Accountant

What Is An Accountant?

An accountant is a person who has the job of managing the accounts of the firm or performing the task of accounting. In other words, they are referred to as a person who practices accounting or accountancy.

A professional who carries out accounting tasks like account analysis, auditing, or financial statement analysis is referred to as an accountant. Accountants work for accounting firms or the internal accounting divisions of big businesses.

They are free to establish their own unique practices. These professions are certified by national professional groups after completing the educational and testing standards set forth by their respective states.

It is considered a great profession in the business sector. Some professionals have passed competency certification exams to be called Chartered Accountants, Chartered Certified Accountants, or Certified Public Accountants.

What does an Accountant do?

For this, in simpler words, we can say that they perform functions of collecting, tracking, and correcting the finances of the company, which is necessary for decision-making.

Their role also includes financial audits, reconciling bank statements, and ensuring the accuracy of financial records throughout the year. This is related to all technical work with a significant level of integrity and confidentiality.

The 4 types of what we can call branches of accounting are: 

• Corporate 
• Government 
• Public 
• Forensic

Internal and External Auditors are closely linked with the accountants.

If this interests you, then you may need to know about some of the skills that they possess or the employer would want in its employee: 

• Well-known for its accounting standards, regulations, and policies
• Attention to details 
• Communication (verbal and written)
• Computer literacy 
• Data and Business Analytics skills
• Must understand the basic functions of business and how it operates.
• Knowledge of accounting practices and procedures
• Ability to prepare financial statements
• Ability to analyze the data using analysis tools like ratio analysis 
• Proficiency in accounting software
• Critical thinking and problem-solving skills

Some services which they may provide include: 

• Management Consultancy services
• Preparation and analysis of the finances of the company
• Taxation
• Bookkeeping
• Statutory audit, internal audit, and many more. 

If you want to start your career in accounting, then you start at an entry-level position, which is a Junior position that reports to top-level management.

A few accounting qualifications include ACCA (Association of Certified Chartered Accountants), AAT(Association of Accounting Technicians), and CIMA (Chartered Institute of Management Accountants).

Some of the tools or software used by these professionals for the smooth flow of their work are Xero, FreshBooks, QuickBooks, Sage, and many more. Basic Knowledge of any one of these is required to be successful in this industry and acts as a plus point. 

Role of Accountants 

Now, let’s discuss the role of accountants in detail with their importance in the economy. Hence, we may know that every business has an accounting department to work for them, but in reality, we are not sure of his/her importance and actual role in the economy.

They are needed in all types of business organizations, whether it is a partnership, sole proprietorship, or company (Limited or unlimited). They are also part of all industries, not only the business industry, as they may work for a pharmaceutical company.

Some of the prominent roles they perform are preparing and ensuring the accuracy of the financial statements prepared for the company, which influences critical decisions of the company in the future.

To specify, some of the functions that must be performed in this profession include:

• Financial management 
• Cost management 
• Risk management 
• Financial analysis 
• Taxation and compliance 
• Making business decisions
• Maintaining the transparency, integrity, confidentiality, and regulations of the company
• Providing advice on cost reduction, revenue growth, and profit maximization

They are also required by law to act honestly and to avoid negligence in their practices. As such, they are also accountable for ensuring that their client's financial records are in accordance with applicable laws and regulations.

Bookkeepers generally have at least an associate degree and focus on recording financial transactions. On the other hand, accountants will have at least a bachelor's degree in accounting and will be tasked with interpreting financial data rather than simply gathering it.

Accountants And The Economy

Accountants are essential for the economy or the company to keep up-to-date records of the finances of the firm systematically. They enable users to assess and utilize the updated information and make critical decisions based on that.

These professionals help the business to:

• Assess financial stability
• Point out any signals of financial distress
• Weak points
• Areas of improvement
• Key areas in the finances of the firm
• Areas where the organization is doing well

In simpler words, it helps to make the finances of the business smooth, healthy, and stable.

A survey from Robert Half Finance & Accounting reveals that 41% of accountants said problem-solving gives them the most job satisfaction than the 22% who said it's because of numbers. Whereas 17% said that making strategic recommendations to businesses is the task they like the most.

Types of Accountants 

As discussed above, there are mainly 4 categories. And each of these areas' accountants have variations in the accounting operations. The basics may remain the same, like recording entries and maintaining books of accounts.

The advanced operations may differ depending and the hierarchy of the accountant in the types of organization mentioned here.

• Corporate
• Public
• Government, and
• Forensic.

Let us discuss them briefly below.

Corporate Accountants

They are in charge of producing financial reports that executives use to make strategic business decisions.

In order to provide an accurate and up-to-date representation of the company's financial standing, they will need to collect data from multiple departments, divisions, and even locations.

Public Accountants

This is a business or individual that provides services to a large number of clients, who can be individuals or corporations. They provide financial advice, tax services, and advice on strategic financial planning.

Government Accountants

Government accountants work at all levels of government, including federal, state, and local.

They manage public funds, investigate white-collar crime, audit financial statements for government agencies, and conduct research on emerging accounting issues at the federal level.

Forensic Accountants

Forensic accountants use accounting, auditing, and investigative skills to determine whether a person or company has engaged in financial misconduct, such as embezzlement or fraud.

They need to adhere to and follow The Generally Accepted Accounting Principles (GAAP or US GAAP), which are a set of financial reporting accounting rules and standards. 

Some major accounting firms are KPMG, PWC, Deloitte, Haines Watts, and many more.

They also need to adhere to the International Financial Reporting Standards (IFRS), which are a set of accounting standards that govern how specific types of transactions and events are reported in financial statements.

Although many of these financial professionals work from 9 a.m. to 5 p.m., they may work longer hours during peak periods. There are four distinct accounting fields, each with its own set of career opportunities.

To work in this profession, you must have a bachelor's degree and additional certifications.

According to Bureau of Labor Statistics (BLS) data, approximately 24% of accountants worked for accounting, tax preparation, bookkeeping, and payroll service firms, while 4% were self-employed. The remaining professionals worked in the private sector and for the government.

Advantages And Disadvantages Of Being An Accountant

Accountants are professionals who are responsible for analyzing, recording, reporting, summarizing, and presenting the accounting information of the organization.

While there are responsibilities that come with pros, there are challenges and difficulties that an accountant may face.

A few advantages of choosing this as a career are:

• This is a clear career path 
• Its stable and growing field of work
• High earnings yield
• Opportunities all over the world (No geographical boundaries)
• There is entrepreneurial potential

A few disadvantages of choosing this as a career are:

• The work can seem monotonous and boring for some people
• Stressful work during deadlines for tax returns and financial year-ending
• If you do not like working with numbers, this isn’t for you. 

These few points may help in guiding you in choosing whether to choose this as your career path or not. 

Accountant's Job outlook and challenges

Accountants' and auditors' employment is expected to grow at a rate similar to the national average from 2021 to 2031.

Over the next decade, an average of 136,400 accountant and auditor job openings are expected. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or leave the labor force, such as to retire.

Globalization, a growing economy, and a complex tax and regulatory environment are expected to drive the strong demand for this profession and auditors in the coming years.

The continued globalization of business may increase the demand for accounting expertise and services related to international trade and international mergers and acquisitions.

Although the majority of the industry works in offices, some work from home. Although most work in groups, some work alone. They may visit the places of business of their clients.

Today, there are a lot of challenges that financial professionals face. Some of the challenges explained by Tatiana Walk-Morris are Inflation, the labor shortage, and the challenges of hybrid work.

The volatility of inflation makes it difficult for finance and accounting professionals to forecast the future. Accurately forecasting cash flow, which is never an easy task, becomes even more complicated when prices fluctuate so dramatically and quickly.

A tight labor market adds to the current economic chaos.

" With the Great Resignation, a lot of departments are short-handed, and it's tough and expensive to hire people," says James Hannan, managing director of Crowe's accounting advisory.

"Having the people in place to do what needs to be done has been difficult, especially at companies that have experienced tremendous growth."

That is why concentrating on retention is so important. Raising salaries is a clear strategy for reducing turnover.

Automation is also beneficial to the company. When employees focus on higher-value tasks, overall efficiency rises, improving organizational resiliency.

But with time, the employees started enjoying the work-from-home thing and started questioning going back to working in the office.

So, the companies thought that they did not need the whole space as there were no employees working in the office, so they decided to downsize office space which took time. Businesses can also think of evolving the offices rather than shutting them.

Ultimately, there is no one-size-fits-all approach, as businesses are focused on being flexible and adapting to the changing business environment.

Some similar occupations which are in the financial sector are: 

• Budget Analysts
• Financial Analysts
• Management Analysts 
• Personal Finance Advisors
• Bookkeeping, accounting, and auditing clerks
• Financial Managers
• Tax Examiners and Collectors
• Revenue Agents 

To conclude, we can say that it is a profession that has lots of responsibility and accountability and works with a lot of standards, regulations, and laws. This job has challenges, but it also has the ability to overcome those with some approaches.

It is a vast profession having different job opportunities and positions reflecting their different zones of working.

Apart from being able to work in the above-mentioned domains in finance and the skills they possess, communication is considered to be a massive skill required for this profession

This is because accountancy work means more than sitting on computers with Accounting software and Excel spreadsheets or with loads of files on the tables and just reviewing them or writing down all the financial transactions.

Accounting work includes communicating with the teams and different divisions and interacting with the clients, managers, and colleagues regarding accounting or tax issues in a way they can understand.

Thus, making them irreplaceable and unmatched in the field of finance and economies.

Researched and Authored by Vanshika Nakul | LinkedIn

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Accounting
• Accounting Equation

• Financial Accounting Standards Board (FASB)

• GAAP

• Qualitative Characteristics of Accounting Information