…Well technically accounting isn’t crucial for everyone. But accounting and the field of financial as well as tax accounting are very useful, valuable, and foundational fields to study for the vast majority of people.
As a business major I might have a slight bias, but the argument still holds for any other career or academic path – accounting is foundational. Why, you might ask, is accounting so important?
Accounting is important for two types of people: Business people (people involved in business decisions, management, and keeping business records) and regular people who make logical financial decisions.
First I will lay out merits of accounting for business people (who I’m sure already know a lot of them). Secondly I will cover reasons for accounting for individuals in their finances.
Accounting, specifically financial accounting is highly useful from a business perspective. Accounting has been known by many as the “language” of business. Accounting is a world of financial terms and figures that mean precise, crucial things to business owners and managers.
The three things useful to “business people” are: 1) Analyzing where the business is at, 2) keeping the business legal for tax purposes, and 3) presenting the business to others in a clear, conscience way.
Moving on to personal finances, there is a different use for accounting which lies primarily in the realm of clarity and accountability. Accounting on a personal level with individual or household finances is a fantastic way to get on track with finances.
There are two primary uses for accounting on a personal level: 1) Tracking where you’re at financially and 2) where you want to go. In addition, just like business, accounting on a personal level can prepare you for tax season and take away a lot of the headache. To be clear, business accounting is presented and formatted in a different manner than personal finances, but nonetheless the principles still apply.
Where can you go from here? Begin taking accounting seriously! You don’t have to become a financial major or geek out about it. But you should definitely learn the basics, and as a result set yourself up for many wise decisions to come.