The Fitbit is among the over 300 million “wearables” that were sold in 2017 worldwide. This technology provides people with a slew of personal data such as heart rate, number of hours slept, or steps taken. Fitbit’s “Manifesto” states that they are about health, not just extending tech’s obsession with data:
“… fitness is the sum of your life… How you spend your day determines when you reach your goals. And seeing your progress helps you see what’s possible.”
Often I explain accounting services as a “Fitbit for your company.” By this, I mean that you can understand the general health of an enterprise and where it is (or should be going). It’s not a data read-out. If accountants can deliver a Fitbit experience to clients, they will improve the overall health of the company and be a business asset for the future.
Let’s try to extend this analogy a little further and look at some of the Fitbit features and their accounting counterparts:
Fitbit provides a stream of timely information.
A balance sheet tells you, your company, even your non-profit where you are right now. Traditionally, accounting has measured performance solely in financial terms, but over the past decade, accountants have used the same tools to measure customer satisfaction, employee retention, website performance, security, and national happiness. Think of the balance sheet as the GPS position. It shows you precisely where you are right now, in any dimension.
The number of steps taken.
Fitbit measures flows, such as the number of steps you’ve taken today. In much the same way, the income statement measures the flows into and out of any organization. The flows can be in dollars, customer loyalty, employee morale, or any number of other dimensions. The income statement provides dynamic information on where an organization is headed, much like a GPS does.
…the art of accounting…lies in helping people and organizations measure performance, plan for success and adapt to an ever-changing world.
Map of Route Taken
Combining the balance sheet and income statement gives us the ability to see where we’ve been, where we are, and how fast we’re moving. It gives us the information we need to set realistic goals and devote the resources needed to get there.
Progress Toward Goals
My wife loves her Fitbit. Last night, she was a little short of her daily goal (10,000 steps). That timely information changed her behavior, added one more walk to our evening, and gave her the satisfaction of another great day. In much the same way, financial budgeting helps us stay “on track” to achieve our goals and make small corrections when we stray from the path.
Fitbit has a way of telling a story about my health using whimsical charts and graphs. Just looking at the charts helps me gauge my performance and health. Accounting requires some storytelling too. Using charts and graphs makes the story come alive and helps clients make decisions about their overall financial health, customer satisfaction, market trends and much more.
Communicating with Friends on Your Progress
Okay, here’s the downside of the Fitbit. My wife is simply better than me at achieving her goals. It’s a little frustrating when I see the comparisons, and downright embarrassing knowing she sees them too. That said, it’s this easy access to benchmarking data that motivates me (and in accounting motivates a business) to change behaviors, become more customer-centric, listen to and reward their employees, and improve quality.
There is data all around us. The value of the Fitbit is how it measures, organizes, summarizes and displays the data. In much the same way, the art of accounting does not lie in debits and credits. It lies in helping people and organizations measure performance, plan for success and adapt to an ever-changing world.
About Fred Sroka
Fred Sroka, JD is the Dean of the GGU School of Accounting & Bruce F. Braden School of Taxation. Fred Sroka received his JD from UCLA, practiced as a tax lawyer for 18 years, worked as a tax accountant for 18 years, and managed a couple of years as a management consultant! He has been a member of the GGU adjunct tax faculty since 1983, and a member of the tax advisory board. Fred retired from PricewaterhouseCoopers (PwC) in 2014 and has served as the Dean of the Bruce F. Braden School of Tax since October 2014.
He holds an active CPA license in California and Colorado and is an inactive member of the California State Bar. Fred and his wife Ronda have two kids (both off in grad school), who provide constant coaching on the world from a millennial student’s perspective. Fred loves to play tennis and golf and is constantly puttering around the house with his tools.