[Common Language of Business🧮] What is the appeal of bookkeeping and what are the tips for learning it?🔥: Nikkei Shimbun Commentary 2023/12/28

　With the attention on reskilling (re-learning) for working adults and others, many people are likely interested in bookkeeping. Bookkeeping is often perceived as detailed and difficult, but it has been used for a long time as a universal business language and is also useful for understanding the basics of accounting. What are the charms of bookkeeping and the tips for learning it? We asked Director Hiroki Yoshino of EY Business Partner (Chiyoda, Tokyo), an affiliate of EY Tax Co.

　--To begin with, what is bookkeeping?
　"Many people probably have an image like a household account book. A household account book is single-entry bookkeeping that records deposits and withdrawals. Bank passbooks and the like are of this type. On the other hand, corporate accounting uses double-entry bookkeeping, which records by separating causes and results. For example, if you sell a product for 10 yen in cash, you journalize it as 'Debit: Cash 10 yen, Credit: Sales 10 yen.' The 10 yen sale is the cause, and the receipt of 10 yen in cash is the result. By recording daily economic activities in this way, financial statements are created."

　"The history of bookkeeping is old, and among the literature on double-entry bookkeeping, 'Summa de arithmetica, geometria, proportioni et proportionalita' written by the medieval Italian mathematician Luca Pacioli, known as the 'father of modern accounting,' is well known. The principles from over 500 years ago still correspond to today's complex economic transactions, and I feel the greatness of bookkeeping."

　--What are the advantages of learning bookkeeping?
　"Companies create financial statements that record sales, profits, assets, and liabilities. These represent the financial condition and operating results for one year, and listed companies are required to disclose them. By looking at these, you can easily judge things like 'Company A is profitable' or 'Company B's management is sluggish.' Even without bookkeeping learning experience, you can understand financial statements to some extent, but if you learn bookkeeping, you will be able to understand financial statements more deeply."

　--Specifically, what will you be able to understand?
　"The numbers in the balance sheet, which records assets and liabilities, and the profit and loss statement, which records sales and profits, will no longer be just a list, but you will be able to see various connections and meanings. Even just by learning elementary bookkeeping, you can understand with a sense of reality how the two are linked. You can logically derive specific reasons for the differences between Company A and Company B, even in the same industry."

　"Looking at the world, there are various accounting standards for companies, such as international standards and US standards, in addition to Japanese standards. Regardless of the differences in accounting standards, the bookkeeping concept that serves as their principle is universal, so by studying bookkeeping, you will acquire the foundation to understand accounting standards around the world. This is why bookkeeping is also called the common language of business."

　--Many people have a sense of aversion to bookkeeping. What are the tips for learning it?
　"Rather than blindly learning journal entries, it is important to grasp the overall flow and the flow after making journal entries, in other words, the rough system. If you are obsessed from the beginning only with what kind of account titles to use for such transactions and how to journalize them, you will lose sight of the whole."

　"Recently, there are many bookkeeping explanation videos on YouTube and the like, and it is also meaningful to utilize such videos. Once you progress to a certain extent in your learning, your understanding will deepen at an accelerating pace. Economic transactions are very complex, but bookkeeping can simplify any transaction. If you are investing in stocks, you might want to look not only at chart analysis but also at the financial statements of the companies you are investing in, and compare sales and net income among companies. It is also interesting to calculate the equity ratio and the like yourself to see the safety of the company."

AI use also requires human judgment

　--With the evolution of artificial intelligence (AI), there is also an opinion that bookkeeping should be left to machines.
　"The replacement of existing accounting operations by AI will continue to advance in the future. Especially for simple tasks such as aggregation work, humans may become unnecessary if AI is introduced. However, tasks such as confirming processing results and analyzing the meaning of numbers are tasks that humans will continue to be responsible for, and bookkeeping knowledge will not fundamentally become unnecessary. Also, although AI will be used more and more in the area of judgment in the future, as long as it is AI imitating human judgment logic, I do not think that judgment based on human bookkeeping knowledge will become unnecessary."

　"Business numbers are truly living things, and for stakeholders of financial statements, including managers, insights by AI from patterns such as past cases are not enough. It is necessary to think more deeply about the meaning of numbers while considering various events being faced, and to make judgments." (Omitted)

　Hiroki Yoshino: Graduated from Chiba University in 2007.
After working at a tax accountant office, he worked on accounting outsourcing business for foreign-affiliated companies at a major accounting firm. Joined EY Business Partner in 2022 and is in his current position. US Certified Public Accountant.