Blog Posts

Trooping The Colour

6/14/2018

Color Accounting Partners from around the world assembled last week in London to discuss our quest to advance accounting literacy globally.

With participants from Australia, China, Canada, India, USA, South Africa, Greece, the Caribbean and UK, it was also an opportunity to observe another color spectacle, Trooping The Colour.

Photo by Mosa Moseneke on Unsplash

This British tradition of Trooping The Colour, which goes back to the 1600s, has hundreds of marching and cavalry troops in their finest, presenting themselves to the British sovereign and marking her birthday.

Today of course, it is an excuse for pomp and ceremony which the Brits do like no other.

The assembled Color Accounting trainers had the pleasure of watching the parade from a vantage point near Trafalgar Square, capped off by a flyover from the Royal Air Force, Spitfires and all.

While the armies of yore used color to enable soldiers to recognize their own companies, we use color to logically code concepts of company finance.

And while the empire has long since shrunk, the quest to spread accounting literacy to the world continues to expand, and took a big, fun and fabulous leap forward last week. As you can see below.

Peter

Attendees to ColorCon18, our global Partners conference, assembled in London, England

The Problem with Price Tags

5/31/2018

Certainty can be comforting. Knowing where your next meal is coming from and where you will lay your head at night allows one to focus on other challenges throughout the day.

But do we similarly crave certainty when it comes to knowing the price of things? Are we better or more poorly served by a Prix Fixe economy?

A shelf full of peanut butter jars, all marked with the same price tag, may make our purchase decision easier but does it give us the best value? Does it limit the merchant's profit potential?

And has the humble price tag lulled us into a sense of certainty that things have a fixed value?

For most of history people would haggle for everything in the market. Then, in the mid-19th Century in the US, Quakers and others decided that charging different people (whom God saw as equal) different prices was immoral. Hence the fixed-price tag.

At first people were suspicious of the tags. But they got used to the idea and, over time, empires like Macy’s were born on the back of them.

Now they might be on their way out again. Variable pricing is creeping back into our lives in some unexpected places. From Uber surge pricing to airlines that look at all sorts of factors to quote you a ticket price, including apparently whether you are browsing with a Mac or a Windows PC.

Variable pricing means you need to pay more attention. That's my advice, for what it's worth.

Peter

Is Accounting Precise?

5/24/2018

When you say “accounting," many people immediately think “precision."

After all, famously, if you have $101.11 on one side of the balance sheet, you’ll have $101.11 on the other. That is an absolute truth. This 100% exact mirroring sets the tone.

But is accounting really precise?

In another respect, accounting isn't precise at all. At least not in the sense of being "certain" or "absolute."

On the way to coming up with the symmetrical numbers of the balance sheet, there's a whole lot of estimation and subjectivity.

For example, to decide what an asset is worth, should we refer to what we paid for it, what we could sell it for, what two reasonable people think it’s worth, what the market thinks it’s worth, or perhaps the cash that will flow from it? Some might arrive at larger numbers, others smaller.

There's no single truth and you might say it's an informed guessing game.

Like asking how long is a piece of string, the closest you'll come to a truly precise answer is: "Twice as long as half its length."

Peter

Five Reasons People Don't "Get" Accounting

5/17/2018

Accounting suffers a "can’t see the forest for the trees" problem.

We accountants are so immersed in the language and practices of accounting, which have evolved over hundreds of years, that we’ve lost sight of our bad habits.

Here are five of them.

Photo by Toa Heftiba on Unsplash

1. We Use Different Words for the Same Thing
For example, earnings, profit, net profit, income, and net income are all used to mean the same thing.

2. We Use the Same Word for Different Things
In the UK “Income” means revenue, the top line. In the US “Income” usually means profit, the bottom line. But not when you’re talking about Rental Income, or Interest Income.

3. We Use Weird Words
Like debit and credit - which have less meaning than people believe. (That’s why Color Accounting uses color instead.)

4. We Use Paradoxical Words
Prepaid Expenses aren’t expenses, they’re assets.
Deposits (such as those received by Tesla for future Model 3 deliveries) aren't revenue. They are liabilities.

5. We Collapse the Duality
There’s an inherent duality in accounting. The duality captures on the one hand what we do with our resources, and on the other where those resources come from. For example, we put cash in our bank account, which came from our work revenue. The bad habit is describing the revenue as the cash.

To boost the confidence of our students to engage powerfully in financial conversations at work, we show them that “The confusion isn’t your fault, it’s ours. So ask away.”

We accountants have a lot to account for.

Peter

Learning To Read The Fine Print

5/10/2018

The Fine Print? You probably think I’m talking about how to interpret legalese. Like the contracts that none of us read (but say we have) when we download apps.

But I’m not. I’m talking about how to read any text that’s printed in a very small font. There’s a story here.

I was leading a seminar for bankruptcy attorneys in Southern California last week. It was over dinner. It was fun. It was collegial. It was great learning.

But when I handed out the case study, one of the participants exclaimed “How can I see that total? It’s tiny!”

To which I replied, “Use the magnifying glass on your phone. If you press the button on your iPhone three times it brings up a magnifying glass.”

And - as they say in the classics - the room went wild. I lost them for at least five minutes as chattering people excitedly turned on this Accessibility function of their phones and prodded their neighbors devices.

I just stood at the front and laughed out loud. Middle aged eyes like mine had hijacked the room.

Everybody went home thrilled at what they’d learned. Which, they reassured me, wasn’t just how to read dimly lit restaurant menus.

Peter

Will We See You In San Diego?

5/3/2018

No place in the world is quite like Southern California. Dry climate, miles of beaches and multi-cultural adventures around every corner.

Next week San Diego will be featuring another attraction: the 2018 ATD International Conference and Exhibition, being held Sunday through Wednesday at the convention center.

Photo by Cheyenne Knowles on Unsplash

This weekend over 10,000 attendees and exhibitors will begin descending upon this seaside city to learn from more than 400 experts at over 300 sessions.

Keynote speakers include former U.S. president Barack Obama, British author and business consultant Marcus Buckingham, and leadership guru Ken Blanchard.

The Color Accounting team never misses the annual Association for Talent Development confab, no matter where it is held.

We have found it to be the single best place to connect with our partners, peers and clients, whilst staying on top of the latest learning techniques and technologies.

Will you be at ATD in San Diego as well?

You can find us at Booth #2220. Please pop by and say g'day!

Peter

The Journey from Bone to Silicon

4/26/2018

People have been counting what’s around them for a very long time.

20,000 years ago Paleolithic humans had the Ishango Bone. Today Amazon Web Services is pitching to help the Pentagon track their possessions with cloud computing worth billions. That’s quite a journey for accountability.

The evolution of counting hardware from bone to silicon is astounding.

The Ishango bone is possibly the world’s oldest counting tool. It was found in the 1960s in the Congo, near the border of Uganda.

And at the other extreme, we all know how the rise of cloud computing is changing our lives. Online accounting services are just a fraction of it.

But the history of accounting over those twenty millennia is more than a story of updated hardware. The greater story is how humans invented a system of tracking not just objects, but the rights to those objects.

That is what makes the difference between simple tallying and accounting. Accounting tracks not only what objects of value you have, but also who has claims on them.

Tallying is “What". Accounting is both "What" and "Whose." This duality of having and claiming is what gives a balance sheet its two sides.

The next stage of the journey is solving how to take care of what we all share, like the oceans and the atmosphere.

Peter

The Ishango bone on exhibition at the Royal Belgian Institute of Natural Sciences
By Ben2 - Own work, CC BY-SA 3.0,
https://commons.wikimedia.org/w/index.php?curid=3166443

Teaching Computer Skills Without A Computer

4/19/2018

It’s heartbreaking to see how resource challenged some children are. That’s what I felt when I saw the pictures of a teacher drawing a computer onto a blackboard with chalk.

But then I delighted at the brilliance of Richard Appiah Akoto, a middle school teacher in rural Ghana. He is surely a master of priceless skills such as improvisation and creative thinking.

Richard Appiah Akoto drawing a Windows computer screen on a blackboard

In a series of three photographs which became an Internet sensation, the 33 year-old Mr. Akoto is seen teaching his class how to use Microsoft Word on a blackboard, as his students copy his handiwork into their paper notebooks.

Why, you might ask, would you bother teaching computer skills to students with no computers? The answer is, in order to advance to high school the pupils must pass an exam that includes Information and Communication Technology.

My business partner, Mark Robilliard, has always reminded me not to get too caught up in our shiny teaching props, designed as they are by a top U.S. design agency and manufactured on high tech equipment.

Channeling the spirit that Mr Akoto would endorse, Mark keeps me grounded when he says, “We have to be able to teach the principles of finance with a stick in a paddock.”

Do what it takes. Keep it simple. Make it all about the learner.

That’s what I take from those wonderful photos of the indomitable Mr Akoto.

Peter

Closeup of Mr. Akoto drawing a Microsoft Word window on his chalkboard

Democratizing Education

4/12/2018

Mr. Harold O. Levy is a former chancellor of the New York City public schools.

He wrote a powerful piece in the NY Times last week saying that the gap between the numbers of rich and poor college graduates is growing.

He also wrote that he is dying of A.L.S.

Photo by Faustin Tuyambaze on Unsplash

With his illness lending the article extra gravitas, Mr Levy details a difficult problem and the many factors contributing to the worsening inequality.

In a group of 38 selected U.S. colleges, including five in the Ivy League, more students came from families in the top 1 percent of the income scale than from the entire bottom 60 percent.

Mr Levy and a journalist colleague prescribe many necessary, and difficult, fixes. For example, ending admission preference for the children of alumni.

At Color Accounting we believe we are pushing in the direction of educational equality.

We are committed to democratizing accounting literacy by making the skill easy and accessible to all. We advocate for the adoption of new and innovative teaching approaches. The fewer people who need to rewrite failed exams, pay for expensive tutoring - and who aim lower in their careers than they should - the better.

We are convinced that making accounting easy to learn is a step toward making education available to all who want it and deserve it.

Here’s to you, Mr Levy. Godspeed on your journey.

Peter

Join Us in London for CIPD

4/5/2018

As part of our mission to bring accounting literacy to everyone on the planet, our team attends and exhibits at L&D conferences around the globe.

Few are larger or more influential than the CIPD Learning and Development Show, coming to London April 25-26. The theme for this year's event is: "Drive Performance Through L&D".

Founded in 1913, the Chartered Institute of Personnel and Development (CIPD) is a professional association for human resource management professionals, headquartered in Wimbledon.

This year's L&D event will feature 50 expert speakers, including Pash Reddy, Head of Learning and Development for Deloitte, and over 160 exhibitors, including us, Color Accounting International.

CIPD is always a great place to network with thousands of other HR professionals, and to discover new developments in L&D.

Please let us know if you'll be there, and let's make a time to meet at our booth, #391.

Attend the Conference On Us!
We have one free ticket to the conference (a $435 value). If you are planning on being in London and would like to attend the educational seminars, reply to this email to learn if it is still available.

Would love to see you in London on the 25th and 26th.

Peter

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