Do YOu Speak Accounting?
Accounting is the language of business. Without at least a conversational knowledge of the language, it’s like visiting a foreign country and being unable to communicate.
If your job is in the Accounting Group, you obviously need more than a conversational knowledge. Becoming fully fluent enables a person to progress and handle more complicated analysis and “conversations”. Conversation ranges from Financial Accounting, which documents important facts, to its most evolved form where the language becomes Managerial Accounting. At this level, the basic facts are analyzed, interpreted and used in deep discussion with others in the business.
Are terms like Income Statement, Revenue, Direct Expenses / Margin, Indirect Expenses / Margin, Gross Profit / Margin, SG&A and Operating a Profit familiar to you? Can you think of words that fit into each category? Do you understand Debits and Credits, or do more arcane words like EBIT or EBITDA ring a bell?
How about Balance Sheet, Current Assets, Fixed Assets, Short and Long-term Liabilities, or Owners’ Equity? Does a Statement of Cash Flows suggest to you how the inputs and outputs of a business work together?
Regardless of your role in a business, conversation around these and other important terms has a huge effect on your understanding of and influence on the financial factors that are essential to business success. Each and every employee impacts multiple accounts; do you know where you show up in this conversation?
The mechanics of Accounting are well-established and work much like grammar does to properly connect words. There are also many “dialects” spoken; in our business it happens to be a dialect from the “Costpoint” region. There are some unique words and turns of phrase, but the basic grammar is consistent with other dialects. When we share this common language across the business, our level of understanding of what’s happening and of one another go way up. And that builds a stronger culture and more energized business. Each locale may have a slightly different accent, but suddenly the understanding is clear.
It’s much more fun to visit a country if you can at least hold a simple conversation. A “pocket guide” will get your around, but if you decide to live there, it’s time to study the language! The language of Accounting chronicles the past, frames the present and enables meaningful conversations that shape the future. Join the conversation!
If your job is in the Accounting Group, you obviously need more than a conversational knowledge. Becoming fully fluent enables a person to progress and handle more complicated analysis and “conversations”. Conversation ranges from Financial Accounting, which documents important facts, to its most evolved form where the language becomes Managerial Accounting. At this level, the basic facts are analyzed, interpreted and used in deep discussion with others in the business.
Are terms like Income Statement, Revenue, Direct Expenses / Margin, Indirect Expenses / Margin, Gross Profit / Margin, SG&A and Operating a Profit familiar to you? Can you think of words that fit into each category? Do you understand Debits and Credits, or do more arcane words like EBIT or EBITDA ring a bell?
How about Balance Sheet, Current Assets, Fixed Assets, Short and Long-term Liabilities, or Owners’ Equity? Does a Statement of Cash Flows suggest to you how the inputs and outputs of a business work together?
Regardless of your role in a business, conversation around these and other important terms has a huge effect on your understanding of and influence on the financial factors that are essential to business success. Each and every employee impacts multiple accounts; do you know where you show up in this conversation?
The mechanics of Accounting are well-established and work much like grammar does to properly connect words. There are also many “dialects” spoken; in our business it happens to be a dialect from the “Costpoint” region. There are some unique words and turns of phrase, but the basic grammar is consistent with other dialects. When we share this common language across the business, our level of understanding of what’s happening and of one another go way up. And that builds a stronger culture and more energized business. Each locale may have a slightly different accent, but suddenly the understanding is clear.
It’s much more fun to visit a country if you can at least hold a simple conversation. A “pocket guide” will get your around, but if you decide to live there, it’s time to study the language! The language of Accounting chronicles the past, frames the present and enables meaningful conversations that shape the future. Join the conversation!
