Competent business managers require basic financial skills to manage their operations efficiently. They must minimize corporate liabilities and adhere to local, state and federal regulations. Managers of small businesses need to maintain a level of cash reserves and financial flexibility. The U.S. Small Business Administration provides online courses to help managers develop skills in finance and accounting principles. Using these resources, they learn how to identify sources of capital most frequently used by businesses, find out how to borrow money, establish collateral, negotiate rates and repay loans.
Business managers need to know how to prepare financial reports that provide information about a company’s performance. External investors, creditors and government authorities review these reports according to Generally Accepted Accounting Principles guidelines. Managerial accounting practices do not usually follow GAAP because company executives typically use them to make internal decisions. Competent business managers need to be able read a profit