What Is an Accountant and What Do They Do?
Learn what is an accountant and what an accountant do on their jobs. An accountant is a practitioner of accounting or accountancy. Learn Job Duties of an accountant
An accountant is a trained and qualified person in bookkeeping. He prepares, audits, and analyzes your accounts. He prepares annual reports on your finance and provides statements of planning. He also guides you in investments and advises you on tax laws.
Some small business thinks that the accountant job is to fill the form, which is not the case. An accountant is much more than that. An accountant can benefit you in several ways. He can help you to grow your business very efficiently.
We will discuss some of the benefits of hiring an accountant for your business.
An accountant is a person who is involved in keeping a record of financial accounts. He is responsible for keeping those records up to date to be used for further processing.
He is the guy who is qualified in bookkeeping, auditing, and analyzing financial statements. He not only makes financial statements but is also associated with the maintenance of these accounts. If you have a well-qualified and experienced accountant, it will be considered an edge for your business.
Definition of an Accountant
There are different definitions of an accountant
The person whose duty is to make financial statements and upgrade them from time to time is known as an accountant.
Another definition suggests
“A qualified individual who maintains the books of accounts of any company is known as the accountant.”
"A person associated with keeping records, maintaining accounts, and performing audit and financial statement analysis of a company is known as an accountant."
History of Accountant
In 1887 the first association for accountants was formed named as American Association Of Public Accountants. After that, it became a profession, and different shareholder lead business professionals started hiring accountants to have more information about financial statements.
For being an accountant whose work is to record data and maintain books of accounts, you need a simple business degree, but different companies have different standards. Some require an MBA.
Some are also good with a BBA degree. But to do an audit, you need to get some certifications like CA (Chartered Accountancy), ACCA (Association of chartered certified accountants), ICMA (Institute of Cost and Management Accountants), etc.
CA( Chartered Accountant )
Research says that CA were the first accountants to form a professional body established in 1854 in Scotland. They are qualified in all stages of business, like audit and taxation, business, and finance.
For being a Chartered Accountant, you need to pass individual modules and three years of article ship from any reputed organization is compulsory.
ACCA (Association of chartered certified accountants)
It was founded in 1904. People with an ACCA certificate are eligible for working in different areas of finance. ACCA consists of 14 papers 1st two papers are online examination. After passing 14 papers, they are also required to do article ships for a certain period.
CIMA( Chartered Institute of Management Accountants)
It is a professional association for accountants. It is based in the UK. It has 227000 members and became a member of IFAC(International Federation Of Accountants) on 7th October 1977.
Rules For Accountants
Accountants are required to abide by specific rules to keep books of accounts. There are some standards that accountants have to follow while preparing books of accounts.
Job Description for accountants
Different companies have different job duties for accountants, and mainly they include
- Passing entries related to assets, liability, and capital accounts.
- Analyzing account information
- Updating accounts
- Maintaining transaction details
- Making Bank Payments
- Preparing Bank Reconciliations
- Dealing with interbank fund transfer Payments(IBFT)
- Preparing Financial Statements.
- Maintaining asset registers
- Reviewing and Auditing of Financial Statements.
- Analysis of all kinds of financial statements and presenting an accurate and fair view of an organization’s financial position.
- Payroll processing.
- Estimating and projecting budget lines for new projects.
- Deduction of taxes on transactions as per the laws of the state.
- Presenting reports to management about the financial situation of the company.
- Maintaining excellent details and recovering the receivables.
- Prepare, review, and recommend the accounting policy manuals according to the requirements.
- Ensuring all the transactions to be in strict compliance with International Financial Reporting
- Standards (IFRS).
Saves your Time:
Hiring an accountant for your firm will help you in saving a lot of time. You can utilize that time in tackling some other issues.
If a business is filling its forms by themselves, then questions arise: are they filling them correctly?
Are they giving it the proper time to fill?
Are they delivering it on time?
If not, you are not working under the deadline, and you might get penalized for this. For example, submitting the forms and company accounts to HMRC.
If somehow you can complete it in time, that possibility is quite high that there are mistakes in filling that form, and it will be sent back to, to fill it again. It will consume a lot of time.
Saves your Money:
Let’s assume that you can fill your form in time and with no errors, and you are confident enough to fill it by yourself. But are you filling the form efficiently? By efficiently, we mean that is it saves you any money? Probably no.
An accountant is a trained person who can save you money by filling up the form efficiently. He will try to minimize your tax by using every legal constraint.
Ever wonder why rich people are paying fewer taxes than the people working in offices. Regardless of moral wrongs and rights, they are smart enough to hire an accountant to manage their taxes.
They use the ever-changing tax laws to minimize their tax as low as possible. Saving little taxes throughout the year will make it a handsome amount in the long run.
Time and money are commodities that are very crucial for any business. And saving them has justified the worth of the accountant, but that is not it. An accountant can help in many other ways.
Helps your business to grow:
If you have started a new business and considered it a waste of money to hire an accountant, then think again. Minimizing your work and tax and accountant can be a game-changer for your business.
These are some critical decisions that new businesses have to take, making, or breaking them in the future.
The accountant knows the business as good as you know, and he might know the financial sides better than you. So, hiring a person who is not emotionally attached to your business but provides its input to make it grow is priceless.
It’s worth hiring an accountant for the sake of the growth of your business. He knows what is legally correct and beneficial for the business and how he can utilize these legal ways to enhance it.
But be wise while choosing an accountant. Choose a specialist accountant who knows his work, and it's better if he specializes in the contractor market.
- Passing entries related to assets, liability, and capital accounts.