- At its heart, bookkeeping is about collecting information,
getting things recorded,
because once events are recorded,
then we can start organizing those events
and start making better decisions.
For example, Walmart has 10 billion
customer visits per year.
In order to operate, Walmart must
have an organized bookkeeping system in place to keep track
of what those customers bought,
how much they paid, what items need
to be ordered, and so forth.
10 billion visits per year.
Walmart needs a good bookkeeping system.
Now, Google is the most visited website on the Internet.
There are between one trillion
and two trillion Google searches per year.
And how does Google make money?
Google makes money by charging advertisers
for customer views or customer clicks.
How can the company charge these advertisers unless Google
has a system in place of keeping track
of the number of clicks and what people clicked on?
The Google search engine, awesome.
The Google bookkeeping system is equally as awesome.
Without bookkeeping, Walmart
and Google could not continue to function.
Bookkeeping seems mundane, but that's where it all begins.
Now, let's make this more personal.
Think about you and your personal budget.
Let's focus on your food budget.
How much did you spend in the past 12 months on food?
The honest answer for most of us,
for me for example is I'm not sure I know how much
I spent on food last year.
I could use a better bookkeeping system.
If I want to start making decisions
and changing my behavior with respect
to how much money I'm spending on food,
I first have to have a system in place
where I keep track of it.
Simply stated, bookkeeping
is the preservation of a systematic,
quantitative record of an activity.
And until you have a record of an activity,
you really can't make any sophisticated decisions
with respect to that activity.
You've got to write it down, you've got to get it recorded.
Once that happens, then you can start
to make informed decisions.
We can use the past to help us make better decisions
for the future, but it all starts
with getting things written down.
That is bookkeeping.