Who is an accountant?
Just like any other profession, different people have different opinions about accountants. Some believe that accountancy is a boring profession which involves just crunching number all day long. This was true for quite some time, but not anymore. Accounting has evolved a lot overtime and is not as simple or straightforward as crunching some numbers.
Well, an accountant is an individual/ professional who interprets and analysis financial records for an individual or any other entity. They are responsible to carry on a wide range of tasks which all revolve around ensuring the financial soundness and success of the respective client.
The prerequisite for
That is, there is more to accountancy than meets the eye. To further understand this, let’s first see what or who an accountant is. And then elaborate more on the roles and responsibilities they must carry on.
Becoming an accountant is most generally a bachelor’s degree in the science of accountancy (or any other related field). However, the exact eligibility criteria for a profile is subjective from client to client. That’s because accounting is a broad umbrella term which comprises of many different job functions and job titles across industries.
Though, one can say that there are three broad types of accountants- public accountants, government accountants, and private/ management accountants. Within this there are many sub-sections or specializations and so on.
Naturally, accountants are critical to measuring financial health, consequently helping clients into making decisions that are most advantageous to their financial health. And it requires great skill and advanced qualifications to be at the fore of such a demanding job. Let’s have a look at the roles & responsibilities an accountant fulfils.
Roles & Responsibilities of an Accountant
Accountants have to take on a variety of roles and fulfil an even wider variety of responsibilities in any profile. And even though these vary from client to client and exact profile to profile, there are a few general ones. These include, but are not limited to:
An accountant is responsible for determining the organization’s payroll requirements. They also have to work in close proximity with the book-keepers to ensure proper maintenance of the payroll data. Additionally, it is also their responsibility to ensure that the monthly payrolls are prepared and processed on time.
While it is the responsibility of a book-keeper to track and process invoices. And accountant is the one who ensures the operations are in compliance with all needed accounting policies. He is also the one who must oversee and explain the said policies to the staff, the customers and vendors.
To begin with it is the accountant who prepares the annual (and other) budgets for the organization. He has to ensure that budgets are in keeping with the company objectives and goals. Furthermore, the accountant also has to oversee that the overall budget is being met in the business operations and transactions. As is common knowledge, there is special need to take care of the budget near the end of the financial year.
They also have to review the budgets and consequent expenditures for all local, private, state as well as federal funding, as and when needed. Reviewing any contracts and grants in reference with the budgets if also the job of the accountant.
Profit and loss
It is the duty of the accountant to prepare the profit and loss statements for the business. He also prepares monthly closing and other cost accounting reports. Furthermore the accountant analysis the statements and draws relevant inferences from these.
Then they have to prepare detailed reports for the higher management/ company officials. The goal here is to give the management an idea of how the business is doing, and also to make important decisions regarding the same.
Revenue and expenditure
It is the job of the accountant to look at and analyze the revue and expenditure trends of the business. By doing this they have to ensure that the expenditures are in control and in compliance with the budgetary requirements. They also have to develop sound strategies which maximize revenue and minimize the expenditure. This requires detail deliberation and critical analysis.
The main goal of any business is to be profitable. And it is the responsibility of the accountant to analyze all business doings, transactions and dealing such that the company maximizes its profit. They have to device plans and strategies such that the end goal is achieved. This includes suggestions on cost reduction wherever possible and revenue enhancement.
Given the size of a business organization, discrepancies in the financial transactions may arise from time to time. It is the responsibility of the accountant to catch this discrepancies in time and also correct them as and when they arise. This again is a very critical to smooth financial functioning of any organization.
We have already mentioned how accountants have to prepare and take care of financial statements and budgets. In addition, they also have to oversee all other financial reports that are critical to the business. They must ensure that these reports are always complete, maintain them properly, and always keep them ready for further presentation and quick analysis.
Risk is an inevitable part of every business or even individual operations. Accountants play and important part in risk analysis for all its clients. It is their job to ensure that whatever decisions are being made, are solid and pose the minimum amount of risk for the business. This requires great skill and special knowledge of all of the business’s operations and functions. In fact, there some specializations and certifications that equip accountants in this department.
Another one of the most important functions of an organization is tax management. The role of an accountant in this regard is firstly to assess the tax liability in keeping with the state as well as federal laws and regulations. After making first analysis of the tax liability, the accountant must then determine ways to minimize the tax burden on the organization.
The accountant has to ensure that every transaction is in keeping with the law. After ensuring this they are then responsible for making sure that the taxes are paid on time, whenever they come due.
Work with auditors
In most medium to large sized organizations there will be both auditors and accountants, performing their independent roles. It is the responsibility of the accountant to interact with and work in coordination with both the internal and external auditors. The accountant must ensure that the audits of the organization’s operations go smoothly.
Analysis and forecasting
Conducting regular analysis of all business operations regarding anything to do with its finances is also an accountant’s job. They use skills acquired through education and practice to draw inferences and make forecasts regarding various financial aspects of the business. The end goal here is to ensure the overall financial health of the business.
For example, whenever the business is seeking to make investment, the accountant must analyze the proposition. And then they must help management make decisions that are in the best interest of the business operations.
The list above comprises of the most important roles and responsibilities that an accountant must fulfil. However, there may still be some responsibilities which are not covered here. This is because depending upon the requirement of an organization the role and responsibilities of an accountant may become more intense. Some specializations also call for additional complex responsibilities.
Essential Accounting Skills
Naturally to be good at their job, accountants must possess a set of necessary skills. Let’s have a look at some of those.
Attention to detail
Having a keen eye and ability to pay attention to detail are both essential for accountants to ensure that all the financial information is well organized and accurate. With the huge amounts of data that goes into keeping records and reports, making mistakes can be easy. But accountants must be able to avoid them, and quick to catch and correct them, if any.
Analytical skills and critical thinking
Over the course of our discussion about the roles and responsibilities above, we know accountants must have brilliant analytical skills and critical thinking. These are essential in enabling them in identifying existing patterns and detecting potential issues. This also includes trend analysis and strategic planning.
Management/ Business acumen
Accountants are no longer mere number crunchers. Their role as a part of decision makers in businesses is increasing. And with this, it is essential that they have proper knowledge of business operation and management.
Even though overtime, accountancy has become more than just number crunching, number are still a critical part of the job. Accountants must hence have proper (if not exceptional) knowledge of various mathematical concepts in regards to finances. This however does not necessarily include very complex math skills.
Computer and software efficiency
Industries and fields across the globe are accepting technology and making a part of their day-to-day affairs. And the same goes for accountancy. This is why to be good at their jobs, accountants must be proficient in all-important accounting software and other computing tools.