Thursday, May 15, 2014

Do I need to have accounting skills?

I love accounting which is a good thing since it is my chosen profession!  Many people do not and many business owners resist gaining any knowledge of the subject.  We often speculate why so many small business owners do not know how to read financial statements and do not want to learn how.  I suspect some subscribe to the ignorance is bliss theory.  No one is truly ignorant and I think many owners suffer sleepless nights because they know something is wrong even though they are trying to remain ignorant.

I read an interesting article in the NY Times recently about how a lack of skills in accounting is hurting society in general.  I have included the link below and it make a compelling argument for educating society and how other countries have done so successfully for hundreds of years.  Some high schools require some financial education-our local school district requires a class called Personal Financial Management.  This is a good start but more is needed.  The University of Wisconsin School of Business requires all students to take a minimum of two accounting classes regardless of the major and several other schools within the University require some accounting classes in order to graduate as well.  DePauw University is completely overhauling its Music Conservatory using an entrepreneurial base which requires two accounting classes for all music majors (much to many students dismay!).  No Accounting Skills?

We encourage all of our clients to gain as much of an understanding of their financials as possible.  They have us and their accounting software programs to handle the nitty gritty accounting, but they still need to understand basic concepts like profit margins and cash flow.  What do you think about requiring all citizens to have a better accounting education?

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