All too often Elizabeth Pitu hears people say that accounting and other subjects at school did little to prepare them for the practicalities of running their own business.
A teacher of accounting for 26 years, Elizabeth has always suspected the subject matter was a little too academic and theoretical. Now, with exposure to small business owners, she’s convinced the school curriculum for accounting in New Zealand (and she suspects other countries too) needs a rethink.
“In my experience accounting at school is not as real or practical as it should be in terms of running a small business,” she says. “Understanding the concept is quite different to doing things like working out what to cost your work at, making sure you get a market price and allowing for the advertising you might need to do. Most business owners end up learning the hard way.”
In the hope of convincing policy makers to consider changes to the way accounting is taught in schools, Elizabeth has embarked on a research project through Waikato University titled ‘Financial Skills for Small Business Owners’.
This involves interviewing small business owners about what financial skills they think would have been useful to learn in school. Here are the most common gaps Elizabeth has identified so far:
- How to price products/services/concepts
- Coding bank statements
- Using accounting technology beyond entry level
- Better ways to manage debtors
- How to forecast cashflow
- Doing a GST/VAT/Sales Tax return
- Allowing for the vagaries of tax and other deductions when paying wages
- The need to put money aside to pay taxes
Elizabeth says being able to access technology such as Xero that’s easy to understand and use, has been acknowledged by several research participants as key to their achieving business success.
We’d love to hear what you think would be useful for prospective business owners to learn in school in the comments section below. Or you can let Elizabeth know on her Facebook page.