ACCOUNTING AND ME

Accounting was one of the subjects I never liked in my early days in school.  I had always thought of accounting as calculating and auditing income and expenses and querying how money is spent.

I also have the notion that accountants do not like to spend money. That was all I knew and could say about them. Hence, I never liked the course and the practitioner.  The reason may be that I like to spend money when I have it and how I wish to spend it, as long as I can solve my immediate needs. My dad will always say Accountants are not sting but frugal. Well, I thought he says that to make them feel Good.

When I enrolled for the MMBA 3 class this year, I heard Finance is one of the courses we will be doing. I was yet to come to terms with the news only for me to see from the timetable that the first-ever MBA class I will attend is an accounting class, AHHHH!  That would have made me make up my mind not to enrol for the course. Well, it was as if Chinedu – the program manager had me in mind.

Then came the first day in class. I sat in front of my computer with my mind made up about this class. I was not going to understand a thing, but the 30 marks for attendance is very important. I need to start saving some marks to pass this dreaded course.

The Facilitator, Prof. Owolabi during his introduction mentioned that he had an engineering background and then switched to accounting. Ok! Thank God he mentioned that.  I now have something to encourage me. He patiently and in layman’s terms introduced the course and some of the accounting concepts. One of the things he mentioned was for us to build up our accounting vocabulary and familiarize ourselves with the terminologies and concepts. I made sure I wrote down even familiar words because they could have different meanings within the context of accounting.

One of the things that struck me was about an investor trying to make a decision to invest in a business. I thought all this while, once you package your idea, making it colourful with all the bells and whistles, an investor, either because he has a lot of money, or he just like the business idea, pumps his money into your business. Hmmm.

Now I understand that a good investor should have some knowledge of accounting. An investor would need answers to these questions before he decides to invest or not;

1. Should I invest in this business venture?
2. What is the return on investment?
3. What are the risks in this investment?
4. What is the time frame to get my returns?

Then I wondered, how am I going to sell my ideas and convince an investor to buy into my business.

Investors need a type of document to get all the answers to the questions they ask and to make their decision. This document is called THE STATEMENT OF FINANCIAL ACCOUNT.

This document or statement has 4 components, however, for me not to fail Prof. Owolabi’s course, there is a +1 to the statement. That means there are 4 +1 financial statements, and they are;

• Statement of Financial Position
• Statement of Profit or Loss
• Statement of Owners Equity
• Statements of Cashflow, and here comes the +1
• Other notes to the account

It made sense when he dived into the different statements with a sample annual report from Guinness Nigeria Plc’s financial report. Other notes to the account, which is the + 1, is a major component of the statement of account. The Guinness report was over 600 pages. All the components of the statement of account were covered in just one page per statement. However, the notes to the counts spanned over 450 pages. This statement has detailed information on the other 4 statements. That made a lot of sense.

After an hour and a half, the class ended. I could not believe how time flies. It was as if the class was just for 20 minutes. I enjoyed the class and wished it could continue.  Mind you, this was just the brush-up class. I went home and went through the slides and recordings. I searched the web for some other financial reports. This document I flipped over with much disregard and disinterest began to make sense to me. Now I feel like a manager.

#MMBA 3