Take a course in accounting
“Mention the word accounting, and otherwise competent businessmen and women suddenly grit their teeth, furrow their foreheads, and start uncontrollably pulling out chunks of their own hair. Why is this? How can a craft, which is nothing more than a tool to keep track of the inflow and outflow of cash, be thought of with such contempt and fear? The mystery becomes even more puzzling once you realize that ACCOUNTING is essentially the discipline of counting money. And since most people start a business to make money, it seems rather silly they shouldn’t enjoy counting it.
—Peter J. Patsula, founder of Patsula Media and author (from his online publication The Entrepreneur’s Guidebook Series, 2001–2007)”
Accounting is the language of business. Being able to understand this language allows individuals both inside and outside of an organization to join the “conversation” about how the organization is performing and how it can improve future performance. Financial accounting focuses on the reports that managers generate to provide interested external parties a summary of the firm’s financial position and operations. Managerial accounting focuses on the information and the analytical tools and techniques that help managers and employees make the right business decisions.
A good course in financial and managerial accounting fundamentals will teach you how to:
- Understand the financial statements that managers create, and be able to interpret and analyze these statements to assess the financial position of the organization.
- Identify and understand the nature, purpose, and importance of different types of decision-useful accounting information, and use analytical tools and techniques to use this information to make business decisions.
- Apply these fundamentals to create a business plan, forecasts and budgets, and anticipated information needed for decisions made by you as owner and manager, your employees, and external parties such as future shareholders, creditors, and other constituents.
You cannot call yourself a competent business person unless you are fluent in the accounting language.