Each semester, Dr. Hank Alewine tasks his graduate students with a real-world project that teaches them the value of accounting.
There's the novel idea that starts a business and then there's the running of the business, with one of these decidedly more sensational than the other. If you can't already guess which garners the most excitement, here's a hint: it's not bookkeeping.
"No one starts a business and says, I want to keep a great set of books! They usually have a great product or service they want to sell or they're good at networking," says Dr. Hank Alewine, Assistant Professor in the College of Business Administration at The University of Alabama in Huntsville (UAH). "But it's difficult to run a business successfully if you don't know what's going on in the books."
That's a lesson he's not only teaching his graduate students, but also local business owners as well, thanks to his group consulting project. Each semester, teams of about five students from Dr. Alewine's Cost Management (ACC 614) or Managerial Accounting (ACC 602) classes are tasked with analyzing a real-world organization's cost management needs and identifying possible solutions or improvements, which they then present to the class and collate into a report.
When Dr. Alewine first introduced the project, he says his biggest fear was that the students wouldn't be able to find enough local businesses that needed help. But he needn't have worried. "There is no shortage of issues – and a wide variety," he says with a laugh. "I tell the students no two will be the same. Every one will have an issue but it will be unique to the business."
Some students approach businesses they already work for, while others enlist family members or family friends who own their own businesses. "Every now and then a group will get started, and once they start asking accounting questions, the owner will decide they don't want to participate because of the information's sensitivity," says Dr. Alewine. "So the group will have to go with their second-choice entity."
Once they establish a relationship, however, the goals are the same: to define the organization's cost management issue (or issues), identify a solution to the cost management issue, perform a cost-benefit analysis for implementing the solution, and determine the potential consequences of failing to address the cost management issue.
I am hard pressed to find a different type of assignment that can yield the same educational outcomes as this one does.
"We might have a company that wants to know how to better cost a product or service," he says by way of example. "Or maybe they're already costing a product a certain way and the consulting group can come in and say, we think we have a better system to cost your products to yield better and more accurate costing information."
One semester, a consulting group partnered up with an organization that had a cash-flow issue resulting from poor bookkeeping. "The consulting group figured out how the company could be more cognizant of how much they had in their accounts," says Dr. Alewine, "and ended up giving them a solution that was going to save them over $10,000 a year in finance charges."
Impressive? Certainly. But also not out of the ordinary, lending credence to the underlying thrust of the project – that good accounting practices are critical to a company's success. "It's amazing how much potential these smaller businesses have if they had a better grounding of their accounting knowledge," he says. "If they just had a little help, they could do so much better than even what they're currently doing."
It's these "light-bulb moments," he continues, that end up making the project so beneficial to all parties involved. "It's such a tangible example of what a basic knowledge in managerial accounting can do for a variety of entities, and it gives everyone involved an appreciation of the accounting function in a business," he says. "It's a win-win that really does provide a value for the community."
The companies get "a free way to get their bearings straight and be better business people," while the students get a crash-course in hands-on accounting. Not to mention a host of valuable soft skills, like working together in a group, interacting with clients, and showing discretion with confidential information. "It also gives them a great experience to talk about during job interviews," he points out, "since the project is basically an internship on a smaller scale."
As for whether or not the companies decide to follow up on the groups' suggestions, Dr. Alewine says that's ultimately beside the point. "They get real value out of the project, but if they want to successfully build on some of the solutions, they'll likely need to hire a professional accountant," he says. "This project often provides a great starting point for entities to manage costs more effectively, but from my perspective, the number one goal is that my students learn something."
And while it might not be the most thrilling something they can learn about running a business, by Dr. Alewine's measure, it is an essential something – which is what makes the group consulting project so important. "I am hard pressed to find a different type of assignment that can yield the same educational outcomes as this one does."