A lot of people – even accounting students – think of accounting as number-crunching, but in reality, accounting is much more than calculating tax return information. Solid accounting principles can and should influence business decisions – and not always in the way you might think. Accountants can help business leaders make smart decisions that achieve big-picture financial goals, not just short-term savings.
The Changing Role of Accounting in Business Management
Gone are the days when accountants’ biggest contributions to an individual’s, business’s or organization’s financial decisions were preparing tax returns or statements of assets and liabilities. Today’s accountants do much more than bookkeeping. They help companies evaluate costs and profits and suggest ways to bring in and keep more money. Accountants recommend strategies to improve efficiency and reduce waste – and that doesn’t only mean eliminating jobs or cutting salaries.
For example, accounting teaches smart business managers that it’s more important to pay employees a fair salary than a low salary. When those in management positions inside an organization consider salaries and raises, they naturally want to make sure those expenses fit into the organization’s budget. Otherwise, the organization as a whole and the employees hired at that not-budgeted-for salary will suffer. However, some organizations push to keep salaries lower than necessary across the board, ostensibly to save the company or organization money. This “is not good business for the organization, the employee” and company executives, according to Accounting Today.
At some companies, policies exist limiting how much more a manager or executive can earn compared to a lower-level employee. By keeping their underlings’ salaries low, high-level workers are making sure their own wages stay low, Accounting Today reported. When a company consistently underpays employees, those workers are more likely to leave for jobs where the pay is better. That high turnover can cost the company tens of thousands of dollars when it has to repeatedly screen, hire and train new employees.
What This Evolving Role Means for Accounting Students
As a modern accounting student, your education will have to entail more than the formats and equations necessary for preparing tax records and financial statements. In addition to your introductory to advanced accounting courses, you will likely take classes in subjects like business, economics and finance. You will develop “soft skills” through your general education and elective courses, and through work experience even outside the field of accounting. To succeed in an evolving field, you will need to learn to establish budgets, manage costs and assets and strategize to meet specific financial goals. As laws, regulations and expectations evolve, you will need to keep abreast of changes in the accounting field long after you graduate college.
Accounting plays an important role in how corporate leaders manage their business decisions – and that role is only growing. By enrolling in an accredited accounting program and making the most of non-accounting courses and professional experience, you can prepare yourself to handle the responsibilities of helping businesses make management decisions.