With 2019 just around the corner, chances are you’ve started reflecting on the past year and making resolutions for the future.
To help inspire you as you prepare your New Year’s resolutions, we’ve rounded up three motivating stories of individuals who have had a dramatic impact on the accounting industry.
Luca Pacioli: The Father of Accounting
Luca Pacioli was an Italian Renaissance mathematician who taught at various universities throughout Italy in the late 1400s and early 1500s. He wrote and published several textbooks on topics including arithmetic, geometry, mathematics, and magic.
When Pacioli discovered the practice of what is now referred to as double-entry bookkeeping, he was intrigued. Though this method had been used by some Venetian merchants for nearly 200 years, the practice had never been documented.
In 1494, Pacioli published Summa de arithmetica, geometria, proportioni et proportionalita, a book on mathematics that included an instructional section on double-entry bookkeeping. Thanks to the newly invented printing press, his book was mass produced and became a huge hit. Today, this method is used by businesses across the world and is integral to understanding their overall financial performance.
Pacioli is often referred to as the Father of Accounting for his contributions to the field, and in 1994, a commemorative Italian stamp was issued bearing his likeness.
Josiah Wedgwood: The Father of Cost Accounting
Josiah Wedgwood was a potter and entrepreneur in England during the Industrial Revolution. In the early days of his pottery business, Wedgwood made little use of accounting. He had invented an improved green glaze, which is still popular today; perfected a cream-colored earthenware, which was beloved by Queen Charlotte; and his pottery was in high demand. He charged high prices and profits were great.
In 1772, there was an economic downturn, and demand for Wedgwood’s pottery diminished. With poor cash flow and an accumulation of stock, Wedgwood’s business was in peril. So, he turned to his books for a solution: should he cut production, or reduce prices?
To determine the best answer, Wedgwood devised a system to track his bottom-line costs and profits, now known as cost accounting. In doing so, he discovered the distinction between fixed and variable costs, which in turn allowed him to make better management decisions. Wedgwood began varying prices on his pottery, reduced his stock during recessions, and paid closer attention to sales and marketing costs. He even uncovered an embezzlement scam run by his head clerk!
Because of Wedgwood’s newfound cost accounting method, his business survived the financial crisis of 1772. In fact, the company he founded is still in business today!
Mary Harris Smith: The First Female Chartered Accountant
Mary Harris Smith was born in England in 1847. As she grew up, her proclivity for numbers became apparent. Her father, a banker, encouraged her abilities, and at age 16 she began studying mathematics at Kings College, London.
Post-college, Harris Smith worked as an accountant in London for a number of years before establishing her own accountancy practice in 1888. That same year, she applied to join the Society of Incorporated Accountants and Auditors as well as the ICAEW, a leading professional association of accountants in England. She was denied membership to both because she was a woman. Repeated attempts to join were also unsuccessful.
Thirty years later, in 1918, the Society of Incorporated Accountants and Auditors began admitting women. Harris Smith reapplied and was made an Honorary Fellow, with an official admission date of Nov. 12, 1919.
Not long after, the Sex Disqualification (Removal) Act was passed, making it illegal for associations like the ICAEW to bar women from membership. Harris Smith reapplied to the ICAEW that same year and became the first female chartered accountant in the world at the age of 72.
Through her persistence, Harris Smith paved the way for other women to follow in her footsteps.
You: To Be Determined
Not everyone can change the course of an entire industry—it’s just not realistic. But everyone—including you—can make a difference in their workplace, life, or community.
Need some ideas? How about starting a mentoring program at your firm to ensure people feel valued and fulfilled? Or, attend a conference to hone your professional skills. You can also check out this blog post for volunteer opportunities that make use of your expertise. The sky is the limit—all it takes is setting a clear goal, making an action plan, and sticking with it to the end.
What are your goals for 2019? Let us know in the comments!