Accounting 101
(768 words, 6 min read)
You got an offer from a finance department at a tech company. You graduated college with an econ or a business degree, or both. This is your first or second full-time job.
What do you think you’ll learn on your first day?
Accounting, a.k.a. the subject that you want to avoid, or have a vague or no memory of.
Assuming you work for me. So let’s get started.
There are 4 things to learn today. Disclaimer: This is an extremely skinny version, please use it responsibly.
Financial statements:
When you log on to your bank website, you will see your “Current Balance”. That is called a balance sheet, a snapshot of where your finances are at this moment. Once you click into “Current Balance”, you see the details. Those details are called an income statement. We are not supposed to fudge these statements. Remember Enron? Some people went to jail.
Purchase cycle:
We buy stuff as a company. Once we make a payment, it is recorded in the system called ERP. Oracle and SAP are some of the well known brands. It gets a bit complicated from here…
Accrual accounting:
This is a rule that I don’t argue nor mess with. The gist of it is that we record expenses in the period when it occurred, not when we paid. Let’s say we paid $300 on October 1st for the services that will happen in December. Is this October expenses? No. It’s for December. Problem is, our system already recorded $300 in October when we paid. So not to enron ourselves, we need to make some adjustments to the system.
Close:
Imagine going through thousands of records like this $300 example. We need to comb through what we bought, when we paid, and when the services are rendered. Also make sure these expenses are recorded in the right periods and places. This painful but satisfying (it all ties out at the end) process is called close. Requires a lot of manpower and sharp eyes.
If you’ve been following me so far, congratulations on successfully finishing your first day.
***
When I started my new career as a yoga teacher, I wanted to let go of what I learned from my previous job. I didn’t want to repeat what I did. I was tied to my phone 24/7. I responded to my emails too quickly, sometimes causing more complexities and confusions. I was harsh and mean to the people that I cared about. I was work, and work was me.
So I decided to start fresh. What I didn’t realize was that if you start something from scratch, insecurities follow.
Are my classes helpful? Do people even like my class? What kind of yoga teacher can’t do handstands? Are students getting bored? I’m definitely not fit like those on Instagram. Why didn’t I have enough people in class yesterday? I hate marketing. I also hate how I look on zoom. The list goes on.
What is this about? Why do I need constant validation? Why do I have little confidence in my ability? I felt unsure about my job before. But I never doubted that I would eventually get better at it. Why is this happening? Because I’ve never done this before? Insecurities are not attractive.
Then I realized something. I’ve done this before. I have been teaching for most of my career.
Whether it's Accounting 101 (hope it wasn’t too boring), industry knowledge, Excel, how to write an email, contracts, or life as an analyst in general, I’ve been teaching. And I was really good at it.
I enjoyed watching my analysts learn and flourish. They were smart and accomplished. I trained and prepared them with tools that they could deploy when they moved onto their next endeavors. I did my best to teach them all I knew.
I am new at teaching yoga, but I am not new to teaching.
I know how to present information in a not-so-boring way. I have a dry humor that works for a certain group of people (I know, I am not everybody's cup of tea, and I am fine with that). I have an endless list of metaphors and analogies for the things that are usually boring. And I am a queen of repetitions.
So I’m not starting from scratch.
I will continue to learn, because I love what I do. I will get really good at it eventually. And at the same time, I will not sell myself short, nor be cocky in the process.
I am a work in progress. And I am ok with that.