Accounting Myths

Every time I go out to a restaurant, shop, or outing, someone in my group or family says, “You’re the accountants glasgow. How much is that?” He wants me to figure something out in my head. I will tell you a little secret… I am not a mathematician. I won’t calculate anything if my calculator doesn’t work. You will also learn a few secrets. Find below the Accounting myths.

#1 Accounting Myth

Accounting involves math. While you may use math to calculate the amount due, so does an engineer or salesperson, a marketing person, a lawnman, a hair stylist, etc. To get paid, you must calculate your owed amount, change if cash is used, and your commission percentage. Similar math is used by accountants. Accounting is the accounting of assets, liabilities income expenses, income, and so forth. But, the meat and potatoes of true accounting are research and storytelling. Do you enjoy solving puzzles? When you look at accounting numbers, you’re looking for pieces to fit into. You must use these numbers to communicate with the bank, shareholder, manager or owner of the business what they mean, how they can be used, and what they can expect for the future. Analytics, not algebra.

#2 Accounting Myth

Accountant = Tax Preparer/IRS Agent. Oh so wrong, wrong, wrong. When you go to a major franchise tax chain, your taxes are likely to be prepared by a “tax preparer”, NOT an accountant. A degree in Accounting is what defines an accountant. Yes, I did my taxes right out college while working for a public CPA company. However, this was only because my partner had a few clients in tax. I mostly audited businesses. This does NOT mean that I did a tax audit. This means I went into the company and looked over their books. Then, I would present a report to them on areas that need improvement and areas that look good. This is a short summary of a company audit. Private accountants are often employed to compile financials for owners and managers. Others work in fraud detection or investigation. While others just consult on various topics, many accountants work in the private sector.

When someone claims they are an accountant, be cautious. Bookkeepers and secretaries often say these things, and they don’t know the difference between a journal and a coffee maker. This is not meant to denigrate secretaries and bookkeepers. I respect all of them and appreciate their hard work. I will not tell clients that they are accountants. This is not fair and accurate representation of who they are or their qualifications.