Accountancy is all about punching numbers into a spreadsheet, right?
Well, being good with numbers is an important part of the job but there’s so much more to it than that. An accountant has one of the most important roles in a business: managing the finances.
And they exist all year, not just when it’s time to file taxes! While many business owners may be brilliant at running their business, handling money, and creating budgets is a completely different story. This is one of the reasons why businesses hire accountants.
But what do accountants actually do?
This will depend a lot on where they work. General duties might include preparing and examining financial reports, dealing with payroll, and making sure taxes are paid on time.
If you’ve been thinking about a career in accountancy here’s everything you need to know.
What is an accountant?
Being an accountant is a professional and respected position that often forms the financial backbone of a company. Companies may have an in-house accountant (or team of accountants). They might also outsource the process to an independent accountancy firm.
Their main responsibility is to prepare, organise, and oversee the business’s financial records. The extent of what this involves will vary depending on the needs of the organisation. An accountant will also prepare financial reports and perform an analysis on the current and projected financial stability of a business.
What responsibilities does an accountant have?
Despite what you might think, the role of an accountant is incredibly varied and interesting. They keep track of a business’s finances in order to paint a picture of the health of a company, organisation, or individual.
There are so many factors that impact what a day in the life of an accountant looks like.
- The size of the organisation and the work they do.
- The financial health of the business.
- Any long-term goals and plans the business has.
Some general responsibilities an accountant is likely to have might be:
- Managing payroll. Larger businesses may have an in-house payroll team, but small to medium-sized companies often choose to outsource this work to their accountant. Duties involve preparing and processing monthly payrolls and maintaining payroll data
- Providing data and advice on the financial health of the business
- Troubleshooting any cash flow problems and reviewing the profit and loss of the company to look for any money-saving opportunities
- Ensuring compliance with regulatory and tax obligations, including making sure taxes are filed correctly and on time
- Chasing any unpaid invoices
- Working with business owners to achieve any long-term goals they might have. This includes putting together KPIs to meet and regularly monitoring them to see whether they are being met
- Interacting with internal and external auditors in completing audits and making sure the financial records are correct and organised in anticipation of an audit
- Administration and data entry, including bookkeeping
- Putting together a budget to help businesses manage their money more effectively
- Providing advice to new businesses on how to get started with looking after their finances
What key skills do you need?
Being good with numbers
Being good at maths is not the key to being a good accountant.
There is no real need for the complex mathematics you might learn studying it at degree level. Instead, it’s much more important that you can use the numbers to analyse and interpret them into usable, insightful data.
A high school level understanding of maths is therefore probably going to be good enough. A love for maths might be of more use to you!
Problem solving skills
This is a skill that will be useful no matter what role you have.
The ability to figure out problems yourself and come to a resolution will always be beneficial.
This is a particularly useful skill for accountants though, especially when dealing with an individual client or working with a business that is in financial trouble.
Businesses need you to tell them when you see a problem, but they also want you to offer up a practical solution.
An innovative way of looking at things will therefore be necessary at times.
An eye for detail
When it comes to managing accounts, the smallest mistake can make the biggest difference.
There is also going to be a lot of information that needs to be maintained accurately.
Having an eye for detail and the ability to find a needle in a haystack is an essential skill for accountants.
While it is uncommon, financial dishonesty is always a worry for businesses. There are both internal and external risks to think about.
This is why care needs to be taken when reviewing financial records to always be on the lookout for anything that looks suspicious.
Good computer knowledge
A medium to advanced level of Excel is important. A lot of accountancy work involves interpreting and using data in spreadsheets.
It’s also increasingly likely that you’ll be expected to be familiar with using accountancy software. A service like Xero or MYOB for example helps accountants to automate a lot of their processes.
The ability to pick new software up quickly will therefore be helpful.
Can you see into the future?
If you can’t quite predict the future, but you do have a knack for seeing problems before they become problems – it will help you in this role.
If you can see that there is likely to be a cashflow issue in 6 months’ time, you can put in place some damage control and suggest some cutbacks in the interim to account for it.
Communication and sensitivity skills
There may be times you need to tell your clients things that they don’t want to hear.
It may also be technical information that you’re trying to share, and you need to put it across in a way that they can easily understand.
This will also include being able to write and prepare written reports. These reports will contain technical financial information but should be digestible by those running the business.
Business can sometimes be a lonely place, especially if you’re running one on your own.
This is why communication and sensitivity are such great skills to have.
You can help to manage stress, offer solutions, and provide moral support when needed.
Working with businesses means that you will need a good understanding of how they work.
This includes both general knowledge and also any specifics of the particular organisation you’re working with.
For example, if you’re working with a non-profit as opposed to a government organisation, there will be big differences in the way you work.
This will be important to be aware of.
What qualifications do you need?
If you want to become an accountant, you will generally need to have both a relevant qualification and training.
Accounting is an industry that’s enjoying considerable growth and, upon completion of this course, it’s one that will open up a variety of career paths.
Monarch offers a Diploma of Accounting and Advanced Diploma of Accounting, both which have some prerequisites. You can read more about them here.
Accountant vs Bookkeeper
The two terms are often used interchangeably so it’s easy to think they are the same thing.
There are however some important differences between the two roles.
It’s probably easiest if you think of it like this: all accountants can do bookkeeping work but not all bookkeepers are accountants.
Bookkeeping is one part of an accountant’s role, but it can also be a standalone job.
You don’t need a bachelor’s degree to be a bookkeeper. It can be good experience for those looking to work in the accounting field.
Many small businesses will also prefer to hire a bookkeeper to manage their bookkeeping as they tend to be cheaper than an accountant for doing this work.
How much can you earn?
As mentioned above, being an accountant is a professional career. As such, the salary is commensurate with the work that it takes to become qualified and experience.
According to LinkedIn, the average salary of an accountant in Australia is $71,898.
There is, however, plenty of opportunity to earn six figures and there is lots of room for progression.
Is there career progression?
The future for accountancy is looking good.
Considerable growth is projected over the next few years which makes it the perfect time to start in the field. There are plenty of pathways for progression once you’re qualified and have some experience.
Even if you want to move out of the accountancy field, the skills you have will be transferable into banking, stockbroking, or a financial advisor position.
Some examples of where your career may take you are:
- Chartered Accountancy. Once you have been an accountant for some time, you can look into becoming a chartered accountant. This is not an easy process and is not something you should undertake lightly but it’s a position that recognises your dedication to the field. You will need to go through a process that includes meeting eligibility criteria, applying for membership, enrolling in a study program that involves 3 years of mentored practical experience, and then applying for chartership.
- Forensic Accountant. Forensic accountants are part accountant, part investigator. They examine accounts and reports to look for any suspicious activities. This can be used in police or regulatory investigations and forensic accountants may even be expected to give evidence in court if investigating a criminal matter.
- Tax Accountant. When you’ve been working in accountancy for some time, you might consider niching down. Tax accountancy is one specialism you can do. This will involve having a detailed knowledge of filing taxes per local and national laws.
- Auditor. Many businesses will turn to the services of their accountant to try and avoid being audited wherever possible! For accountants, it is therefore a good role to move into. You’ll know exactly what kind of things an auditor will be looking for in an accountant report. As an auditor, you’ll be on the other side of things. You’ll be reviewing a company’s financial records to look for any errors or inconsistencies that could be indicative of financial difficulty or any financial dishonesty in the organisation.
- Chief Financial Officer. This may be the ultimate career goal. Becoming a CFO puts you at c-suite level in an organisation. You’ll therefore be responsible for the company’s money at a senior management level while holding responsibility for the strategic running of the business itself.
A career in accounting is interesting and offers great variety in what you can get involved in. It’s a position that rightfully gets a lot of respect. While you have a lot of responsibility, you can be the difference between a business succeeding and failing.
There are many career pathways in accountancy. You’ve got more job options than you might think. You could work your way up from roles such as bookkeeper or payroll officer. Studying for a higher qualification while you start working in the field is a great way to have the best of both worlds. It’s up to you.
To explore your options in bookkeeping and accounting, check out Monarch’s courses here, or give us a call on 1300 738 955.