Why accounting matters more than you think

For Philip Keejae Hong, accounting isn’t just about balancing books—it’s about giving people the tools to make better decisions. Whether that’s a multinational corporation planning capital investments or a high school graduate launching a soda truck from a converted school bus, the numbers tell a story. You just have to know how to read it.

“Accounting gives you a roadmap,” Hong said. “You can’t make good decisions without good information—and that’s what accounting provides.”

As an accounting faculty member at Central Michigan University, Hong is deeply focused on helping students understand not just how accounting works, but why it matters. From helping small businesses access financing to forecasting your own financial future, he sees accounting as a skillset that benefits everyone.

Accrual vs. cash: Why method matters

In his recent Advances in Accounting journal article “Accrual accounting and access to external funds: Evidence from small businesses,” Hong examined how accounting methods impact small business financing. While large companies are required to use accrual accounting—a method that records revenues and expenses when they’re earned or incurred, not when cash changes hands—small businesses often rely on simpler cash-based approaches.

But his research shows that adopting accrual accounting, even for small firms, can offer measurable benefits.

“Banks want to know if you’ll be able to pay them back in the future,” he explained. “Accrual accounting gives them a clearer picture of your business’s performance and cash flow potential. That can translate to better financing terms.”

For entrepreneurs and business owners, even small interest rate improvements can mean thousands of dollars saved over time. It’s a compelling argument for investing in better accounting practices.

Connecting concepts to real life

Hong’s classroom is full of relatable stories, from his mom’s small business bookkeeping to a soda-selling startup in a Lowe’s parking lot. In each case, the lesson is the same: accounting turns guesswork into clarity.

“I used to focus just on delivering the content,” he said. “Now, I try to connect it to real life. That’s what helps students see why it matters.”

Over the years, he’s shifted his teaching approach to prioritize relevance, empathy, and application. That means simplifying complex topics, bringing in personal finance conversations, and acknowledging that not every student enters the room with the same background—or confidence.

“Accounting is hard, and I don’t pretend it’s not,” Hong said. “But I try to make it less painful. The goal is for students to walk away understanding something they can actually use.”

Building financial confidence for life

Beyond classroom instruction, Hong is a vocal advocate for improving financial literacy across all majors.

“We don’t talk about money enough,” he said. “But financial independence is part of human dignity. Whether it’s saving, investing, or just understanding your paycheck—these are life skills everyone needs.”

Hong’s research may delve into tax policy, earnings forecasts, and accounting systems—but at its core, his work comes back to one thing: empowering people through information.

“It’s not just about the data,” he said. “It’s about helping people make better decisions, whether they’re running a business or planning their future.”