Let me begin by explaining why accounting is essential. If there are two things in life we cannot avoid, they are death and taxes. Everyone pays taxes throughout their lives, as do all types of businesses. However, tax is just one aspect of accounting. When we consider financial accounting and managerial accounting, it becomes clear why so many professionals are drawn to this field.
Why is financial accounting important? The primary goal of any business is to generate a profit. But how can you determine if your business is truly profitable? Amid the production lines, busy workers, and delivery trucks, how can you measure success? With countless invoices, bills, cash transactions, and checks, how do you assess whether you’re making or losing money? Furthermore, for a company with grand headquarters and sprawling factories, how do you determine what portion of the assets belong to the owners versus what is owed to the creditors?
Accounting provides the tools to answer these questions. It solves the puzzles, tells the financial story using numbers, and offers a clear picture of a company’s performance. This is why financial accounting is one of the most critical components of any business. It demands specialized skills that are both valuable and in high demand.
The role of cost accounting: Cost accounting is equally vital, especially when it comes to pricing strategies. In a competitive market, understanding your costs better than anyone else can give you a significant advantage. You don’t want to overcharge customers and lose market share, but you also need to leverage advanced technologies or techniques to maximize profitability. This balance makes cost accounting indispensable for businesses aiming to succeed.
Why choose accounting as a career? The importance of accounting explains part of its appeal as a career. It is essential, and therefore valuable—but what makes it even more valuable is its rarity. As the saying goes, rare things are valuable.
A 2022 article highlighted an 8% decline in accounting students compared to 2021, along with a decrease in the number of Certified Public Accountants (CPAs). One reason for this trend is the perception that accounting is a “boring” profession. However, rarity creates opportunity. Industries where everyone competes for the same roles often offer less potential for success. In contrast, pursuing a less crowded path, like accounting, can lead to greater rewards.
The era of accounting is on the horizon, and it’s a field ripe with opportunities for those willing to embrace it. Let’s go Buffs!
Chen Zhao, Clinical Assistant & Edwards Professor of Accounting
Source:
CFO
