Choosing a right major when going to university is super important, just like deciding whether to marry A or B. I meant, the decision affects your future, at least your job and career.
Moreover, going to university costs a lot of money and time. So you want to make sure the knowledge and skill obtained from the learning process will worth it.
Accounting is not a skill that everybody can master easily and quickly. It requires a lot of exercises and constant hard work over years before one obtaining enough accounting knowledge and skill.
If you want to study accounting, ideally, you have to have strong reasons and motivations behind it.
To help you decide whether or not accounting is for you, let me tell you why I (and many others like me) choose Accounting. In addition, you will also find why learning basic accounting still worth it even if you don’t want to become an accountant.
Why I Study Accounting
In the university I majored in accounting for the following reasons:
Accounting is quite popular. The number of students majoring in accounting has always been great in any colleges. Particularly in business schools, accounting is most desirable.
The first (of some) reason why I chose accounting was because of its popularity. The consideration I made at the time was simple: people tends to opt-in something good (and as much as possible to avoid the opposite.)
So many people take accounting major and eventually become an accountant, certainly because accounting is not just good in theory, it has been proven good for the life of many whose love it.
If the accounting did not have such great reputation, successful people like Warren Buffet would have never been an accountant.
Of course, something becomes popular not without reason. One of many reasons why accounting major most in demand due to the next one.
2. Employment Opportunity
Accounting major much in demand because of the employment opportunities available after the graduation.
In Indonesia, where I was born and rise, having a job right after the graduation is the dream of every student, including me. And a bachelor degree in accounting is almost a ticket to go.
It has been long known that no accountant is jobless.
In the United States, surveys on various career portals and magazines year-to-year always mark the career prospects of accounting as “great,” even when economic conditions are not so good like today.
Chances are, in many situations, the worst a company’s financial situation the more it needs accountants and financial staffs. The management of the company needs them to shut the trouble and improve its financial position over time by implementing more prudent internal control as well as making use of financial-based decision-making.
Those clearly says that accounting is definitely more than worth studying.
3. Loving Numbers and Business
Accounting is defined as a process of quantifying, interpreting and communicating business’s activities in dollar numbers report (popularly known as “financial statements.”)
The “quantifying” word on the definition clearly says that accounting relates to numbers.
Numbers isn’t everybody’s favorite. So is accounting. But if you love business, numbers will become your best friend. Because to be good in business you would have to be good in making measureable business decision. To become measurable, a business decision must be backed up by financial information which are numbers.
For example, you want to run a new business. Obviously, the one that gives you a good profit (otherwise you’d rather put the money in your saving account.) But how do you know whether or not the business makes the profit you want?
You have to count the dollar numbers; what dollars you make from the business and what dollars you spend for the business.
Note: profit = $ that you make (minus) $ that you spend
That is a simplified example.
A little bit more complex example would be the decision of choosing a source of capital to run the business. Let’s say you have three options:
(a) get a bank loan with x% annual interest; or
(b) get partners with profit sharing; or
(c) get a venture capitalist with y% profit sharing.
You want the option that will cost you less (thus leave you more profit at the end.) But how do you know that?
Again, you have to count the numbers.
Other examples of decisions made using financial information are:
- whether to produce a product internally or purchase it from an outside supplier;
- what prices to charge; and
- which costs seem excessive.
Now, don’t get me wrong. I am not saying that you have to be a mathematician or pretty good in mental arithmetic. No.
In fact, accountants use calculator or computer, and they’re well trained to use both tools in speed.
What I am trying to say here is that, at a very least, you have to be comfortable working with numbers tediously.
I love both numbers-crunching and business so I went and took Accounting major wich, both in the school and real world, tediously works with numbers.
If math interests you, go for Math Science and pursue the path of being a Mathematician.
If making and managing a business are your passion, you may want to go for Business Administration or Management and start a business.
Accounting is more like a combination of math and business. So, if you’re like me and love both numbers-crunching and business, accounting is probably for you.
4. Wanting To Become an Accountant
I got thrilled when an auditing professor of mine told the class about how cool an auditor can be. I decided to pursue the Certified Public Accountant (CPA) as my future profession, right after the class.
Not quite sure about others. To me, on that time, CPA is a respectful profession. And I found it’s true, in real world, after the graduation. The works of CPAs are tightly governed by standard and ethic codes. This makes investors all over the world rely on the opinion of CPAs auditors.
If you aspire to become a CPA, taking and eventually passing the CPA exam is a must. To do so, you have to be extremely good in accounting, and majoring accounting in the college or university is a big help.
The Power of Accounting: Why You Should Learn Accounting Too (Even if You Are Not an Accountant and Do Not Aspire to Become One)
If money is important to you, learning Accounting worth it, even if you are not an accountant or do not aspire to become one.
Because you have to be really good in money-management if you want to be good in money. And accounting helps you managing the money.
Let’s observe the following:
* Ask a small business owner, what is the most important in her business? Numbers of money ins, money outs, and money left in the bank account as the profit.
* Ask an Engineer at the Research and Development department, what is the most important in his job? Numbers of new products she develops that results in a well market response AND the money spent for that.
* Ask a Marketer and Sales Person at the Marketing Department, what is the most important in their job? Numbers of new buyer/client they acquire that results in a pretty good Sales AND the money spent for that.
* Ask an Engineer at the Production Department, what is the most important in his job? Numbers of finished goods he produces that available for the company to sell AND the money spent for that.
* Ask a Purchaser at the Purchasing Department, what is the most important in her job? Numbers of supplies that she purchases that results in company’s smooth operation AND the money spent for that.
* Ask an investor, what is the most important in his investing activities? Numbers of dividend he gets and money invested for that.
* And, the list can go on.
Note that people whose see money as important (read: professionals,) in any fields, work toward profit so they see their activities in the form of ‘what is in‘ (benefit) and ‘what is out‘ (cost.) And, accounting process helps them ‘translating‘ all the benefits and costs into dollar numbers!
In the business environment, accounting is a service activity designed to ‘accumulate-measure-and-communicate’ financial information for making sound decisions about how to best use available resources and results in a good profit for the business.
“I am not interested in business, I don’t work for a company or make one, and I have a perfect checking account where every penny of mine is recorded” you may think.
Okay. Let’s assume that you have a “perfect” checking account where you can see money in and money out but, at some point in your life, no matter who you are and what your background is, you will certainly come into a tight money situation and force you to sit back and contemplate:
* What proportion of my monthly expense can be decreased without doing a drastic change in my lifestyle?
* Am I spending more for clothes this year than I did last year? Can I decrease it? How much?
* Will I be able to pay all bills as they are due?
* Will I be able to save enough to pay the vacation abroad that I planned?
* Do I urgently need a side job or two?
Is your “perfect” checking account capable of answering those questions? No, it is not. Checking accounts do not answer such analytical questions.
To get the answer, you would need to analyze each check and determine the type of expenditure. Next, you have to code it by type of expenditure, the data then must be classified and summarized down. Using the summary then you can use the information to forecast future patterns. In simple words, you do accounting at its most simple form!
How many of us use our checking account data like that? Not many. We record money we earn and spend, YES, but we don’t structure the information for evaluation purpose. Accounting plays a vital role in such situation.
A Final Note
At some point in your life, you will need financial information to make important decisions related to money and other types of asset, such as whether to buy or lease a house, how to budget your monthly income and expenses, where to invest your savings, or how to finance your (or your child) college education.
You would have to make such decision no matter where your passion, what your interest, and what your dream profession, are.
I am not saying that you can’t make such decision without the accounting process, nor I say that financial-based decision making can make you rich person.
What I want to say here is that you are affected by financial information generated by the accounting process whether you like it or not. Ignoring the value of that information simply puts you at a disadvantage.
In contrary, those who recognize the value of accounting information and learn how to use it to make better decisions will have a competitive advantage over those who don’t.