What Is The Main Role Of Accountant
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- 01-09-2021
What does an accountant do?
While the important role of an accountant will differ from business to business, and the type of accounting they are set to perform, such as management accountants or VAT accountants, there are a handful of tasks that accountants provide universally when working in these jobs and roles, including:
Creating and overseeing vital financial information reports.
Ensuring that these reports are thoroughly accurate and that the financial documents comply with the appropriate laws and regulations.
Creating tax returns and ensuring that the taxes owed by the company and its employees are paid on time and in full.
Offering financial advice and guidance on how the business can maximise its profits, cut costs and enhance its revenues.
Analysing the business's financial systems to advise on best practices.
Identifying financial issues and devising strategies to deal with them.
Helping the business and its organisations to operate efficiently.
Assessing the business's risk analyses and conducting financial forecasting reports.
All chartered accountants are required under a legal obligation to act entirely honestly and to steer clear of any negligence in their duties. In this vein, accountants must ensure their clients' financial information is entirely compliant with the appropriate regulations.
What Role Does an Accountant Play in Business Operations?
As an integral part of any business, an experienced accountant will oversee a company or organisation's financial operations, focusing primarily on the accurate collection, recording, analysis, and presentation of financial data.
The responsibilities of an accountant may only entail collecting and reporting financial information for smaller businesses rather than overseeing grand strategies. For middle to large companies, accountants are expected to offer advice and interpret their financial data, both internally and for outside parties.
Additionally, chartered accountants can be expected to deal with third-party organisations or operators, such as the business's customers, suppliers, vendors or outside financial institutions, such as banks.
WHEN DOES A SMALL BUSINESS NEED AN ACCOUNTANT?
Financial Data Management
An essential component of an accountant's duties is the structuring of the accounting systems within a company. Without such a system, the remainder of an accountants duties - mainly to take and analyse the related financial data of their employer's company or business - will be far more difficult.
When managing data, an accountant must ensure that the financial records of a company or business are accurate and thoroughly maintained under the law and financial regulations. Any financial data that an accountant gathers must be kept in an orderly system, given how crucial it is to the smooth running of any business. An accountant's duties within an organisation may even be more complex than this, including creating and maintaining a financial database or overseeing and controlling financial procedures.
Analysis And Advice
Regarding analytical services, businesses can call on their accountants to comb through available financial data to help with their practices' decision-making. Daily, accountants may have to make decisions that will affect the whole business, for example, which supplier they should purchase goods from, all of which are backed up by financial data.
While the accountant may not have the power to implement these business decisions fully, they are most often relied on to advise those who do. This advice could be on any of the various financial aspects of the business, from trends in expenditure to the business's financial obligations.
The duty of a business's accountant to track and monitor the company's financial data also means that they can also be called upon to resolve irregularities. At a larger level, accountants may need to create financial strategies for the business to implement to guard against certain issues or situations.
Financial Report Preparation
Chartered accountants also need to create financial statements on behalf of the business. These statements or reports will consist of monthly and annual financial data to give a full picture of the business's financial health and progress.
Compiling these reports and accurately detailing the business's monthly and annual financial standings allows accountants to use this data to forecast and manage the business's financial future. This is a key part of any company's financial future and a crucial duty of their accounting team.
The company's finance director may also use this data by inputting it into one of the many financial software systems and resources available to businesses. These include Excel, Hyperion or CODA Financial Management. These systems can greatly benefit businesses, ensuring a cost-effective and efficient financial data analysis programme. Of course, these systems ultimately rely on the data provided by qualified accountants.
Regulatory and Reporting Compliance
Chartered accountants also need to create financial statements on behalf of the business. These statements or reports will consist of monthly and annual financial data to give a full picture of the business's financial health and progress.
Compiling these reports and accurately detailing the business's monthly and annual financial standings allows accountants to use this data to forecast and manage the business's financial future. This is a key part of any company's financial future and a crucial duty of their accounting team.
The company's finance director may also use this data by inputting it into one of the many financial software systems and resources available to businesses. These include Excel, Hyperion or CODA Financial Management. These systems can greatly benefit businesses, ensuring a cost-effective and efficient financial data analysis programme. Of course, these systems ultimately rely on the data provided by qualified accountants.
External Business Affiliations
In addition to all of the internal duties an accountant can be expected to perform for a business, they must also work alongside outside, third-party professionals. These outside professionals include those working in the public sector, management, auditing and government accounting. Private accountants may also work with public accountants who act as consultants, auditors or tax experts.
Non-profit organisations, corporations and governments are also known to hire accountants to collect and analyse financial data on their behalf. Accountancy services are not exclusively useful to businesses, and their skills are in demand in many areas. Other areas where accountants' services are needed include:
Creditors
Regulatory agencies
Tax personnel
Stockholders
Executives
Governments also have a particular need for accountants. Regarding taxation, the government has many companies to audit and appraise each quarter and fiscal year to date when considering their tax obligations. Given accountants' expertise in financial data analysis and regulation compliance, they are uniquely qualified to assist governments in this way.
What are the different types of Accounting?
Given the wide range of financial necessities of governments, corporations and businesses, it is understandable that accountants will often specialise in a certain area of accountancy once they are qualified.
These areas include:
Processing internal financial information and advising how a business or enterprise can improve its performance.
Providing accountancy services to enterprises in the public sector, including tax and auditing assistance.
Collating and maintaining records of a company's financial transactions, essentially tied in with Annual Statutory Accounts and Bookkeeping services.
Performing general accounting services and ensuring that the business is compliant with tax regulations.
Analysing the financial records of a business under International Auditing Standards.
Limiting the risk a business is taking through analysis and evaluation of their internal systems.
Providing accountancy services for Service Charge capital for leaseholders of property.
Focussing on financial crimes, using financial, legal and accounting expertise to prosecute criminals.
Accounting for a business concerning Value Added Tax (VAT).
Important Skills
Many specific skills form an accountant job description. These skills are necessary for an accounting career and to provide accountancy services to companies and organisations. Some of these skills include:
Accountants must thoroughly understand how businesses function to analyse and scrutinise their financial situation accurately and appropriately. Working within this context allows accountants to carry out their work properly.
Given the vast amount of information accountants need to handle daily, they must have a keen eye for detail. The accurate collation and organisation of financial data is a crucial element of an accountant's work. It is also necessary to notice issues and have the problem-solving skills to deal with them.
Accountants need to navigate complex financial software systems, and being able to use computers efficiently is vital.
Gathering information demands effective communication with all those involved in generating the financial data. When presenting their analysis, accountants must also be able to convey complex information clearly and understandably.
Analysing a business's financial data is another integral part of being an accountant. They must be able to spot trends in the finances of a company and resolve any potential issues before they become too severe. Data analytics is a growing trend in accountancy, highlighting the necessity for accountants to have keen analytical skills.
You may be surprised to find that you do not need to be overly proficient in maths to become an accountant. Of course, you need to have a basic understanding of maths to interpret the financial data you are gathering, but you do not need to do anything overly complex.
Are you looking for accounts preparation for small and medium businesses in Redcar, Middlesbrough and North Yorkshire? Penny & Pounds can help you organise your payroll to ensure your employees are charged the correct tax.