there is nothing simple about numbers or accounting in your business? Are you at a loss as to how to start using your financial statements to run your business? Have you ever had anyone tell you paying taxes is a good thing and thought they were pulling a prank on you?
Greg Crabtree has more than 30 years of experience as an accountant and is clearly fluent in the language of accounting. However, that doesn’t mean he hides behind industry jargon in his book. Instead, Crabtree uses practical examples and step-by-step instructions to use your numbers to guide your business to profitability, which is why “Simple Numbers, Straight Talk, Big Profits” is our first pick for the best accounting book for small business. Crabtree also throws in a good measure of tough love to help business owners take decisive action with their finances—a skill every small business owner should learn. For free resources to support the teachings in the book, go to the Free Tools section of his website and accounting blog, simplenumbers.me.
You’ll need to have a basic understanding of how your financial statements (profit and loss statement, balance sheet, and statement of cash flows) work together to fully understand some of the later chapters in “Simple Numbers, Straight Talk, Big Profits.” If you need a primer on this, check out the number 2 and 3 basic accounting books picks on our list for a more thorough breakdown of these accounting principles.
Do numbers scare you? Have you ever found yourself making excuses to cancel your meeting with your accountant because you just don’t understand your financial statements? Are you, in a word, numberphobic?
Fortunately, Dawn Fotopulos has written one of the most straightforward, easy-to-read accounting books for small business owners. “Accounting for the Numberphobic” is one of the best management account books because it explains how the three key financial statements, including profit and loss statements (or the net income statement, as Fotopulos calls it), statement of cash flows, and balance sheets, serve as your business’ financial dashboard and how key accounting principles work together to help you steer your small business to success. Fotopulos’s simple explanation of complex accounting and bookkeeping concepts will offer you a greater understanding of your financials in no time (and you may even start to look forward to your meetings with your accountant)!
“Accounting for the Numberphobic” also explains how some trends of financial success can be a bad sign for your business. For example, did you know an increase in revenue can actually be detrimental to your business if you don’t manage the rest of your finances properly? The case studies included in this accounting principles book help bring these concepts to life, and Fotopulos includes plenty of actionable steps to help steer your business into more profitable waters.
Although one of the more technical financial accounting books on this list, “Finance for Nonfinancial Managers” is still jargon-free and very accessible for business owners looking to brush up on their accounting principles.
The target market for this book is managers in larger companies, but there is plenty of practical information that will benefit small business owners, too. Like “Accounting for the Numberphobic,” Greg Siciliano’s management accounting book provides a primer on how to maintain balance sheets, income (profit and loss) statements, and statements of cash flows.
“Finance for Nonfinancial Managers” also dives into other financial and bookkeeping reports you may find helpful as you grow your business. For example, Siciliano places a heavy emphasis on cost accounting, which is a critical concept to understand in order to maximize your business’s profitability. Cost accounting can be difficult, but this book simplifies the idea so it’s not intimidating.
The format of “Finance for Nonfinancial Managers” makes it one of the best reference accounting books for small business owners. Key terms, warning signs, examples, and tools are flagged by symbols and boxes, which makes it easy to quickly locate what term or concept you are looking for as you skim through the book.
Psychology tells us humans learn best through play, and “The Accounting Game” makes learning accounting concepts and applying them to your business seem like…well, a game.
Darrell Mullis’ account book for small business owners is deceiving in its simplicity—even the cover leads the casual browser to assume the book belongs in the children’s section and not alongside the serious accounting books. As you read “The Accounting Game,” you may even forget accounting is supposed to be boring. Then, before you know it, you will suddenly have a better understanding of accounting and how it applies to your business.
“The Accounting Game,” as is the case with most of the other accounting books on our list, is highly interactive and includes step-by-step processes you can implement in your own business. Mullis’ story format makes it an easy-to-read option, and you’ll likely find yourself cheering on your lemonade stand as it grows into a profitable enterprise.
If you’ve read the other books on this list, you’re hopefully familiar with the basic accounting equation: Sales – Expenses = Profit. This accounting equation puts profit last, making it an afterthought and something that may eventually happen someday if you do everything just right and have a fair amount of luck. “Profit First” flips the equation on its head, resulting in: Sales – Profit = Expenses.
“Profit First” is not an accounting book in the strictest sense, but it tackles the challenges of cash management beautifully. Instead of focusing on reviewing your financial statements, Mike Michalowicz outlines a method to help you manage your cash using multiple bank accounts, a take on the old “envelope method” your mom likely taught you when you got your first paycheck. Your accounting process will stay the same as it always has, but if you employ the “Profit First” method in your business, you will make your paycheck and your profit a priority rather than an afterthought.
In his unique, conversational tone, Michalowicz draws you into his theory, making it one of the best accounting books for small business and feel more like a leisurely read than a traditional business book. You might be tempted to keep reading to the end and not stop to implement the actionable steps outlined in each chapter. If that’s the case, the book is readable enough you can go back through it a second time, pausing to download the free resources available on the author’s website, mikemichalowicz.com.
For an eye-opening peek into the world of small business taxes and small business law, CPA and attorney Mark J. Kohler walks you through the major legal questions most business owners face while growing their business. In keeping with the title, Kohler offers a detailed playbook on the right way to manage your business—from major accounting decisions to tax strategies and legal scams to avoid—all with thorough examples and straightforward advice to save business owners time and money in the long run.
If you’ve ever felt indecisive or at a loss when it comes to your finances, “The Tax and Legal Playbook” will provide you with the knowledge and expertise you need to feel confident in managing your business finances, with or without an accountant.
Mike Piper’s “Accounting Made Simple: Accounting Explained in 100 Pages of Less” is the best accounting book for small business owners with little to no free time. In less than 100 pages, Piper quickly explains the most valuable lessons of accounting and what each business owner needs to take away from each one.
Like a few of the other accounting books on our list, “Accounting Made Simple” avoids technical accounting jargon and explains complicated accounting principles with straightforward, real-life examples. If accounting practices and equations are completely new to you, this may just be the best accounting book for you.
For small business owners seeking a more thorough understanding of accounting, “Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports” by Thomas Ittelson is a great option. As an all-encompassing accounting book, Ittelson explains how even business owners unfamiliar with accounting practices can learn to measure their business’s financial health and improve their financial literacy, all in one book.
With a unique, visual approach, Ittelson explains how each financial interaction affects the three key financial statements of a business: the balance sheet, the income statement, and cash flow statement. With clear explanations of each financial statement and the surrounding accounting principles, this accounting book is the best option for small business owners and non-accountants who have a basic understanding of managing their finances.
You might have noticed there is no basic “Accounting for Dummies” book on our list (though if you’re interested, that’s a great starter book)—and there are two primary reasons why that is.
First, as a business owner, you already have so many things to tackle with your limited time, and adding the day-to-day task of accounting is likely not one of them. Second, most accounting tasks are now done using cloud-based accounting software, which is updated several times a year. That turnaround often makes traditionally published books obsolete before they are even printed, leaving little time for business owners to catch up with accounting technology before it’s completely changed.
If you are looking for a resource to help you do the bookkeeping and accounting for your small business, consider enrolling in an online training course that incorporates the basics of accounting and bookkeeping, and includes all of the how-tos for your accounting software of choice.
Each of the best accounting books for small business included on our list is short in length and easy to read, making them the ideal picks for busiest of business owners. By setting aside 30 minutes to an hour each day, you can quickly read through the books on this list, extract the information most valuable to you, and implement the actions and steps that resonate with you. Consider keeping a pad of post-it notes close at hand to jot down thoughts and ideas you might want to revisit at a later time and make sure to follow up on your takeaways to keep them top of mind.
The immediate benefit of reading any one of these accounting books will be a greater understanding of the financial state of your business. The long-term benefits include increased profitability, cash flow, and growth. Investing the money in purchasing a few—or all—of these accounting books for small business and the time in reading them might be the activity with the highest ROI in your business this year.