David Rapp on Harnessing Accounting to Your Purpose
When we asked international technology entrepreneur Paul Tenney about the pre-requisites to entrepreneurial business success, he said, “Learn accounting”.
Accounting — or economic calculation — is one of the four pillars of entrepreneurship. And when it’s viewed through Austrian eyes, it becomes a more powerful business tool than, perhaps, you might have realized.
Whether we are talking about retrospective accounting (P&L accounting and financial reporting) or commercial pre-calculation to plan future actions (management accounting or cost accounting), how you use the tool makes a difference to the results you get.
Our guest in E4E episode 51, Dr. David Rapp, is an international leader in the field of Accounting and Management Control, a subject he teaches at one of Europe’s top business schools.
Key Takeaways and Actionable Insights
Accounting is a means to help you achieve your desired ends — apply judgment when using the tool.
Austrian economics teaches us to subjectively choose goals and then select the best means to achieve those goals. Accounting is just another tool to help the entrepreneur. There are plenty of explicit and implicit options in how to use it. David calls this attitude “purpose orientation” — one of the m
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