Five ways accounting courses will instantly upgrade your business IQ

Ever walked out of a meeting, or read a memo from the executive suite, and said to yourself “Why did they decide that?”

Ever had an idea that you thought was great unceremoniously shot down with some vague comment about “the numbers won’t work.”

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Accounting and financial considerations are vital in nearly every decision made by a company, nonprofit or government agency. That includes the decisions made by your organization.

If you want to understand more about why certain decisions are made or, even better, make smarter, more persuasive decisions yourself, consider increasing your accounting knowledge.

_{Jeff Burgess, a partner at Grant Thornton, discusses the important role accountants play in the business world.}

Completing a Master of Accounting (MAC) program will help you upgrade your career. But even before you complete the degree, you’ll get an upgrade to your business savvy.

Here are five situations where you’ll be able to wow your peers and your managers — or at least understand how they really think — once you start taking MAC classes.

1. Sales are great, but in a team meeting your boss has asked everyone for ideas to reduce operating costs. You want to help, but you’re wondering why cost reductions are a focus if sales are up.

What you’ll learn while earning your MAC: Sales increases don’t always translate to immediate cash in the bank. Depending on when and how revenues are recognized, and what your company must do to provide products or services, higher sales can sometimes even mean a cash crunch in the short term.

Your instant upgrade: Knowing why your company needs to cut back on spending, even as sales rise, helps you make smarter recommendations about costs that could be reduced.

2. Your company’s making a widget that costs just $2 to manufacture, is flying off the shelves for $20 a pop. But profits aren’t exactly sky high – why?

What you’ll learn while earning your MAC: The cost of making a product is just one part of the cost of doing business. The “cost of goods sold” includes everything from salaries of manufacturing employees to raw materials. But the company has other expenses, too, including leases on office space, customer service costs and some employee salaries (maybe even yours!). Your company doesn’t start recording a profit until all those expenses are paid.

Your instant upgrade: Understanding that the costs of manufacturing a product are just part of your company’s expenses.

3. Your company has lots of cash on its balance sheet, but the stock price has dropped.

What you’ll learn while earning your MAC: Investors think more about the future than the current state of your company when they decide how much they’re willing to pay for your company stock. Your company’s sitting on a lot of cash? That might mean there’s no profitable new ventures to invest it in, which means growth prospects are poor. The result: Investors downgrade your stock and share prices sink.

Your instant upgrade: Understanding that stock prices depend mostly on how profitable a company will be in the future, and less on how it’s done in the past.