18/05/2021 - 15:48

Accounting matters: Why entrepreneurs need to understand the numbers

18/05/2021 - 15:48

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The dynamic changes in information and communication technology, people mobility, and sustainable development, puts pressure on all businesses. The COVID-19 pandemic has further reinforced that businesses are not immune to extraordinary incidents and highlights the importance of rapid decision making, especially for entrepreneurs who are willing to take risks and face the uncertainties of starting new ventures with both commercial and sustainability goals.

Undoubtedly, entrepreneurs should nurture their creative ideas wherever possible. However, translating these ideas into ventures that generate profit and create value requires a good grasp of accounting. Adam Kinnest, agrees. 

As a young entrepreneur and winner of the Gemstar Asia Program, Adam says that understanding accounting is critical for a start-up entrepreneur.

“More than ever, entrepreneurs of tomorrow need in-depth knowledge of business accounting and compliance. When an entrepreneur has a clear understanding of accounting fundamentals, they are better prepared for their start-ups' rapid change and scalable nature, allowing them to grow their business more sustainably with each business phase.”

As a recent graduate of Murdoch University’s MBA, Adam knows the longevity of any business is the bottom line. However, this longevity is dependent on a solid plan and strict management of cash flow, budgets and the ongoing revision of the financial strategies…Strong financial management from day one will result in a return on the initial business investment and growth.

No more considered as a profession which is about reporting the past and recording the present, accounting is an important strategic future planning tool that is constantly signalling what is happening in the business and its environment and supplying information to enable businesses to adapt to the challenges of tomorrow. To do this, there is a heavy reliance on digital transformation and information technologies. 

Today's technologies have enabled routine accounting work to be automated. Previously tedious clerical matters can now be transferred to modern and computerised accounting systems to handle accounting data with higher accuracy. This improved quality of information makes accounting more valuable in assisting end-users, like entrepreneurs, to focus on the critical and analytical thinking required in the decision-making process. Artificial intelligence and computerisation have had and continue to push the accounting profession to evolve and focus on interpreting data and analytics to keep up with reshaped business.

To prepare for the accounting career of the future, education providers also need to keep pace with these technological innovations and best practices. Recent research by Ms Jo Kestel from the Murdoch Business School supports that the accounting curriculum needs to provide opportunities for individuals to engage with the accounting profession in a variety of ways. Her research has specifically identified that students need to get to know the profession, understand how businesses operate and work with professionals both in the classroom and in work placements to be work-ready – irrespective of their career path.

Using a combination of blended learning and cloud-based accounting platforms, the new Bachelor of Commerce in Professional Accounting is an accelerated two-year undergraduate course co-designed with industry professionals to include these opportunities for a wide range of interactions - from client projects, field trips, business simulations, virtual site tours to workplace internships.

Career and work-integrated learnings are introduced right from the start of the degree to broaden the horizon regarding professional potentials and support authentic experiences that are personally relevant and meaningful. With analytical skills embedded in every subject, Murdoch Business School's programs encourage a philosophy of lifelong learning and preparing the next generation of accountants, and aspiring entrepreneurs, to be prepared for the future, where numbers are part of the decision-making cycle.

Click here to see how Murdoch University is making it their business to rethink business education.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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