In a rapidly evolving business landscape, there is a strong case for integration of accounting into STEM (science, technology, engineering, and mathematics) disciplines which is also gaining momentum globally. This shift is particularly pertinent for India, where a burgeoning focus on STEM-driven entrepreneurship only further increases the necessity of robust accounting knowledge. Recognising accounting as a STEM field not only enhances financial literacy among innovators but also instils a critical sense of accountability, essential for sustainable growth.
Need for steam in STEM
Traditionally, accounting has been viewed through a purely financial lens. However, the modern accounting profession increasingly intersects with technology and data analytics, not to speak of risk management, aligning closely with STEM fields. This integration facilitates advanced financial modelling, predictive analytics, and efficient resource management, all of which are vital in today’s data-driven economy. If accounting were part of the STEM portfolio, it would be clear that it is a pathway to putting high-level technical skills to practical use.
Enhancing entrepreneurial success in STEM
India’s entrepreneurial ecosystem is witnessing a surge in STEM-related start-ups, ranging from biotechnology to information technology. While these ventures are often rich in innovation, they may stumble on the financial acumen necessary for long-term success. Integrating accounting education into STEM curricula can bridge this gap, equipping entrepreneurs with the skills to manage finances effectively, assess economic viability, and make informed strategic decisions. This fusion ensures that technological innovations are supported by sound financial planning, increasing the likelihood of sustainable success.
Accounting in an environment of dynamic pricing
In an era where dynamic pricing has become the norm across industries from e-commerce and ride-hailing services to airline ticketing and renewable energy, accounting plays a crucial role in strategic decision-making for STEM entrepreneurs. The ability to analyse cost structures, determine break-even points, and assess marginal costs is essential for businesses operating in volatile pricing environments. Knowledge of accounting empowers entrepreneurs to optimise pricing strategies based on real-time financial data, ensuring profitability while remaining competitive. By integrating cost accounting principles with data analytics, start-ups can make informed decisions on pricing elasticity, discounting strategies, and revenue optimisation. This financial acumen not only helps businesses stay agile but also fosters long-term sustainability in a rapidly evolving marketplace.
Promoting accountability and governance
Incorporating accounting into STEM education fosters a culture of accountability. Entrepreneurs trained in accounting principles are better prepared to implement transparent financial practices, adhere to regulatory requirements, and build trust with investors and stakeholders. This accountability is crucial in mitigating risks and maintaining the integrity of business operations.
Entrepreneurs today operate in an environment where external financing, whether through debt or equity, is not just an option but a necessity for scaling their businesses. However, with increasing reliance on external funding comes heightened scrutiny from investors, lenders, and regulatory authorities. Equity investors demand transparency in financial reporting to assess the viability of their investments, while lenders require assurance that financial obligations can be met. As financial transactions grow in complexity, so do accounting standards and compliance requirements, making it imperative for entrepreneurs to have a strong grasp of financial discipline. Adhering to recognised accounting principles and regulatory norms is no longer a procedural formality but a fundamental expectation that determines access to capital, investor confidence, and long-term credibility.
Despite the enormous potential of many start-ups, failure to meet these expectations has led to serious consequences. In recent years, several high-profile startups in India have suffered significant setbacks due to governance failures and financial mismanagement. Byju’s, once a dominant player in the edtech sector, found itself entangled in financial controversies, including delayed reporting, misaligned growth projections, and concerns over fund utilisation, all of which contributed to a drastic erosion of investor trust.
BharatPe, a promising fintech company, saw leadership disputes expose deeper governance flaws, raising red flags about internal controls and accountability. Zilingo, a fashion e-commerce startup, collapsed under allegations of financial misrepresentation, leading to the ousting of its CEO and eventual business failure. GoMechanic, an automotive service start-up, admitted to inflating revenue figures, triggering a crisis that resulted in mass layoffs and investor exits. Similarly, Mojocare, a health and wellness start-up, came under scrutiny for financial irregularities that further underscored the need for rigorous compliance frameworks.
These references serve as a stark reminder that financial missteps, whether intentional or due to negligence, can derail even the most promising ventures. Investors, regulators, and other stakeholders now expect start-ups to maintain not only innovative business models but also sound financial discipline. The ability to navigate complex accounting standards and compliance requirements is no longer optional but a prerequisite for survival in an increasingly scrutinised start-up ecosystem. As the funding environment becomes more selective, entrepreneurs who prioritise financial transparency and governance will stand a far better chance of securing capital, sustaining investor confidence, and ultimately building businesses that last.
The growing importance of ESG considerations
Environmental, Social, and Governance (ESG) factors are becoming central to business evaluations, not to speak of taxation issues, worldwide. In India, regulatory bodies like the Securities and Exchange Board of India (SEBI) have proposed expanding the sustainable finance framework, emphasising the need for comprehensive ESG reporting. Accountants play a pivotal role in this context by identifying relevant metrics, developing measurement methodologies, and ensuring the accuracy of ESG disclosures. Their expertise ensures that companies not only comply with regulations but also contribute positively to societal goals.
As India continues to advance in STEM fields, recognising accounting as an integral component of this framework is imperative. This recognition will equip entrepreneurs and professionals with the financial expertise necessary to navigate complex business landscapes, uphold accountability, and meet evolving ESG standards. By embracing accounting within the STEM paradigm, India can foster a more holistic approach to education and business, driving innovation that is both economically viable and socially responsible.
(The writer is Partner, RVKS & Associates)
