4 ms·

Pardon my ignorance if any, but I find financials and accounting as quite boring things. Most problems in these are about tracing numbers, reconciliation and mi

by zerop 5y ago

Pardon my ignorance if any, but I find financials and accounting as quite boring things. Most problems in these are about tracing numbers, reconciliation and mismatches. What thril one can face in these areas? Any examples of challenges you see ?

acjohnson55 5y ago
I felt the same way until I decided that I needed to understand what was happening with every dollar my wife and I took in, in order for us to make decisions like how much we should invest or keep in savings for emergencies. I ran into all sorts of issues reconciling different information and had to revisit my modeling several times. Only after discussing with my brother, who went to business school, did I realize I was gradually discovering my own half-assed version of accounting. Then I started reading Wikipedia and Investopedia about accounting topics, and it seemed a lot less dry.
conductr 5y ago
I think accounting has that reputation for a reason, it really is bean counting All this is theory and essentially a bunch of "hello world" equivalents. In the real world, corporate accounting is much more complex for most companies. I don't know if it makes it more thrilling, but it can be challenging.
calderarrow 5y ago
I'm a CPA and have undergraduate and graduate degrees in accounting. To be completely honest, the bulk of financial accounting is not that thrilling. The bulk of the profession is spent keeping up with the regulations for tracing numbers, reconciling schedules, and "accounting" for things. But let me share what makes the field thrilling for me: Accounting is a universal language for valuing time. Clocks allow us to measure time, but accounting allows us to assign time value. It, quite literally, allows us to compare apples to oranges (or Apple to Amazon). This is important because time is the single most valuable resource any of us have. It's both the scarcest resource and the most liquid, but it's only liquid in one direction. Time can be exchanged for anything: food, drink, entertainment, love, death. But nothing can be exchanged for more time in my life. We can, however, exchange our time for the time of others. Without being able to do this, our quality of lives would be terrible. But how many of my programming-hours is worth a T-shirt? How many chai-latte-making-hours is worth a heart transplant? It's not enough to count the hours, we have to assign value to the hours. Accounting is the system and language we use to value different units of time. It's a universally applicable language that is consistent in its application. It applies to a child running a lemonade stand and trillion dollar multinationals. Whether you're a charity or a bank, a government or a revolutionary, the rules of accounting are applicable to whatever it is that you're doing, whatever is it that you've done in the past, and whatever it is that you'll do in the future. Currently, I work as a software engineer for a fintech company, and I find that the most fun I have at work is engineering something from scratch. Thinking of the architecture, mocking up the algorithms, and implementing a new solution to a problem is vastly more thrilling than maintaining existing systems or hotfixing minor bugs. Yet, the bulk of my job is maintaining systems that other people built. And, if I'm being honest, sometimes boring. Similarly, the thrill of accounting is in learning how to more appropriately account for transactions, new goods, or new services. How should we account for someone who mines a crypto currency? How should we account for someone who trades a crypto but doesn't mine it? How do we account for auto insurance for self-driving cars? These are the thrilling aspects of accounting. But for the bulk of the job, it's probably a bit boring. Working on a team to fix other people's technical mistakes. Reviewing documentation, getting access to various systems. Sounds a bit like software engineering!
cascom 5y ago
my two cents - bookkeeping (the act of doing all the transactions that result in financial statements) is quite boring, but at the end of the day the purpose of accounting is to provide information around the financial condition and results of the business, which it turn is and should be used to make decisions around the future of the business. Accounting (in its various forms (financial, cost, mgmt, tax)) should help you answer questions like: what is our most profitable product? how much does it cost to make that product? was that acquisition/investment successful? sales are going up and net income is positive, why don't we have any cash? But when you get under the hood, there is a lot of subjectivity around how to make accruals, allocate revenue and expenses, or capitalization policies. Furthermore, many people in different organizations are incented on financial metrics (sales, EBITDA, EPS, equity value, etc) and as such have are keenly focused on gamesmanship around the calculation of those numbers.
rchaud 5y ago
> What thril one can face in these areas? Any examples of challenges you see ? Mission Briefing: Your CEO has blurted out a revenue growth estimate for H2 2022 on an investor conference call, without prior vetting from the CFO. Mission Objective: Put forward a plan for modifying revenue recognition rules on sales so that the CEO's estimate can be met. Your plan must be compliant with GAAP principles and cannot involve backdating or forward-dating revenue by adjusting the refund eligibility dates.
- wutangson1 5y ago
  Could it all be so simple? At the very least, would the Statement of Cash Flows need to be massaged as well?
r00fus 5y ago
I see accounting as the money version of a historical account of a company. In that vein, it's the complete data flow of money movements within said company - data from which you could determine strategic priorities, fraud, and power structure, among other things with the right analysis. I wonder if there's a good flick that shows how powerful a forensic accountant can be.
- PopAlongKid 5y ago
  >I wonder if there's a good flick that shows how powerful a forensic accountant can be. "The Accountant" starring Ben Affleck has it as a plot element.
whartung 5y ago
Modern data processing is all about work flows and data flows, and accounting is gorged with that stuff. There's a reason that there are 3000 different businesses, but 6000 different accounting packages. At a glance, they're all the same. But accounting data processing is all about the last mile. That 10% that the company does differently. Now, when folks say "accounting" they typically mean General Ledger, Accounts Payable, and Account Receivable (GLAPAR as we called it). In truth, it's really about the General Ledger, everything is else is about feeding the GL. Most of the reports come from the GL. GL is where all the numbers are tallied up. AP is stuff you owe people. AR is stuff people owes you. Then you have the distribution systems that tend to fee AP and AR. (Mind these are all broad strokes.) Consider an Amazon order. You went to the site and ordered a radio and stick of deodorant. Honestly, the mind reels about the accounting impact of that order. Amazon has to account for the money you're paying, the value of the goods sold, the taxes (potentially multiple jurisdictions), the shipping, and the credit card fees. Meanwhile, the costs of those goods include not just the value of the goods, the labor involved in taking off a truck, putting it on a shelf, taking it off a shelf and putting it on a truck. The cost of the box. The cost of the label. ALL of that hits the GL in to its own slot, in its own account. The total number of GL entries for a single order is probably dozens, even for simple orders (no doubt it gets more fun with associates and folks selling through Amazon, etc. etc.). This is where all that chasing of imbalances happens. With double entry accounting, everything has to balance. And worse, not only is it explosive in its detail, it can CHANGE, at any time! Business change their minds on how they track things, what they want to track, when they want to track. It could be marketing asking questions, it could be regulatory, it could be anything. It's a very dynamic environment. At one place I had to rewrite pricing and discount logic every 6 months as they came up with new schemes. (Oh, and don't forget, all of the OLD schemes are still in play -- don't think you can forget about those when someone calls up 90 days later asking for a credit). And you'd think you could do something "generic". No. The marketing people are very creative. At one place, a smaller business, probably cut 100 checks a week. They had a product canceled. Thousands of refunds. We had to run several large boxes of checks through the band printer. I can not convey to you briefly how impactful that process was. "Cutting a check", I hope you can imagine, is a very controlled process, and we had to stomp through the lot of the internal workflows to get that done. Lots of eyes were on the process. (Remember, the pre-printed check numbers had to match the transactions in the system, let's hope the paper doesn't jam.) Outside in, it seems stupid, boring, and silly. When you're in the thick of it, it's like a rocket launch. Lot of time invested it getting this all right. As data processing people, we strive to manage complexity. Our job is to make the systems and processes accessible to the people who rely on them, and as well as adapt to their ever changing needs for the business. Working back office accounting and distribution is a surprisingly target rich environment for interesting work that can be crushed in detail. But our job is to wrangle that. You don't need to be an accountant to do this, but it's good to learn the vocabulary: debits, credits, journals, posting, agings, etc. etc. And, finally, everyone does this. Having "accounting" experience pretty much qualifies you for all sorts of businesses. Each one you have to learn a little bit of domain knowledge, but the accounting terms themselves are a common grounding that gets your foot in the door. I've written systems for warehousing, meat brokers, paint shops, plant growers, auto parts, and magazine publishing, just as a start. Honestly, it beats healthcare.

by zerop 5y ago

acjohnson55 5y ago

I felt the same way until I decided that I needed to understand what was happening with every dollar my wife and I took in, in order for us to make decisions like how much we should invest or keep in savings for emergencies. I ran into all sorts of issues reconciling different information and had to revisit my modeling several times. Only after discussing with my brother, who went to business school, did I realize I was gradually discovering my own half-assed version of accounting. Then I started reading Wikipedia and Investopedia about accounting topics, and it seemed a lot less dry.

conductr 5y ago

I think accounting has that reputation for a reason, it really is bean counting All this is theory and essentially a bunch of "hello world" equivalents. In the real world, corporate accounting is much more complex for most companies. I don't know if it makes it more thrilling, but it can be challenging.

calderarrow 5y ago

I'm a CPA and have undergraduate and graduate degrees in accounting. To be completely honest, the bulk of financial accounting is not that thrilling. The bulk of the profession is spent keeping up with the regulations for tracing numbers, reconciling schedules, and "accounting" for things. But let me share what makes the field thrilling for me: Accounting is a universal language for valuing time. Clocks allow us to measure time, but accounting allows us to assign time value. It, quite literally, allows us to compare apples to oranges (or Apple to Amazon). This is important because time is the single most valuable resource any of us have. It's both the scarcest resource and the most liquid, but it's only liquid in one direction. Time can be exchanged for anything: food, drink, entertainment, love, death. But nothing can be exchanged for more time in my life. We can, however, exchange our time for the time of others. Without being able to do this, our quality of lives would be terrible. But how many of my programming-hours is worth a T-shirt? How many chai-latte-making-hours is worth a heart transplant? It's not enough to count the hours, we have to assign value to the hours. Accounting is the system and language we use to value different units of time. It's a universally applicable language that is consistent in its application. It applies to a child running a lemonade stand and trillion dollar multinationals. Whether you're a charity or a bank, a government or a revolutionary, the rules of accounting are applicable to whatever it is that you're doing, whatever is it that you've done in the past, and whatever it is that you'll do in the future. Currently, I work as a software engineer for a fintech company, and I find that the most fun I have at work is engineering something from scratch. Thinking of the architecture, mocking up the algorithms, and implementing a new solution to a problem is vastly more thrilling than maintaining existing systems or hotfixing minor bugs. Yet, the bulk of my job is maintaining systems that other people built. And, if I'm being honest, sometimes boring. Similarly, the thrill of accounting is in learning how to more appropriately account for transactions, new goods, or new services. How should we account for someone who mines a crypto currency? How should we account for someone who trades a crypto but doesn't mine it? How do we account for auto insurance for self-driving cars? These are the thrilling aspects of accounting. But for the bulk of the job, it's probably a bit boring. Working on a team to fix other people's technical mistakes. Reviewing documentation, getting access to various systems. Sounds a bit like software engineering!

cascom 5y ago

my two cents - bookkeeping (the act of doing all the transactions that result in financial statements) is quite boring, but at the end of the day the purpose of accounting is to provide information around the financial condition and results of the business, which it turn is and should be used to make decisions around the future of the business. Accounting (in its various forms (financial, cost, mgmt, tax)) should help you answer questions like: what is our most profitable product? how much does it cost to make that product? was that acquisition/investment successful? sales are going up and net income is positive, why don't we have any cash? But when you get under the hood, there is a lot of subjectivity around how to make accruals, allocate revenue and expenses, or capitalization policies. Furthermore, many people in different organizations are incented on financial metrics (sales, EBITDA, EPS, equity value, etc) and as such have are keenly focused on gamesmanship around the calculation of those numbers.

rchaud 5y ago

> What thril one can face in these areas? Any examples of challenges you see ? Mission Briefing: Your CEO has blurted out a revenue growth estimate for H2 2022 on an investor conference call, without prior vetting from the CFO. Mission Objective: Put forward a plan for modifying revenue recognition rules on sales so that the CEO's estimate can be met. Your plan must be compliant with GAAP principles and cannot involve backdating or forward-dating revenue by adjusting the refund eligibility dates.

wutangson1 5y ago
Could it all be so simple? At the very least, would the Statement of Cash Flows need to be massaged as well?

r00fus 5y ago

I see accounting as the money version of a historical account of a company. In that vein, it's the complete data flow of money movements within said company - data from which you could determine strategic priorities, fraud, and power structure, among other things with the right analysis. I wonder if there's a good flick that shows how powerful a forensic accountant can be.

PopAlongKid 5y ago
>I wonder if there's a good flick that shows how powerful a forensic accountant can be. "The Accountant" starring Ben Affleck has it as a plot element.

whartung 5y ago

Modern data processing is all about work flows and data flows, and accounting is gorged with that stuff. There's a reason that there are 3000 different businesses, but 6000 different accounting packages. At a glance, they're all the same. But accounting data processing is all about the last mile. That 10% that the company does differently. Now, when folks say "accounting" they typically mean General Ledger, Accounts Payable, and Account Receivable (GLAPAR as we called it). In truth, it's really about the General Ledger, everything is else is about feeding the GL. Most of the reports come from the GL. GL is where all the numbers are tallied up. AP is stuff you owe people. AR is stuff people owes you. Then you have the distribution systems that tend to fee AP and AR. (Mind these are all broad strokes.) Consider an Amazon order. You went to the site and ordered a radio and stick of deodorant. Honestly, the mind reels about the accounting impact of that order. Amazon has to account for the money you're paying, the value of the goods sold, the taxes (potentially multiple jurisdictions), the shipping, and the credit card fees. Meanwhile, the costs of those goods include not just the value of the goods, the labor involved in taking off a truck, putting it on a shelf, taking it off a shelf and putting it on a truck. The cost of the box. The cost of the label. ALL of that hits the GL in to its own slot, in its own account. The total number of GL entries for a single order is probably dozens, even for simple orders (no doubt it gets more fun with associates and folks selling through Amazon, etc. etc.). This is where all that chasing of imbalances happens. With double entry accounting, everything has to balance. And worse, not only is it explosive in its detail, it can CHANGE, at any time! Business change their minds on how they track things, what they want to track, when they want to track. It could be marketing asking questions, it could be regulatory, it could be anything. It's a very dynamic environment. At one place I had to rewrite pricing and discount logic every 6 months as they came up with new schemes. (Oh, and don't forget, all of the OLD schemes are still in play -- don't think you can forget about those when someone calls up 90 days later asking for a credit). And you'd think you could do something "generic". No. The marketing people are very creative. At one place, a smaller business, probably cut 100 checks a week. They had a product canceled. Thousands of refunds. We had to run several large boxes of checks through the band printer. I can not convey to you briefly how impactful that process was. "Cutting a check", I hope you can imagine, is a very controlled process, and we had to stomp through the lot of the internal workflows to get that done. Lots of eyes were on the process. (Remember, the pre-printed check numbers had to match the transactions in the system, let's hope the paper doesn't jam.) Outside in, it seems stupid, boring, and silly. When you're in the thick of it, it's like a rocket launch. Lot of time invested it getting this all right. As data processing people, we strive to manage complexity. Our job is to make the systems and processes accessible to the people who rely on them, and as well as adapt to their ever changing needs for the business. Working back office accounting and distribution is a surprisingly target rich environment for interesting work that can be crushed in detail. But our job is to wrangle that. You don't need to be an accountant to do this, but it's good to learn the vocabulary: debits, credits, journals, posting, agings, etc. etc. And, finally, everyone does this. Having "accounting" experience pretty much qualifies you for all sorts of businesses. Each one you have to learn a little bit of domain knowledge, but the accounting terms themselves are a common grounding that gets your foot in the door. I've written systems for warehousing, meat brokers, paint shops, plant growers, auto parts, and magazine publishing, just as a start. Honestly, it beats healthcare.