Accounting is the language of business. Accountants are the experts. Organizations across the world need accountants. It is one of the most recession proof jobs. This article will answer any questions you have around the roles and responsibilities of an accountant, what an accountant does and how one can become an account.
The Accountant's Roles & Responsibilities
A company gauges its financial health at regular intervals and drafts strategies to overcome any shortcomings. An accountant accomplishes the task to bring forward the discrepancies of the financial details and suggest methods to improve them. So, what does an accountant do, after all?
- With their expert knowledge of accounting principles, accountants are responsible for assessing and presenting a detailed description of the financial status.
- They ensure the intactness of financial statements, financial reports and tax reports in compliance with the laws and regulations.
- They advise and assist reviewers with ways to reduce costs, enhance profits and revenue.
- They are in charge of maintaining a database and records of all the monetary information.
- They also suggest the utilization of proficient and secure accounting software that will uphold and supervise the monetary information. These advanced accounting tools assist with the production of reports.
- They are also involved with tax filing, sorting tax returns, and ensuring prompt payment.
With this in mind, it is important to note that the difference between accountants and CPAs (Certified Public Accountant); the two roles shouldn’t be confused with one another. The next section talks about the differences between the two.
CPA vs Accountant
A professional who meets the qualification criteria set by the state and possesses a leveled-up skillset (compared to an accountant) is a CPA (Certified Public Accountant); sometimes, also referred to as a public accountant. Let’s see some key differences between the two roles.
CPAs have additional responsibilities and the process of becoming a CPA is more stringent than that of an accountant. They are more adept at handling financial details owing to their qualification and rigorous training. Besides, they have a legal responsibility to act in the best interests of their client. They must keep themselves updated throughout their career to keep up with the accounting reforms.
The accountants, on the other hand, are involved with preparing financial statements. They don’t have to take a licensing exam and are not licensed to perform mandatory audits for the companies.
Simply put, all CPAs can undertake the works of accountants but not vice versa.
Qualifications to Become an Accountant
While most of the applicants hold a Bachelor’s degree in accounting, finance, or economics, other skills may be considered to pursue an accountant's job.
- Sometimes, employers prefer an advanced degree like a Master’s in Accounting or Business Administration with Accounting as the subject.
- In some instances, candidates with a high-school diploma or even an associate’s degree may step into the field of accounting. They can begin with the post of a bookkeeper or accounting clerk.
Aside from these, the candidate’s soft skills can be an added advantage.
- Meticulousness: Accounting experts should give solid consideration to each detail to keep the data accurate and coordinated. Accountants handle so much financial information daily and a simple mistake may lead to unimaginable collateral damage.
- Business intuition: An accountant should be able to comprehend the essential elements of a business to precisely break down and decipher monetary information. A great business sense enables the accountant to gives a precise insight into the data that they work with consistently.
- Good with Computers: With the advent of computers and various accounting software and tools, an accountant is required to have a strong knowledge of utilizing these tools. This adds to the efficiency and leads to enhanced productivity, apart from helping in reducing the chances of errors.
- Insightful abilities: Gathering all the financial information and reading between the lines is an enormous part of accounting. An accountant needs to consistently investigate the information he has received and use it to predict any issues that may arise in the future.
- Communication skills: Accountants should be able to listen and collect all the information accurately from their clients or partners. This forms an important part of the accountant's job. Likewise, they should be able to unmistakably explain the consequences of their work and present their discoveries in a composed way.
- Good with Numbers: While it may not come under an essential skill for an accountant's role, it would be an added advantage if the accountant is good with numbers.
Accountants who wish to become CPAs can take the UCPA exam.
Uniform CPA Examination
The American Institute of CPAs administers the exam which comprises of 4 sections, namely the Regulation, Financial Accounting and Reporting, Auditing and Attestation, and Business Environment and Concepts.
It has 14 hours of total testing time and is considered a tough exam to clear, according to AICPA.
The exam enables accountants to upgrade their skills to become certified accountants (CPAs). They usually perform tasks such as bookkeeping and maintain general business accounts; but, with this certification, they can now prepare, audit, and review financial documents.
It must be noted that most private and small businesses may not require a CPA. However, public companies certainly need to generate audited statements that are produced by a certified professional.
How Much Does an Accountant Make?
With a job requiring many number-crunching and data-scrutinizing mechanisms, one may wonder what an accountant's salary is like. Let us look at how both, CPAs and accountants perform on this front.
CPAs are accountants with special qualifications and certifications, and therefore, make 5% to 15% more than accountants. A licensed CPA can trigger a higher salary range by a huge margin. Title, experience, and percentile determine the range of the salary.
For example, a senior accounting manager within the 25th percentile may earn $110,250 whereas above 95% percentile, this goes up to $210,000.
Likewise, a manager in tax services within 50th percentile makes $102,000, whereas the same position for a 95% will earn approximately $162,250.
Factors Affecting Salary
Accounting professionals with a certification or a Master’s degree tend to make a higher salary than accountants. The CPAs lead the salary channel. However, certain factors that affect the salary range are:
- Experience: Years of experience translate into more expertise and consequently, a higher salary. An experienced candidate with the right skills has enhanced chances of getting paid extremely well.
- Company Size: The Occupational Outlook Handbook anticipates a 10% rise in employment for accountants between 2019-2026. The prospects in this area are far better than any other sector. Moreover, the larger the firm the greater is the scope of salary.
- Industry-type: An accountant working for a software or a pharma company is set to see a growth in his salary chart; whereas someone working for a non-profit may not earn as much. So, the industry or the employer-type affects the salary to a great extent.
- Location: Supply and demand vary from one city to the other. Larger and populated cities tend to offer a higher salary owing to the augmented workload and prospects of the company.
Pros and Cons of Accounting
Just like any other profession, accounting as a career has its set of pros and cons. Before considering it as a career, it is essential to know what it holds. Let’s learn more about them in this section.
Pros of being an Accountant:
- Clearer vision about career: Often, studying a particular subject may lead to myriad careers which tends to make it harder to choose the right profession. However, if you study accounts, it makes for a clear career path leading to accounting. Although there are different types of accountants, the responsibilities will likely be the same.
- Favorable Earning Potential: The field of accounting depicts an upward curve when it comes to salary. With a median salary in 2017 of $69,350, the profession has been showcasing impressive growth.
- Evergreen profession: As long as business and commercial activities exist, accounting as a profession isn’t going anywhere anytime soon. Companies will need assistance with taxes and other related matters, which require accountants. So, accounting can be safely termed as a stable field to be in.
- Entrepreneurial opportunities: Not all professions offer an option to start a business in the same field. With the right entrepreneurial spirit, one can certainly launch one’s own business or an accounting firm. It’s a dream to become your own boss and accounting provides those opportunities.
- Continuous learning: Accountants have to be on their toes and constantly update themselves with the latest trends in the market. The newest reforms and changes in the legal regulations are aspects which they need to keep up with. This is to say that they are on a learning spree all through their professional life.
Cons of being an Accountant:
- Work may seem mundane: Accounting can be taxing at times and in some years, may appear dull. The long hours of calculations and working with numbers, deriving strategies to overcome hurdles can become boring.
- Stressful at times: The accountants are responsible for a company’s finances and so, it comes as no surprise that there will be pressure. A competent accountant should know to handle the stress around and not let it hamper the overall mental health.
- Brace-up for the busy season: With the closing of financial years, the accountants are the busiest people around. So, the aspiring accountants must know that there will be a time in the year, their work will shoot up.
Future Job Outlook for Accountants
The accountants can expect the work opportunities to rise by 4% from 2019 to 2029, depicting a steady growth. Moreover, expanding economy and globalization seem to promise greener pastures for the talented minds in the accounting domain.
Public accounting (CPA) is one of the few roles with massive demand in recent years. The Accounting and Finance Salary guide (2018) hints at growth in the hirings of skilled candidates. The fresh graduates have also witnessed higher pay offers apart from the perks and bonuses. The firms have also reformed their policies to prioritize work-life balance and flexible working hours to attract the top talent in accounting.
Over To You
To summarize, virtually, every business needs an accountant and it only seems to be growing with time. The credentials, however, require a significant amount of time and effort to acquire.
So, weigh the options carefully. If the pros outnumber the cons, then gather up all the commitment and get set to dive in.
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