All businesses worldwide use accountancy at the center of their operations. Money is the basic ingredient for all businesses, meaning accountants understand enterprises more than anyone. In the past, accountants were limited to maintaining books of accounts. However, modern-day accounting has evolved, and accountants have more roles across various departments.
To become an accountant today, you require more skills than just numerical competence. For instance, you may be required to collect debts from creditors, report on how the company is performing, and generate budgets. The professional setup has changed significantly; hence modern accountants must be dynamic and ready to take up any role.
Types of accountants
Before you understand the roles accountants play, you must first understand the different types of accountant roles. The list below highlights various categories.
Cost and management accountant (CMA)
This class of professionals deal with a company’s total cost of developing a product or selling a service. They also prepare budgets and calculate profitability to find the break-even point. These professionals guide the company in identifying processes and services that are least costly. They also use their financial knowledge to increase cash flow in the organization. Companies are looking for individuals with a doctor of business administration qualification because they have sufficient training. This professional course, such as the one offered by Aston University, ranks among the best in the business world.
Chartered accountants (CA)
Chartered accountants mainly manage business finances and advise other stakeholders regarding financial issues. CAs are responsible for making key business decisions by providing financial performance reports.
These professionals are deployed in case there are accounts of fraud or financial discrepancies. They also enforce government regulations by checking whether a company keeps proper records. In some cases, forensic accountants are used as witnesses in financial litigations.
Governments and accounting firms hire these officials to perform audits, calculate taxes, and for consultations. Banks and investors may also deploy them to audit financial statements and help maintain their financial records. Public accountants also generate compensation packages and help institutions to implement accounting systems through consultancy frameworks.
Tax accountants are mainly focused on taxation issues. They are also known as tax consultants, and their primary responsibility is to file tax returns for individuals and businesses every financial year. Before filing, they must extract relevant information concerning wages, employment, mortgages, and investment. To qualify as a tax accountant, you must have a bachelor’s degree in taxation, accounting, or a related field, as the minimum qualification. Once you graduate, you can advance your knowledge by pursuing a higher degree.
Auditors review accounts and ensure businesses have the correct accounts regarding their financial information. They also enforce compliance with financial regulations by reviewing accounting systems, fiscal records, and financial regulations. Auditors help you get ready for the future. Essentially, they are instrumental in resolving company issues and preventing them from reoccurring in future.
Roles performed by accountants in businesses today
Below are specific roles that accountants perform.
Financial data management
Most business operations rely extensively on their accounting structure. The work of an accountant is to spearhead the collection and storage of financial information as it relates to the business. The accountant must ensure the financial records comply with the policies of the corporate environment and the law. Today, business operations and management use the pristine system, meaning an accountant will help the firm stick to these provisions. Financial data management extends to more complex duties such as monitoring control procedures and maintaining financial databases too.
Analysis and advice
Accountants also act as analysts because they understand the monetary landscape better than other staff members. Various analyses will be used to guide stakeholders in making decisions. Accountants play a significant role in handling daily financial details, including developing and maintaining payrolls, paying bills, advising on revenue and expenditure trends, and forecasting revenue expectations.
Accountants act as mediators between departments that have experienced irregularities and discrepancies. Financial data analysis will identify the problem and find a solution for it. For long-term solutions, the accountant may develop various recommendations involving procedures for specific situations and problems.
Preparation of financial reports
It is the role of accountants to prepare financial statements for the company. The statements may be monthly, quarterly or annual and are based on analyzed data. Ordinarily, financial reports are connected to the business’ goals; hence they will be used to make forecasts and provide continual support. Financial reports are easy to interpret, meaning other stakeholders, such as financial officers or directors, can use them for development. Other parties may also use them in running company systems and software, including Excel and Hyperion.
Reporting and regulatory compliance
Another role of accountants is to enforce compliance rules to ensure deadlines are met. For instance, financial reports, whether quarterly, semi-annual or annual, have deadlines. They are also accompanied by tax implications. The accountant has a duty to monitor taxation issues, including filings. Other responsibilities include coordination of the audit process and preparation of financial data.
External business affiliations
Accountants are a link between the organization and external parties, especially in the financial department. The fields include government accounting, internal auditing, and management. For example, an accountant may provide information to a public accountant who serves as a tax service professional or an auditor. Non-profit organizations and governments also reach out to management accountants for financial analysis for the companies they work for. Accountants also advise stockholders, tax personnel, creditors, and company executives. In the public sector, they also work with government officials to maintain financial records.
Better funding options
Investors and financial institutions want to identify credit-worthy companies before they offer them funds. Organizations that wish to present themselves as low-risk investments must first understand their financial health. Accountants are well-placed to present the financial face of the organization before an investor or potential lender. They have the knowledge to showcase the business’ financial position and build confidence in lenders. Such confidence builds better opportunities and relationships.
Increase company profitability
Accounting is divided into various segments, and cost accounting is a segment dedicated to understanding the costs associated with running an enterprise. This type of accounting centers on the cost incurred in creating a product or selling a service. Cost accountants use this data to calculate the profitability of selling various products and services. They also set ideal prices that will enable the business to maximize profits. These accountants can also identify sources of waste and implement measures to eliminate them.