Missional entrepreneurs start their journeys because they are passionate about their ideas, their enterprises, and making disciples. They rarely (if ever) get excited about the administrative functions that come with it such as marketing, legal issues, technology, human resources, and accounting. But these functions are essential to enable the mission of the business to be carried out, and they must not be ignored.
This edition is part of a two-part series taking a look at the importance of accounting.
Today we will look at the “why” question: the importance of good accounting to a missional enterprise in particular. In a future edition of M3 Weekly, we will address the “how”: practical guidance on accounting, especially for beginning entrepreneurs.
First, it is important to understand that our view of the accounting function has theological significance. In fact, features of modern accounting practices are rooted in the foundation of Christian thought.
In a Forbes article, “The Theology Of Financial Accounting,” author Jerry Bowyer describes how the accounting concepts propounded by Luca Pacioli (generally recognized as the founder of accounting) were guided by his theological convictions:
He was mainly a member of a religious order, and a theologian. His development and refinement of the modern system of financial accounting was not mere mathematics; it was a subset of his theology.
Bowyer goes on to highlight how the fundamental formula of accounting (Assets = liability + capital) reflects the biblical principle of the steward’s accountability to the owner, and the double-entry account-keeping system literally forces a decision-maker to ‘count the cost.’
Second, we should be aware of the critical importance of well-done accounting in our enterprises. Among many other benefits, good accounting:
- Shows an accurate financial picture that can guide operational and long-term planning decisions.
- Gives cash flow visibility to help maintain a positive cash position.
- Provides accountability to investors and other stakeholders.
- Empowers owners and allows them to set proper policies and controls.
- Helps identify opportunities or weaknesses in the business.
- Illustrates Kingdom values of good stewardship, honesty, and integrity.
- Frees up time and energy to devote to the mission of the business once proper practices are in place.
- Allows you to move from “Where are we now?” to “Where are we going?”
Think about it: The well-known words, “Well done, good and faithful servant were spoken in response to stewards essentially presenting their accounting books. May we grow in our understanding of the practice of accounting as an essentially spiritual function.
Then the high officials and the satraps sought to find a ground for complaint against Daniel with regard to the kingdom, but they could find no ground for complaint or any fault, because he was faithful, and no error or fault was found in him. Daniel 6:4 (ESV)
Let’s take a moment today to ask God to build the faithfulness of Daniel in our work, including the way we ensure good accounting for our enterprises.