What Does An Accountant Do?Accounting - Who Can Help
An accountant is a professional responsible for maintaining the financial records of an individual or company. Accountants are responsible for a wide range of tasks which includes balancing the company’s accounts, interpreting financial records, preparing financial statements, analysing data, preparing budgets and payrolls, filing tax returns, and auditing financial records.
Accountants ensure that a company is operating in a financially efficient manner. As such, they make suggestions and develop strategies which enable the company to reduce costs and operate profitably, including what investments to pursue.
Accountants are different from bookkeepers though the terms are often used interchangeably. While bookkeepers merely gather financial information, accountants can interpret financial information. Accountants may be bookkeepers, but bookkeepers are not accountants.
Roles and Responsibilities:
Depending on the position or place of work, the job function of an accountant may vary. However, there are expected roles and responsibilities which all accountants perform.
- Ensuring the accuracy of financial documents, as well as their compliance with relevant laws and regulations.
- Preparing and maintaining critical financial records and reports.
- Preparing tax returns and ensuring that taxes are paid in a timely manner.
- Monitoring the financial transactions to ensure compliance with the law and recommendations.
- Identify issues hampering capital growth and return on investments and proffer solutions therein.
- Implement strategies to effectively reduce cost, increase revenue and maximize profit to enable organizations run efficiently
- Carry out financial valuation and risk analysis of the business or any potential investment and advise thereof.
- Prepare and maintain monthly payroll requirements; maintain payroll data; prepare and process monthly payrolls.
- Monitor and keep records of inventory.
- Detect fraud or any financial misdemeanours in the company’s accounts.
- Resolve accounting discrepancies, including implementing accounting control procedures.
- Analyze and review tax laws or any law that has financial implications for the individual or business.
- Prepares profit and loss statements and monthly closing and cost accounting reports.
Types of Accounting
There are different types of accounting, all of which focus on various aspects of the profession. Let’s have a look at them,
A. Public Accounting
This type of accounting caters to the general public. Public accountants provide accounting expertise by investigating financial statements and accounting systems. Public accounting firms may be organized around a number of sub-specialities, providing expertise in areas such as initial public offerings, tax support services, fraud investigations, health care auditing, or litigation support for insurance claims.
B. Private Accounting
When a single firm employs an accountant, then he is said to be engaged in private accounting. The responsibility of a private accountant involves setting up internal accounting systems, preparing and analysing financial statements, raising invoices, organizing payrolls, and developing a budget for the firm. A private accountant works towards the benefit of the firm he is employed to.
C. Financial accounting
This field of accounting is focused on converting financial information into external reports. Financial accountants need to have in-depth knowledge of accounting frameworks such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) or any specified regulatory standard for accounting.
D. Government accounting
This field of accounting deals with expenditures and financial transactions of government entities. Government accountants manage funds for government parastatals and ensure that they operate in a financially efficient manner. Government accounting requires such a different skill set that accountants tend to specialize within this area for their entire careers.
E. Forensic accounting
This field of accounting combines accounting and investigative techniques to uncover financial crimes. It entails reconstructing financial records to unearth any financial discrepancy or manipulations. Forensic accountants are usually consultants employed to help resolve ambiguity in financial records and accounts. They are part of an investigative process and are more likely to be part of an audit firm rather than be in the employ of an individual or company. They are brought in to check the accounting practices and reports of an in-house accountant. Forensic accountants also give testimony in the law court as part of criminal proceedings. Forensic accountants may specialize in insurance claims, personal injury claims, fraud, construction, or royalty audits.
F. Management accounting
This aspect of accounting focuses on preparing reports about the operations of a company to help management make informed decisions based on a company’s financial standing. They help the management clarify the state of a company’s finance as a guide to implementing profit-driven strategies. Management accountants help businesses achieve their goals by identifying, measuring, analyzing, interpreting and communicating information to managers.
G. Tax accounting
This aspect of accounting deals with the preparations of tax returns and tax payments for individuals, small businesses and corporations. They ensure that the taxes are filed accurately and advise their clients on the best ways to reduce their tax liability or qualify for tax credits. They also advise clients on the tax implications of prospective investments.
H. Internal auditing
This aspect of accounting is involved in the internal examination of a company’s accounting system and financial transactions to identify accounting loopholes, fraud, waste, or financial mismanagement. Internal auditors are trained in forensic accounting but are employed by the company to provide checks to their accounting system.
There are several skills that all accountants need to be successful in their roles. These are:
- Attention to detail: Accounting must be very detailed in their recordings and transactions. They should be able to notice any discrepancies. Mistakes in record-keeping or information have profound financial implications.
- Business savvy: An accountant is supposed to be business savvy. He is supposed to know how to help the organization reduce costs and increase profit. An accountant should also be able to spot business and investment opportunities that would be favourable to their clients.
- Be organized: Because they are in charge of presenting and interpreting financial data, accountants have to be organized. Keeping accurate records and setting up accounting systems entails organization.
- Understanding of tax laws: Accountants should have an understanding of tax laws and how it affects a client’s finances. This way, they would be able to advise their clients more appropriately. A good accountant is meant to reduce the tax liability of his client and structure the business in a way that he would get some tax bonus or credit.
- Basic Mathematical skills: A common misconception is that you have to be good at math to be an accountant. Math skills are indeed essential to analyze, compare, and interpret data and figures; however, complex mathematical skills are not typically necessary to become an accountant.
Becoming an Accountant
Accounting goes beyond crunching numbers. This is why accountants are seen as valuable contributors to whatever organization they belong to. If you want to become an accountant, there are numerous resources available to help you achieve this. You can choose to pursue a degree in Finance or Accounting Management. Alternatively, you can pursue certifications in various fields of accounting such as CPA, CGMA, CMA, ABA and CFE.