While you may not think of accounting beyond general education courses, it’s not just for future accountants. Learning the basics of accounting is crucial for entrepreneurs and business leaders – not to mention the benefits for your personal finances.
Find out why any professional can benefit from understanding accounting in the college experience.
What Is Accounting?
Accounting is the process of recording financial transactions in a business. This includes summarizing, analyzing, and reporting transactions to regulators, tax collectors, and oversight agencies. The statements used in accounting offer a summary of a company’s operation, financial health, and cash flow.
What do you learn in accounting? There are different types of accounting that deal with specific information, including:
- Financial accounting: This is the process used to generate financial statements that occur during an accounting period, including income statements, cash flow statements, and balance sheets.
- Managerial accounting: This is similar to financial accounting, but managerial accounting uses the information in different ways. Monthly and quarterly reports are used to make decisions about business operations.
- Cost accounting: Like managerial accounting, cost accounting is used to make decisions, but the focus is on the costs of producing products or services and determining pricing.
- Tax accounting: Tax accounting adheres to the rules set at the federal, state, and local level based on the returns filed. Tax accountants must comply with reporting rules while minimizing the company’s tax liability.
Naturally, accountants need a strong foundation of accounting skills to work in the field, but these are critical skills to all business professionals. Whether you want to start your own business, work in a high-level leadership position, or manage your personal finances effectively, accounting courses offer numerous benefits.
9 Benefits of Studying Accounting
Wondering what accounting can do for you? Here are some advantages of studying accounting:
1. Proper Budgeting
Budgeting is important for financial stability, both in a business and personally. Understanding your income and expenses can help to ensure you’re living within your means and prepare you for your financial future.
Accounting teaches you to evaluate cash flow and expenses to spend your money wisely and budget properly to make the most of your income. This includes setting goals and adjusting your budget to stay on track.
2. Savings and Financial Security
Once you have a view of your income and expenses, you can see how much you have left over to allocate to debt and savings. Ideally, everyone should have an emergency fund that covers three to six months of expenses, but it can be difficult to set money aside if you don’t know where your money goes.
Accounting teaches you how to balance your finances, rein in unnecessary spending, pay down your debt, and save money as a “safety net” for unexpected setbacks like a job loss or accident.
3. Simplified Taxes
A big part of an accountant’s job is tax planning to help businesses minimize their tax liability. Taxes aren’t something that’s generally covered in high school curricula, so learning the details of taxes can help you take advantage of tax deductions, incentives, and breaks to reduce your taxable income and streamline the filing process.
4. Smart Investing
Savings held in cash will lose value as inflation reduces buying power. Many people invest to gain financial independence and ensure their money works for them, but investing can be daunting if you’re not familiar with how it all works.
Accounting helps you evaluate opportunities and risks to make smart investment decisions and build your wealth.
5. Starting a Business
If you dream of starting your own business and being your own boss, accounting skills are essential. You’ll likely be launching and building your business on your own – perhaps with limited resources – and will need to manage your costs, cash flow, and payroll by yourself.
Accounting not only prepares you for financial success, but it offers a lot of skills that entrepreneurs need like preparing financial statements for investors and stakeholders, forecasting demand for inventory, evaluating profitability, and preparing for tax season.
6. Better Decision-Making
Whether you own your own business or work for another organization, business decisions are informed in part by financial statements like budgets, balance sheets, and cash flow statements.
When you learn accounting, you can analyze these statements to inform business decisions and communicate with your stakeholders or business leaders. Taking this decision-making approach can also give you skills to make solid, evidence-based decisions in other areas of your life – even if they’re not related to money.
7. Industry Insights
Scandals happen in virtually every industry, and they’re often related to money. Understanding accounting can give you insights into the impact of accounting errors or manipulation on your organization or industry to make career decisions.
8. Safeguarding Your Personal Security
Accountants are often used to evaluate financial records and detect fraud or suspicious activity. You can use these skills to track your own finances and review your credit card statements, bank balances, and other transactions to detect fraud and improve your own financial security as a consumer.
9. Career Opportunities
Even if you don’t choose accounting as your field, having strong accounting skills can help you in your career and current role. You may learn to think analytically, improve critical thinking and management skills, and understand the role big data plays in influencing business decisions.
If your goal is to transition into a leadership position in your field, accounting builds business acumen that can prepare you for decision-making and make you more effective in the role.
Why Take Accounting Classes Online?
If you’re interested in taking accounting classes, online courses can offer a lot of advantages.
The biggest advantage of online learning is working at your own pace. Many students ask “is it hard to learn accounting?” Accounting can be challenging, but self-paced online college accounting courses allow you to practice and learn in the way that works best for you to ensure you’re building a strong foundation for more advanced courses.
Online accredited accounting courses are also flexible. You’re not restricted to a specific school or local options. You can take courses anywhere in the world from the comfort of your own home. With many online courses, you aren’t locked into a strict schedule that may conflict with your other courses or responsibilities. You can study and complete assignments late at night, in the middle of day, early in the morning – whenever works best for you.
How to Learn Accounting Online
From your personal finances to future entrepreneurial or leadership roles, accounting principles offer numerous personal and professional benefits. If you want to learn accounting online, Sophia offers both Financial Accounting and Managerial Accounting. Take them both up to the first challenge with a free trial!
