Why You Should Study Accounting
Categories: Education | Entrepreneurialism | Finance | Economics
Posted by
Paul Orfalea
at
10:40 PM
3
comments
When a person living in a small village in India buys a can of Campbell's soup, that act triggers an elaborate economic scorekeeping system that both describes and empowers worldwide commerce. The scorekeeping system is called accounting, and the score is a measure of rewards owed to people along the value chain for their effort, ideas and investments.
Accounting is the most practical subject in school, because it expresses what all of us do with money everyday. I'm not saying that geometry is not practical, but when a teacher tells a roomful of ninth graders that they'll need geometry if they ever want to build a bridge across the creek, well, most people live to a ripe old age without building a single bridge.
But we go to the supermarket and the gas station pretty often, and we want to know whether we can afford a gallon of milk, a dozen eggs, and a tank of gasoline. We don't call it accounting, but that's what it is. And with a little instruction, we could be handling our money a lot better. Most Americans don't budget, don't regularly balance the checkbook, and can't seem to understand where the money goes.
Knowledge of accounting empowers business people across a wide range of disciplines, building credibility into marketing plans, product proposals, and HR decisions. Today, business students can take classes in entrepreneurialism, marketing, management, leadership, organizational analysis, etc.; and they all offer valuable lessons. People often skip accounting because it seems too banal, or, for those with math anxiety, too difficult. But accounting is the very language of business, just as mathematics is the language of science. To fully understand your business, you need to understand its accounting.
Think about all the executives in the news who didn't seem to understand how the finances at their own companies worked. Think about all those people who panic at tax time because they don't understand basic financial terminology - even after their accountant explains it! Whether you are still a student or have long-since graduated, consider taking an accounting class. It's a great way to empower yourself in business and increase your overall financial literacy.
Comments
JLB wrote on 05/31/10 9:46 AM
Success often comes from innovations generated by the creative right-side of the brain. However, all successful creation must be tempered and guided by the logical left-side. Essentially, the dreams of the right-side must be transformed to reality by the left-side. Accounting is a logical systems one must master to guide any endeavor to its optimal outcome. Certainly, any accomplishment requires gathering and properly using money. Therefore, the popular view that the future belongs to the right-brain creative class is incomplete: it belongs to right-brainers who can use their left-brain—and understand accounting.
Fabshu wrote on 08/26/10 10:33 AM
I am an accountant, and many of what I have learned from school also can be applied to our daily life, especially to personal finance. Many people who don't understand accounting say that accounting is boring. It is never boring!!! Sure, there is a learning curve, but it is no difference than learning anything else brand new to our brain. I have grown tremendously as a person and in my profession as a result of what I deal with on a daily basis. Besides, the tuitions that I have paid are now paying back good dividends. I agree with you, Mr. Orfalea.
Brandon Kennedy wrote on 05/06/10 9:21 AM
I agree that accounting is an essential tool for any person trying to live and thrive in the world, and this is an important point that has been completely ignored by so many governments around the world. It's amazing how a concept that centers around what is fundamentally managing an inventory of assets can be overlooked by so many, especially when it is clearly so important to the success of any entity. It's ironic that one of the key elements for elevating a country beyond the Third World that was heavily touted by Western nations was achieving a national savings rate of at least 10%, a feat which has long evaded the United States and its affiliates.