Students attending two colleges in Lincoln, Nebraska find RG Bud Phelps’ practical accounting book, Cover Your Nut, to be very helpful for their first two accounting courses, as well as the development of their Chart of Accounts when setting up a company in QuickBooks. Students have advised us that the book Cover Your Nut is an excellent guide book to simplify their accounting course through the use of the practical approach.
RG Bud Phelps’ book, Cover Your Nut, is Practical Accounting in Plain English for the Real World. We would all like to be able to magically know which business we should start on our own, which business would make us the most money, which business would be the easiest to control, how we should set up our business to give us all the information that we need, and what details we should cover while planning all of these items, and, most importantly, how do we (Cover Our Nut).
The story behind the title, Cover Your Nut, shown below, is a simple explanation of Revenue covering Expenses.
A peddler drove his team and wagon full of goods into a small town in the west. He drove his team and wagon up to the front of the local hotel, and seeing the Innkeeper standing out in front of his hotel, the man said, “My wagon is full of goods to sell your townspeople but I have spent all my money on these goods. Would you consider letting me use one of your rooms on account? When I sell some of my goods I will pay you for the use of the room.
Now the Innkeeper was an intelligent man, so he said, “Take the nut off of one of your wagon’s wheels, lean the wheel against the wagon and give me the nut. When you’ve sold enough goods, you will have “Covered Your Nut.”
This is an accounting term that has been used for years, indicating the necessity of “The Cover” (your Revenue) being large enough to cover “The Nut” (your Expenses) , therefore the term “Cover Your Nut.”
Both of RG’s business books; Cover Your Nut and The Business Plan and Beyond, show the practical side of accounting. Developing a Chart of Accounts designed specifically for your individual business will help you to develop financial statements that tell you the economic history of your business. Your ability to read your own Balance Sheet and Income Statement is a necessity to assure that you “Cover Your Nut” and that you can show your banker or investor what is happening economically in your business.