Must Good Accountants Be Good At Math?
Short answer; yes. Long answer; no.
Let’s start with the basics.
What is Math?
Mathematics is the science that deals with the logic of shape, quantity and arrangement. Math is all around us in everything that we do. Math is a core building block for everything that we experience in our daily lives; including mobile devices, architecture, art, money, engineering, and even sports. Math can be defined as the use of numbers and equations to solve a problem.
What is Accounting?
Accounting is the recording of financial transactions along with storing, sorting, retrieving, summarizing, and presenting the results in various reports and analyses. For example, an accountant may be asked to run numbers and information through a spreadsheet to determine how much revenue a company generated in a period and then compare that to the corresponding expenses that will determine income. These numbers are very exact, and the results need to be accurate enough to aid us in making good decisions.
Keep these two definitions in the back of your mind for now.
Now, let’s start at the beginning of the accounting profession, explain where we are today, and then explain where we are going next.
Once Upon a Time, businesses were filled with people who spent their days entering mountains of data from paper records and then reconciling the books. The name for these types of employees was accounting clerks - narrowly focused on performing a manual and repetitive task. In 1945, ENIAC (Electronic Numerical Integrator and Computer) ushered in a new tool that soon after was used to convert paper records into electronic records. This invention split the role of accounting clerk into data entry clerk and accountant. With more advancements in digital technology, today we have access to powerful computers that do the manual data entry and math for us through software programs running lightning-fast hardware platforms.. Through the deployment and advances in technology, we have recognized massive efficiencies in the field and have subsequently redeployed the clerks to different functions and departments.
Accountants are no longer required to be good at math because the requirements and expectations demand that we move up the value stream as fast as possible. The accountant of today must still be grounded in the foundational principles of accounting. However, they must also understand the tools, the logic, and the methodologies applied behind the scenes while no longer having to perform the mathematical calculations behind each total and subtotal. A key role of the accountant today is to identify the best tools to build robust processes that ensure that our inputs transform into the outputs that improve decision making. Accountants today are more logic and systems focused than they are on the pedantic entry of data into the systems and the corresponding rudimentary outputs.
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