It’s a reasonable question.
Do accountants manage bookkeeping? Help you understand finance ratios? Prepare taxes?
While accountants are most visible around tax season, accountants work year-round and can serve as the financial backbone of your company.
Accountants help people to make goals, plan how to achieve them, then help with the execution in the most profitable way possible.
No matter why you’re here, this article will help you better understand everything you need to know about accountants. We’ll answer questions like, ‘What do accountants do?’ and ‘Are there different types of accountants?’ By the end of this article, you should better understand accountants’ daily tasks and responsibilities.
What does an accountant do?
At their core, accounts are qualified financial experts who help individuals and/or businesses with their accounts. This could include a wide variety of tasks, from analysing and reporting on financial records to preparing tax returns and all associated paperwork.
Not only can accountants help perform regular financial tasks and reporting, but they can also act as a strategic advisor for businesses, helping them to become more profitable.
What do accountants do on a day-to-day basis?
One of the interesting things about accountants is that no two days ever look the same. Accountants tend to perform a wide variety of tasks, as each client and business will be different and may require individual support. Below, you’ll find a brief synopsis of some of the tasks accountants are expected to perform on a daily basis:
- Provide financial advice, particularly regarding the financial health of a business
- Review profit and loss statements and troubleshoot cash flow problems
- Ensure taxes are lodged correctly and on time and all obligations are followed
- Deal with unpaid invoices
- Conduct business audits
- Help with long-term strategy and growth planning
Again, no two days are the same for accountants. However, there is one area in which most accountants tend to specialise and excel.
Accountants and tax
One of the core functions of an accountant is helping clients prepare and lodge their taxes. The Australian Taxation Office (ATO) has several rules and obligations that everyone is required to follow, from freelancers and sole traders to small businesses and profitable companies.
Accountants are required to stay on top of the ever-changing tax landscape so they can offer their expertise to their clients. Accountants seek to help their clients understand their potential tax deductions, calculate their capital gains, and determine any potential write-offs.
The Goods and Service Tax (GST) and Business Activity Statement (BAS), not to mention payroll and super, can be a huge headache for new business owners or expanding businesses. This is one of the areas where accountants can provide real value to their clients.
Even with qualifications, being an accountant requires continual training and upskilling as you stay on top of financial trends and tax obligations. Many accountants will also be trained to use cloud accounting software such as QuickBooks to communicate with their clients, monitor their progress, and complete their reporting. The best accountants ensure that they are up-to-date with the ever-changing technology space surrounding the accounting and financial industries.
Do you need formal training to become an accountant?
If you wish to work as an accountant, you’ll need some formal training. Similarly, if you are a business owner looking for an accountant, you’ll want to make sure that the individual can provide relevant certificates demonstrating his or her standing.
As we’ll touch on at the end of the article, there are different types of accountants. But, generally speaking, the various types are in three different professional bodies:
- The Institute of Chartered Accountants of Australia (ICAA)
- The Institute of Public Accountants (IPA)
- CPA Australia
You’ll need a Bachelor’s degree to become a member of these organisations. The ICAA and CPA Australia require member accountants to have a bachelor’s in accounting or a similar degree. That typically includes a bachelor’s in business.
The IPA is a bit more specific in its memberships. It requires members to have an FNS50215 Diploma of Accounting.
It’s possible that you can still crunch numbers in an accountant job without being a member of one of these groups. Technically, you only need to be a member of one of these groups if you plan to produce financial reports, especially if those reports will be reviewed externally. Balance sheets are just one example of the type of financial statement only certified accountants can prepare.
Training for bookkeeping
However, you don’t need to be a member of one of these groups to perform basic bookkeeping duties. Bookkeepers primarily focus on entering transactions. If you don’t yet have a bachelor’s degree, then working as a bookkeeper could be an excellent way to get your feet wet in the world of accounting.
Similarly, if you’re a small business running a tight budget, you’ll likely find bookkeepers are a bit cheaper than certified accountants. You can enroll in QuickBooks software and hire a bookkeeper to manage it for you. QuickBooks can produce financial documents for you. You could then hire a tax accountant to help file your taxes each year.
Key skills of accountants
Apart from being financially savvy and good with numbers, an accountant also needs good emotional intelligence and people skills. Here are a few of the traits every good accountant needs to exhibit:
- Foresight and vision
- Problem-solving skills
- Detail-oriented perspective
- Communication skills
- Time management skills
In an accounting career, your goal is to make life as easy as possible for your clients. Good foresight and vision will allow you to see problems early so you can handle them before they grow into large-scale issues. Similarly, problem-solving skills will allow you to think creatively and find solutions to any issues that may arise.
Furthermore, accountants need to be able to pay close attention to details. One small detail can make the difference between thousands of dollars for your client, so you’ll want to make sure that you’re always on your game.
You’ll also need to know how to communicate sensitive issues with your clients. You’ll need to understand precisely what they’re looking for and how to help them.
Lastly, if you want to be successful, working as an accountant will take time. There will be some long hours, and you’ll need to know how to balance between multiple clients. But if you can remain committed to the job, you’ll find it’s very rewarding and can offer a lot in terms of career growth.
A career as an accountant is an exciting prospect. Working with clients and helping small and big business owners keep on top of their financials and tax obligations can be life-changing work. Whether you want to work for a small or a large firm or you want to start your own firm, working as an accountant can take on many different forms.
Different types of accountants
‘Accountant’ tends to be a broad term that encompasses a large career field. However, within accounting, there are numerous different fields of study. If you’re looking to work in an accounting career, you may want to start considering what type of work you’d want to do.
And, if you’re a small business owner looking to hire an accountant, you’ll want to make sure that you find the right type of accountant.
These types of accountants work specifically with financial data. A financial accountant will prepare reports and statements for shareholders.
Cost accountants look at financial records and depreciation data to help determine the cost of goods and services. A cost accountant helps a business measure operating costs so the business can make more strategic decisions in the future.
Managerial accountants are similar to cost accountants, except they focus more on management as opposed to operations.
These accounts specialise in helping individuals and businesses file taxes under local and national laws and regulations.
Nonprofits are different from other businesses because they don’t try to maximize profits. Instead, they try to cut costs. A nonprofit accountant can help with this.
Government accountants work closely with the government. Jobs could range from investigating white-collar crime, like bank fraud, or performing audits.
Auditors are unique in that they are a bit more reactive rather than proactive. Auditors will review a company’s financial statements and books to look for inconsistencies and errors. Companies can either have an in-house team of internal auditors or elect a third-party auditing service.
How much do accountants earn?
Working as an accountant can be quite lucrative. According to Indeed, the average salary for accountants in Australia is $72,748, although they can easily push into the six-figure range if you have a wealth of experience.
Is working as an accountant right for you?
If you’re a go-getter who loves working with numbers, then you may want to consider a career as an accountant. A career as an accountant can be exciting, as your days will have variety and you’ll work with business people on a daily basis. If you plan to enter an accounting career, make sure you understand the required education and certification involved.