Accounting Math: What Skills Do You Need to Be an Accountant?
Written by: Hilbert College • Jan 12, 2024
Accounting Math: What Skills Do You Need to Be an Accountant? ¶
Accountants draw on their math skills to create public financial statements, including individual tax returns and complex SEC filings for Fortune 500 companies. They also use math to audit financial documents, investigate fraud and recommend business strategies.
But how much accounting math do you need to become an accountant?
Math ranks among the most essential skills for accountants and financial analysts. But that doesn’t mean accountants have to take upper-division math classes in college. A bachelor’s in accounting builds the math skills that accountants, auditors and financial analysts use in their jobs.
What Math Skills Do Accountants Need? ¶
Accountants use math skills every day. But what are the key accounting math skills that accountants must develop? While math majors might explore number theory and logic, accountants typically draw on applied math principles. Here are the key math skills that accountants need.
Arithmetic ¶
Basic arithmetic—addition, subtraction, multiplication and division—is at the core of the accounting math skills that accountants need. Companies rely on accountants to square their balance sheets, ensuring that the organization stays in the black. Accountants calculate an organization’s assets, liabilities and equity using arithmetic.
Accounting majors bring years of experience with arithmetic, and accounting classes show them how to apply their arithmetic skills in the accounting field.
Percentages ¶
Accountants calculate the amount of interest owed on a loan and how companies should allocate their assets. As a result, accountants need to know how to work with fractions, decimals and percentages, including how to convert percentages. The ability to manage percentages allows accountants to assess risk, calculate future losses or gains, and precisely interpret financial data.
Statistics ¶
Auditors and forensic accountants rely on statistical analysis to identify irregularities in financial documents and select representative statistical samples for reliability assessments. Many other accountants also use their statistics skills on a daily basis, whether to identify trends, forecast earnings or assess risk. Statistical skills help accountants work efficiently and accurately.
Algebra ¶
Double-entry accounting requires an understanding of algebra to balance debits and credits. Accountants also use algebra to calculate liabilities and depreciation. Understanding algebraic equations helps accountants manage financial data and recommend strategies.
Probability ¶
Specialists in risk management draw on probability theory to determine the likelihood of various outcomes. Auditors also use probability to determine the accuracy of financial projections. Finally, managerial accountants often base their recommendations on the probability of future events.
Financial Mathematics ¶
The mathematical subfield of financial mathematics uses math to solve financial problems. For example, assessing business performance, modeling growth potential and calculating profitability all require financial mathematics.
Blending arithmetic, data analysis, probability and other mathematical approaches, financial mathematics represents an essential skill for accountants. Coursework in financial formulas, modeling and data analytics develops strong financial mathematics skills.
Other Essential Accounting Skills ¶
Accounting math is only one of many important skills for accountants. In addition, the ability to analyze financial data, solve accounting problems, communicate with clients and identify errors are critical accounting skills.
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Analytical thinking: Accountants evaluate complex financial statements to find errors, recommend accounting strategies and file accurate accounting statements. Strong analytical skills help accountants complete essential tasks while maintaining high standards of accuracy and ethics.
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Detail-oriented: An attention to detail benefits accountants and auditors, who must catch irregularities in financial documents and ensure that reports meet regulations for financial reporting. Accountants need to uphold industry standards while managing large amounts of financial information.
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Communication: CPAs communicate with clients, while auditors regularly interact with business professionals. The ability to collaborate, explain accounting concepts to nonspecialists and manage teams helps accountants advance their careers.
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Organization: Accountants often manage a large workload, which requires strong organizational skills. And because many accountants operate on strict deadlines, the ability to manage time is a critical skill for accountants.
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Problem-solving: Management accountants, budget analysts and auditors must apply their accounting skills to solve complex problems. Identifying financial trends, analyzing budgets and developing innovative solutions require strong problem-solving abilities.
Accounting students develop these essential skills while completing a bachelor’s degree in accounting. Early-career accountants hone skills in specializations such as public accounting, auditing or financial accounting by gaining work experience or pursuing a master’s degree in accounting.
Benefits of Earning an Accounting Degree ¶
An accounting degree provides focused career training. Earning a bachelor’s degree in accounting prepares graduates for entry-level roles as an accountant or auditor. These in-demand roles report a median annual salary of $78,000 in May 2022, according to the U.S. Bureau of Labor Statistics (BLS).
While earning a bachelor’s degree in accounting, students take courses in financial accounting, internal auditing, tax accounting and other core accounting specialties.
Accountants benefit from strong demand. Factors such as economic growth, globalization and the complexity of tax law drive a need for accountants and auditors. As a result, the BLS projects over 125,000 accounting job openings annually from 2022 to 2032.
Some accounting careers require additional coursework after completing an accounting degree. For example, CPAs with a bachelor’s degree in accounting must complete a total of 150 college credits to qualify for certification.
Earn Your Accounting Degree at Hilbert College Global ¶
Learn how to prepare financial statements, audit documents and apply accounting math to solve complex problems in the online Bachelor of Science in Accounting program at Hilbert College Global.
As an accounting major, you’ll study math and data analytics while exploring accounting ethics, financial regulations and tax law. The 120-credit online program prepares graduates for careers as accountants, auditors and financial analysts. Discover how Hilbert College Global can help you get started on an accounting career path.
Recommended Readings
What Can You Do With a Bachelor’s in Accounting?
Sources:
Forbes, “The Accounting Skills You Need for a Successful Career”
Indeed, “Financial Mathematics: Definition and Real-World Applications”
Investopedia, “What Is the Accounting Equation, and How Do You Calculate It?”
Journal of Accountancy, “Top Soft Skills for Accounting Professionals”
U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, Accountants and Auditors
