In this video, I provide you with a list of skills you need for accounting!
VIDEO SUMMARY
You can break down any job into a list of skills. This is very helpful, because you can go down the list and simply learn more about all these different skill sets. I have never actually seen anyone who has created a detailed list like this for accounting. So I thought I would attempt it. Accounting is a tough job and there is a lot that goes into it. This is my perspective of the skills you need to be an accountant.
Accounting knowledge. Let us start with the basics. You obviously need basic accounting knowledge. You need to know about Audit, Tax, Corporate accounting standards. There are rules, regulations, best practices in all three areas: Audit, Tax, and Corporate accounting. Even if you do not know the details for every area, you need a general understanding of how they work. If you are a corporate accountant, even if you are not a tax accountant, you still need to understand how taxes work so you can represent the best interests of your company.
Ethics. I have made a bunch of videos on ethics. Ethics is an important component of so many accounting decisions. You need to be an expert in ethics. You need to understand how to resolve ethical dilemmas. You need to understand how to create a stakeholder matrix. And you need to understand how to integrate your understanding of ethics into your decision making process.
Finance. Finance is a whole area of study outside of accounting. This deals with investing, financial markets, company valuation. A lot of accounting majors just learn the very basics of finance. It is really helpful for accountants to learn as much as they can about finance. You need to understand what is happening in financial markets. Because if you are the accountant for a business, and your stock price drops, that is going to affect your decisions.
These three areas work very closely together: accounting, ethics, and finance. If you are the type of person who thinks “I am just going to be a tax accountant, so the only thing I need to know is the IRS tax code,” that attitude is really holding you back. You want to be the type of tax accountant who can connect how the changes in the tax code are going to affect the company stock price, and be able to recommend the right ethical decisions. Accounting, ethics, and finance are all very important skills.
Sales. There are a lot of other business skills you also need to know. You need to not only know about accounting, you need to be an expert in business overall, because your decisions impact all the other departments in your organization. The first one you need to know about is sales. You should be actively studying how to generate revenue. And do not forget, the accounting department is a part of the sales cycle. You have accounts receivable where you are directly touching the customer experience.
Marketing. There are a couple areas within sales that are so important that you need to develop these skills. The first is marketing. On a basic level, marketing is how you communicate your value proposition to the world. You need to understand market research, pricing strategies, advertising strategies, Brand management, just to name a few.
Social Media. Another skill in sales that is becoming more and more important is social media. You need to stay aware of new internet platforms and how they impact your business. I am talking about facebook, twitter, snapchat, and it seems like there are always new online platforms coming out. If you remember when the internet first became popular, there were many businesses that did not pursue online retail, and those business were really hurt. Social media is the same thing. It impacts your financials, so as the accountant, you need to understand how it all works.
Public Relations. Public relations deals with how your company is portrayed in the news. I know there are a lot of accountants out there who do not think about this. I am telling you, do not take public relations for granted. You need to understand how the news media works. Because one bad news story can impact your stock price.
Public Speaking. Related to sales is public speaking. Accounting is not just about sitting behind your desk are generating financial reports. You need to be able to sell your ideas through public speaking. This could be through one-on-one meetings or larger groups of people. You need to be able to give compelling presentations and communicate effectively.
Business Strategy. I have talked a lot about Sales, but there are a lot of other skills in business you need to know about. One of the most important is business strategy. If you are involved in any sort of leadership role, a large part of your job is defining “what should my business do?” and “how do I implement that?” These questions are a lot harder than you think, and there is a whole field of study around business strategy.
Operations. Whatever industry you are in, there is an operational component. Whether it is manufacturing, or running a hotel, or running an online business, you need a deep understanding of how operations works in your sector. When you are sitting in the accounting office looking at financial reports, you need to understand how those numbers translate into what is happening on the factory floor.
Supply chain. In a world that is constantly becoming more complex, supply chain is more important than ever. Supply chain deals with understanding the logistics of your purchases. Your business exists within an overall network of businesses. Managing relationships with all the businesses that affect your products can have a big impact on your financials.
Economics. On a very simple level, is the economy doing well or poorly? That answer will obviously impact your business decisions. There is a lot of valuable skills within economics: Supply and demand, Microeconomics, Macroeconomics, Fiscal policy, Economic indicators. All of these skills will help you in your job.
Organizational Behavior. I have talked about this before, how accounting is about people. Your organization is full of people, and you need to understand how they interact. This deals with subjects like Management. This answers the question, “how do you get people to do, what you want them to do.” Throughout history, people have always had a hard time answering that question.
Human Resources. This goes along with Organizational Behavior. People are your greatest resource. You need to make sure you take care of them. There is a huge amount of laws and regulations you have to follow when it comes to human resources. Specifically for accountants, you deal with payroll, which is obviously a huge part of any business. Accountants need to be an expert in human resources. I do not see any way around that.
Information Technology. A large part of business today is driven by your IT infrastructure. Everything is in the computer. You need to understand how that is set up for your business. Your financial system is in the computer and you need to understand how that works. A large part of an audit is based on an organization’s IT.
Business Law. This is another massive area. You do not have to be a lawyer, but you have to understand how the law works. A big part of an accountant’s job deals with contracts. Also, in a set of financial statements you have to estimate contingent liabilities, which includes any outstanding lawsuits. You need to have a thorough understanding of business law.
Laws & Regulations. This goes a long with business law, but I wanted to call it out separately. Every industry has a set of regulations that are specific to them. For instance, if you run a restaurant, you need to follow a certain set of rules. If you have a freezer unit, you need to keep that freezer at a certain temperature. So whatever business you are in, you need to understand those regulations. There are federal laws, local laws, and rules by different government agencies. You need to be able to read the law, understand the law, and implement it in your business.
Politics. Speaking of laws, you also need to understand politics. Are policies anti-business or pro-business? You do not have to be a political activist, and you will notice I never talk about politics on this channel. But it is important to understand different political positions, and how they impact your business and your financials.
Geography. We live in a global world. On a basic level, you need to know where countries are at. But more than that, you also need to know about the different cultures around the world. Also you should know where certain industries are located. The reality of the business world today, is that something happening half-way around the globe, can impact the economy right in your own backyard.
Computers. This is similar to IT, but I wanted to talk about it separately, because it is so important. We all know people who say, “I am just not good with computers.” That attitude is not good enough anymore. Everything we do is on the computer. You need to develop that skill.
Computer Programming. This is the one skill set that will set you apart in the accounting world. I can only speak from my own experience, but when I learned computer programming, it took me to a whole other level of accounting. Specifically, I am talking about visual basic programming for Excel. You can do unbelievable accounting tasks, in a fraction of the time. I am not going to get too much into the details. I might make a video series sometime on computer programming for accountants. From my perspective, computer programming is a skill all accountants should have.
Engineering and Science. The world is becoming more technologically advanced. You need to understand science, physics, electricity, chemistry, and biology. All these things drive the technology in your business. Now as an accountant, you will have people in your business who are scientists and engineers. They will take care of the engineering and science. But you need to know enough to have an intelligent conversation with them. Because it is your job to get them the resources they need. You do not want to be the type of accountant, who does not understand your technical staff. That is when poor business decisions are made.
Math. Math is useful to communicate with your technical staff, but also math is becoming more important for accounting. This is especially true in the financial world where you are dealing with forecasting and statistical analysis. I foresee that in the future, calculus will be required for all accountants. Math is becoming a bigger part of accounting.
Psychology. Psychology is the study of behavior and the mind. Why do people do what they do? The goal of developing this skill is just to provide you with understanding. Understanding your customers, staff, competitors, and community. Anyone who has been involved in negotiations can confirm this. Understanding the other party’s psychology can help you achieve a win-win situation.
Anthropology. Anthropology deals with culture. Your business is a culture. Your community is a culture. There are many cultures around the world with similarities and differences. The more you can understand how culture informs how we communicate, the more helpful that will be for your business.
History. People who do not know about history, are doomed to repeat it. There are so many important business moments in history, and it is really helpful to understand those when you are making decisions. One obvious example of this is the Tulip Bubble. If you are an accountant and you do not know what the Tulip Bubble, go look it up after this video. You do not want to be an accountant who does not know about this pivotal moment in business history.
Art. This is something a lot of accountants do not think about, but you need to develop some skill in art. I have made a couple videos about this. Art is about developing your creative muscles. If you want to be successful in business today, you have to be able to do creative problem solving.
That is my list of skills you need as an accountant. I know I covered a lot. I also realize that accountants specialize in a specific job in a specific industry. While it is important to specialize, it is also important to have this breadth of knowledge to draw upon. My goal here is to provide you an overall list of skills. If you talk to any accountant in a leadership role in an organization, they will tell you that everything on this list, you will deal with every single day. The more you can develop these skills as an accountant, the more effective you will be.
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Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.