Everyone has heard of the role of an 'accountant' - whether they know it from Ben Affleck's 2016 film or their dad's friend Bill. But how many people know what accountants actually do? We're here to explain!
What does an Accountant do?
In short, an accountant is a professional responsible for keeping and interpreting financial records. But what does that actually mean?! The duties of an accountant will vary by the size of the organization they work in and their position, but typical tasks and responsibilities include:
- Ensuring the accuracy of financial documents (such as tax returns) and making sure that the documents are filed on time and in line with relevant laws
- Communicating and working with internal and external auditors
- Preparing and maintaining financial reports
- Evaluating financial operations to recommend best practices, identify issues and strategize solutions to help organizations run efficiently
- Offering guidance on cost reduction, revenue enhancement, and profit maximization.
- Conducting forecasting and risk analysis assessments
- Explaining and interpreting invoicing and accounting policies to staff within an organisation and external clients
- Preparing and reviewing budgets, revenue, expenses, payroll, invoices, and other accounting documents
- Preparing profit and loss statements and monthly accounting report
- Supervising, compiling and analysing financial data and reports for the company's financial systems
- Establishing, maintaining, and coordinating accounting procedures
What qualifications are needed to become an Accountant?
The first thing to note is that although many accountants hold a university degree, it's not essential and even if a degree is needed for a particular role/company, the degree can usually be in a non-related subject. Second, the professional exams you take will depend on how and where you would like to specialise. There are four main professional exam providers: ACA, ACCA, CIPFA and CIMA... but what do the letters stand for and how do you choose which is right for you? Let's break it down!
What are the ACA, ACCA, CIPFA and CIMA?
If you want to work in an accountancy firm that provides services to a broad range of clients, look at the ACA qualification from the Institute of Chartered Accountants in England and Wales (ICAEW). Having completed the ACA, you could work for an accounting firm advising clients and helping them to best manage their money; you could specialise in corporate finance, auditing or tax.
If you would prefer to work in the charity or NGO sector, rather than in a big business, you might want to become a public finance accountant; this involves completing the Chartered Institute of Public Finance and Accountancy’s (CIPFA) professional exams.
If you want to be based within an industry or a particular job sector like logistics, taking the Chartered Institute of Management Accountants (CIMA) qualifications might be right for you. Management accountants are usually employed within a business and it's their job to look after the finances of that company.
The Association of Chartered Certified Accountants (ACCA) qualifications are broader and offer the option to specialise later on. As a result, chartered certified accountants can access a range of accountancy opportunities in any sector, including public practice, industry-based or public sectors.
What are accountancy guidelines?
It might not seem like it at first, but accountancy is a high-stakes profession as all accountants have a legal obligation to act honestly and avoid negligence; if they don’t, they could find themselves on the wrong side of the law. Accountants can execute million-pound transactions and, at the same time, safeguard the retirement funds of ordinary people. They have access to a lot of personal information and the capacity to give valuable or damaging financial advice.
Ethics in accounting
Each professional accounting body will have its own ethical guidelines and codes of conduct, and failure to comply can result in individuals being stripped of their membership. The codes help to enhance their profession, maintain public trust and demonstrate fairness. Here are just some of the behaviours accountants have to comply with: independence, objectivity, integrity, confidentiality, competence and professional behaviour.
Personal qualities of an Accountant:
- Attention to detail is key when it comes to keeping information accurate and organised. Companies are required to keep and analyse a lot of financial data and due to the sheer volume, it's easy to make mistakes; however, simple errors can lead to much larger problems if they are not caught.
- Business acumen - a successful accountant will have commercial awareness and understand how businesses operate. This foundational knowledge helps accountants contextualise the financial information that they work with on a daily basis.
- Analytical skills - collecting and analysing financial data is a large part of the job. Having great analytical skills is key to identifying patterns and potential issues. In fact, data analytics is a growing field within the accounting/financial industry.
- Communication skills - accountants need to accurately gather facts and figures from clients, heads of divisions and other stakeholders. They must also be able to break down complex accounting theory to people with a non-financial background, so it's easy to understand and make decisions.
- Mathematical skills - a common misconception is that you have to be a whiz at maths to be an accountant. Math skills are important in analysing, comparing, and interpreting data and figures. But to be an accountant, they are not essential. Instead, think about how comfortable you are with numbers - if they don’t phase you, you'll do fine!
- Computer literacy - as with most jobs these days, knowing how to work a computer is pretty essential. For accountancy, being comfortable with accounting software and other computer-based tools will stand you in good stead.
Should I become an Accountant?
Now you know about some of the hard work and commitment that goes into becoming an accountant - is it right for you? Here we've listed some of the pros of accounting to help you decide!
A clear career path - unlike other degrees like history or philosophy, accounting has a pretty straightforward career path, so it's a great career choice for those who like to plan for their future and know their next steps. Even though there are different types of accountants, the duties you'll have and the skills you'll need will largely be the same.
Most firms follow the same structure - meaning that each role/level of responsibility is clearly mapped out. So if you're looking to move firms, you'll know what is within reach.
It's a stable and growing field - whether robots take over the world or not, people and businesses will always need help when it comes to handling their financial affairs. Simply put, as long as people need help with taxes, there will be a need for accountants. While there is great accounting software out there, it won't do an accountant's job for them!
Earning potential - most financial organisations will sponsor people through their accountancy exams and pay an excellent starting salary too (usually around £24,000 - £28,000). Once you pass your exams and become qualified, most accountants will have a big jump in their salary (this could mean a pay rise of anything from £10,000 - £20,000). With more experience comes more money.
Professional growth - we touched on this earlier, but there is loads of room for professional development within accountancy. Once you've established yourself with professional qualifications and are in the process of gaining experience, then the sky is the limit. Most accountants start as associates, but they can work their way right up to the top, reaching partner and director level. Not only is there a lot of room for growth, but you can jump from industry to industry to find something that suits you; from fashion houses to travel companies, all organisations need accountants!
What is a Chartered Accountant?
If you’re interested in a career in finance you might have heard the term ‘chartered accountant’, but do you know the difference between an accountant and a chartered accountant? We’re here to help explain.
A chartered accountant is a professional with ‘chartered status’, which is an award from a professional organisation. Chartered accountants have completed professional qualifications (the ACA - we spoke about it earlier!), have gained professional experience and are members of respected professional bodies. A whole lot of professionalism there!
What's the difference between a Chartered Accountant and an Accountant?
Many chartered accountants can advise on things that regular accountants can't. They usually have specialised experience in particular fields, such as mergers and acquisitions; this is the process of buying, merging and selling companies.
The main difference between an accountant and a chartered accountant is that a chartered accountant is more highly qualified and experienced. So what would you do if you needed an accountant? Well, if you're seeking straightforward accounting services, you don't need a chartered accountant as the extra cost wouldn't be worth it. If you need specialist advice on a complex issue, however, then a chartered accountant is the best bet!
How to get into accounting?
Why not take a look at our Finance and Accounting virtual work experience programme to learn even more - we cover everything from investing to insurance.