Guess who I’m talking to this week?
Are you ready?
OK, not that Peter Frampton. Alas, we’re still waiting for our first rock-legend guest.
Instead, for us accounting and finance geeks, I’ve got something better. I’ve got the only other Peter Frampton I’m aware of — the one who’s president and co-founder of Color Accounting.
And if you’re not familiar with Color Accounting yet, you need to be. Frampton is going to teach us all about what Color Accounting is and why it’s so important to the future of our profession.
In this conversation, we cover:
- The origins of Color Accounting.
- How Color Accounting works.
- How finance and accounting professionals benefit when more people understand the language of accounting.
Listen to our conversation here.
What is Color Accounting?
The mission of the Color Accounting team is to explain accounting in plain English. They use visual, three-dimensional tools that help non-accounting folks learn what accounting’s all about in a fun, easy-to-learn way.
And why is that important?
The short, selfish answer is that we want more people to be interested in accounting and finance. Accounting is the language of business, and if business is going to get done, business people need to be fluent in this language.
The folks at the Wharton School of Business at the University of Pennsylvania agree. Here’s what they say in a blog post titled “Do You Speak the Language of Business?”
“Some say it’s English. Or Mandarin. Others contend it’s the subtle, culture-spanning clues picked up by reading facial expressions and other physical movements. But most agree that the true language of business is accounting. The story of any company, no matter the size, the industry, or the country of origin, is told through its financial records and reports. Income, debt, revenue versus expenses, compensation, and cost of retaining customers can all be found on financial statements. But if that’s true, why are so few executives fluent in the language?”
“It might not be important in early stages of your career. You can get by without being able to read a financial statement,” says Christopher Ittner, a Wharton accounting professor. “But at some point, you have to provide financial justification for what you’re doing, and you have to make decisions based on numbers that come from other people. If you don’t know what you’re looking at, and you don’t know the right questions to ask, your effectiveness is diminished.”
So, bottom line: If you want to be a business leader, you have to speak accounting.
That’s why the work that the folks at Color Accounting are doing is so important. They are teaching that language to the people who need to learn it most — business leaders, yes, but also accounting students, elementary students, and the employees of every other organization out there.
We all need to speak this language — every single one of us. Color Accounting can help.