Balance sheets, tax regulations, financial statements - these are just some of the many concepts an accountant must know like the back of their hand. Accounting is one of the oldest professions, dating back thousands of years. Yet, it continues to evolve alongside the business landscape.
In fact, recent surveys show that 90% of accountants worldwide believe there has been a cultural shift in the industry.
With all these changes taking place, now seems like the perfect time to revisit the fundamentals - what does an accountant actually do? In this blog post, we'll provide an overview of an accountant's role, responsibilities, and required skills. We'll also explain how solutions like Chaser can optimize their efficiency.
Table of Contents
1. Introduction
2. Overview of an accountant's role
3. Key responsibilities of an accountant
5. Essential skills for accountants
6. The importance of accountants in business
7. Integrating Chaser for streamlined accounting
8. How to become an accountant
9. Conclusion
Overview of an accountant's role
The best way to understand what accountants do is to examine the role they play. At first glance, "financial expert" may come to mind. However, that only scratches the surface. Sure, their job revolves around money and numbers. They manage financial information for businesses, organizations, and even individuals. But they're not just adding up figures – they're telling the story behind those numbers.
Ultimately, they are vital to both personal and business financial health. It's also worth noting that there are many specializations under the accounting umbrella. We'll visit some of the main ones shortly.
Key responsibilities of an accountant
Next, we can now zero in on the details of what accountants do on a day-to-day basis. Spoiler alert: it's not just playing with calculators.
Here are some of the main things accountants take care of:
- Keeping the books in order: Accountants record and update financial transactions. In doing so, they guarantee completeness and accuracy.
- Creating financial reports: Think financial statements and reports. Accountants compile periodic financial statements and documents summarizing an organization's financial position. Common examples include income statements, balance sheets, and cash flows.
- Managing budgets: Accountants help businesses plan how to spend their money. They develop budgets that estimate future financial performance. They also routinely forecast upcoming monetary conditions.
- Doing audits: Audits review the legitimacy and accuracy of financial documents. Accountants are used for checks to make sure everything's above board and following the rules.
- Handling taxes: Nobody likes doing taxes. Accountants are here to prepare tax returns for individuals and businesses. They are also well-versed in tax codes, which allows them to identify deductions and credits to minimize tax liabilities.
- Giving financial advice: Finally, accountants can be enlisted in an advisory capacity. They can counsel organizations on profit-maximizing investments and strategies.
Types of accountants
Remember when we mentioned the array of accounting specialities? Here are a few of the most common types of accountants:
Public accountants
These are the accountants you'll most likely see advertised on a TV commercial. They're the ones who work with individuals, small businesses, and nonprofits.
They supply services like tax preparation, financial planning, consulting, and bookkeeping. Most of the time, they work for accounting firms or run their own businesses, offering their services to anyone who needs them.
Management accountants
Some accountants work for large businesses. These are the management accountants. Unlike public accountants, who work with many different clients, management accountants are employees of a specific company. Their entire job revolves around that company's finances.
We say large businesses because the company must make enough revenue to support in-house financial staff. Management accountants often collaborate cross-functionally and equip executives with monetary insights for decision-making.
Depending on the company's size, a management accountant might focus on one area (like budgeting) or work across different regions. In bigger organizations, they might even have one accountant for each financial area.
Government accountants
As the name denotes, these accountants operate within the public sector. They manage government budgets, ensure financial compliance, perform audits, and consult on economic matters.
Internal auditors
Now, internal auditors are a bit different from regular accountants, but they're still part of the same financial sphere. While not accountants per se, auditors are still critical financial professionals.
Whereas accountants handle day-to-day tasks, auditors periodically review procedures and systems. They evaluate financial accuracy and effectiveness while assessing regulatory adherence. Most of the time, they're checking to make sure the company is following all the laws and rules, especially when it comes to taxes.
Some internal auditors go even further. They might suggest ways to improve company operations or reduce financial risks.
Forensic accountants
Think of forensic accountants as the police detectives of the monetary world. Using auditing and investigative skills, they investigate missing funds, financial discrepancies, and fraudulent activity.
For example, if a company suspects someone is stealing money, it might hire a forensic accountant to follow the money trail and uncover the truth.
Essential skills for accountants
You've probably heard that people who are good with numbers should become accountants. While that's true, there's so much more to it than math.
This section goes over some of the essential skills that make a great accountant:
- Analytical skills: Accountants must interpret copious financial data to uncover patterns, inconsistencies, and solutions.
- Attention to detail: They must exercise precision to guarantee information is complete, accurate, and compliant. Even minor errors can have significant consequences.
- Technology proficiency: Familiarity with accounting, analytics, and productivity software is a must. Mastering the latest fintech innovations is also critical.
- Communication ability: Reporting financial findings clearly and effectively is vital. Accountants must also explain complex information simply.
- Ethical judgment: Strict codes of conduct govern accounting. All analyses and recommendations must reflect integrity, honesty, and objectivity.
The importance of accountants for businesses
Having an accountant can be very helpful for individuals, especially when tax season rolls around. And for high-net-worth individuals with a lot of capital to manage, an accountant can be a lifesaver.
But when it comes to businesses, accountants are essential all year round, no matter how big or small the company is. They bring expertise that is necessary to keep the company afloat.
Financial reporting and compliance
Maintaining accurate books and following legislation is fundamental yet complex. Surveys reveal that over 50% of firms struggle with ever-changing regulations. Instead of having to keep track of all these changes (or worse, doing nothing and getting in trouble), business owners can rely on their accountants to stay on top of things.
One big part of following the rules is financial reporting, and accountants are experts at this, too. They can help file taxes, prepare financial statements, and give valuable insights into how healthy a company's finances are.
Managing finances
With the right tools and tech, accountants can help businesses create and keep track of budgets, monitor expenses, and manage cash flow. This allows companies to make smarter decisions based on their financial data.
Strategic financial advice
Every business wants to grow. But to do that, you need to make the right decisions every step of the way. That includes decisions about money – things like cash flow, investments, and plans for expanding the business.
Even with all financial data neatly organized, it can be overwhelming for business owners to make sense of it all. Accountants can provide expert advice based on their knowledge and experience.
Risk management
Accountants also assist with identifying and minimizing fiscal exposures. They pinpoint potential threats and advise companies on responding appropriately.
Integrating Chaser for streamlined accounting
Thus far, we've covered the manual processes accountants handle. We should also explore how technology can make all these accounting tasks easier. More specifically, let's look at a software solution designed just for accountants – Chaser.
As the top accounts receivable platform in the world, Chaser automates payment reminders to accelerate cash flow. Seamless integration with accounting systems also improves overall productivity.
Just ask TaxAssist Accountants. TaxAssist used Chaser's automated credit control software to cut down on the time they spent chasing client payments. They saved the equivalent of 3 weeks of staff time that would typically be spent trying to collect late payments.
TaxAssist also used Chaser's advanced software to help their clients recover more than £20,000 of unpaid debts in just 30 minutes.
How to become an accountant
If exploring the world of accounting appeals to you, a new career is well within reach. The process of becoming an accountant isn't too complicated, although it does take some time and effort.
The exact steps can vary depending on where you live, but it usually follows a similar pattern:
- Earn a bachelor's degree in accounting, finance, or a related area. You'll get a foundational knowledge of concepts and principles.
- Obtain any mandatory certifications for your region and desired specialty. Standard examples are CPA, CMA, CIA, and CFE.
- Gain practical experience through internships and entry-level roles. This allows you to apply classroom learnings in real workplace settings.
- Pursue continuing education to stay current with regulations, technologies, and best practices. The learning never stops for accountants.
Conclusion
From financial reporting to strategic advising, accountants play diverse, indispensable roles in organizational success. Understanding their responsibilities equips individuals and companies to fully leverage accounting expertise.
Integrating solutions like Chaser also unlock higher levels of productivity and profitability. With the right support, accountants can steer organizations safely into the future using financial insights.
