What is Accounting?

Accounting is “the process of recording financial transactions pertaining to a business,” according to Investopedia. This process includes analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities,” Investopedia notes. For example, at a restaurant, recording the number of transactions made, revenue generated, associated costs, and profit earned is a form of accounting. At a school, maintaining information about educational expenditures and teacher salaries is another type of accounting.

Accounting is more than just keeping track of purchases and expenditures. Capital and assets (how many valuable items or how much material an organization has on hand) and liability (how much is owed to other organizations) are also taken into account throughout the accounting process. Accountants themselves are crucial to this process, navigating complex financial materials and providing analysis and insight to their clients, employers and larger organizations.

Here are the most popular accounting jobs:

• Bookkeeper

• Finance Manager

• Government Accountant

• Certified Public Accountant (CPA)

• Accounts Payable Specialist

• Internal Auditors

• Tax Accountant

• Forensic Accountant

• Public Accountant

• Budget Analyst

What Are the Different Types of Accounting Jobs?

There are various types of accounting jobs, each with its own responsibilities, levels of seniority, and expectations. Something that all accounting jobs have in common is that they include the evaluation and interpretation of a person’s or an organization’s financial activities in some way. An accountant may help to organize a midsized company’s financial information, while a tax auditor may focus on determining if the company paid the necessary amount owed to the tax authority (for example the state government or the IRS). The main responsibilities vary significantly for each position, but they’re all focused on interpreting and analyzing financial information.

Some common types of accounting jobs include auditor, budget analyst, accounts payable specialist, tax accountant and forensic accountant. Just as these positions can vary, so can the educational and professional requirements needed to secure one of these jobs. A forensic accountant may need additional certifications, while a budget analyst doesn’t; that budget analyst can benefit from an advanced degree, while a tax auditor in the same field may not.

Because each role has different responsibilities and requirements, it’s impractical, if not impossible, to jump between accounting roles. Aspiring and current accounting professionals need to decide which aspect of accounting they want to pursue and understand each role’s necessary requirements and responsibilities.

Where Do Accountants Work?

One of the benefits of the accounting profession are the various industries in which one can work. A tax auditor may work for a federal agency in Washington D.C., while a budget analyst may interpret and manage a coastal California town’s finances.

An accountant payable specialist may work for an exciting media conglomerate, and a forensic accountant may work with private and public organizations to more deeply interpret a person’s or company’s spending patterns. Generally speaking, if there’s an industry that must organize and evaluate its finances in some way, there’s an accounting professional or role that’s suited for that field.

What Is an Auditor?

Based on information from the accounting and consulting firm PwC, an is the examination of the financial report said company or organization, conducted by someone independent of the organization, known as the auditor. The financial report itself “includes a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes comprising a summary of significant accounting policies and other explanatory notes,” PwC states.

An auditor’s responsibility is to evaluate whether what the company or organization presented in its report truly reflects the company’s financial status. What an auditor must do is look at the following:

• Whether the company/organization underreported or misreported certain capital or assets

• Whether employees and workers have been misclassified, intentionally or unintentionally

• Whether the company/organization is accurately recording its profits and gains

• Whether the company/organization properly paid its true amount owed in taxes

According to Investopedia, on any given day, auditors can evaluate the value of assets, communicate with clients, collaborate with peers and investigate financial documents. An auditor’s workload typically peaks around January to March, as most companies’ ends of the fiscal year are in that previous December, requiring them to file their audited financial statements in a given time-frame.

The U.S. Bureau of Labor Statistics (BLS) lists the median annual salary for accountants and auditors in the finance and insurance industry as $74,690 in 2018, whereas $70,500 was the median salary for accountants and auditors in all industries. The BLS’ projected job growth rate for these roles is listed as 6% from 2018 to 2028. Auditors themselves typically need a bachelor’s degree in a related field such as accounting, and a master’s degree is typically necessary to earn promotions into more senior roles, which require a CPA license as well.

Job Description of a Budget Analyst

A budget analyst is an accounting professional who works with someone in a managerial role to oversee a company’s or an organization’s budget. Some sectors and industries that benefit from budget analysts include:

• Budget analysts can help to maintain the budgets for small cities, government agencies or larger federal offices.

• Higher education. School departments, entire universities and larger educational systems can use budget analysts.

• Budget analysts can maintain the budgets for national retail store chains. They can also manage the budgetary processes of brands that sell in those.

• Not-for-profit organizations. Budget analysts can help develop a not-for-profit organizations budget, prepare reports, as well as evaluating funding and how it is being used.

On a daily basis, budget analysts can be involved in planning and organizing budgets, overseeing and approving proposals, combining smaller budgets into more comprehensive ones, making cases as to why certain budgetary requests should be approved, and tracking an organization’s spending, according to the BLS. The BLS also notes that the median annual pay for budget analysts was $76,220 in 2018, with a 4% projected job growth rate from 2018 to 2028.

Those who thrive as budget analysts have a strong background in math; a thorough accounting and analytical skill set; are highly meticulous and organized; and have strong communication skills, as they often have to explain budgetary processes and protocols to others in an organization. Budget analysts often hold bachelor’s degrees in accounting or a similar field, while the most in-demand candidates can have a master’s degree in a business specialty.

What Does an Accounts Payable Specialist Do?

Businesses and organizations often receive invoices and bills for goods and services that have been provided to them. For example, a media company may receive an invoice from a freelance photographer or a writer for work that was completed. A nonprofit organization may seek the services of a marketing consultant, who will provide a bill for services rendered or to be rendered.An accounts payable specialist is a type of accountant who manages and documents these types of payments and financial transactions. According to Investopedia:

A company’s total accounts payable (AP) balance at a specific point in time will appear on its balance sheet under the current liabilities section. Accounts payable are debts that must be paid off within a given period to avoid default. At the corporate level, AP refers to short-term debt payments due to suppliers.

With those invoices and bills, payment often must be made by a certain date. If the invoice or bill is past due, nonpayment can put the business at risk of actions such as default or even lawsuits. The short-term payments that accounts payable specialists handle are different from longer-term types of debt, such as small business loans.On any given day, an accounts payable specialist can monitor new invoices, maintain balance sheets, prioritize payments, recommend best payment practices to staff members, provide information to other accountants and communicate with external partners about payments. Because the job focuses on such meticulous, detail-oriented record keeping, accounts payable specialists need to be alert and able to effectively evaluate invoices and bills, have strong communication skills to share their findings with others, be analytical and creative when optimizing payment solutions, and be able to collaborate with other business partners.As of March 2020, PayScale notes that the median hourly salary for accounts payable specialists is $18.58. The BLS projects a 4% decline in bookkeeping, accounting and auditing roles from 2018 to 2028. Educational requirements for these types of roles can vary depending on factors such as seniority, company size, and the actual invoices and bills being handled. The BLS notes, though, that for bookkeeping, accounting and auditing roles, employers generally like candidates to “have some postsecondary education, particularly coursework in accounting. However, some candidates can be hired with just a high school diploma.”

How to Become a Tax Accountant

Most people can file their taxes without a tax accountant’s assistance. They collect information regarding the money they’ve received from their jobs; note any necessary deductions, credits and expenses; and submit their information to the IRS. But there are numerous other parties and organizations — whether they be multinational corporations with offices and operations across dozens of countries and encounter unique tax issues, or ultra high-net-worth individuals who hold diverse, complex and wide-ranging financial portfolios who are trying to make sense of how much they owe the IRS — that benefit from the expertise and services of tax accountants. A tax accountant analyzes financial documents and prepares statements to ensure timely tax payments. The documents that the accounts payable specialist maintains and prepares can later be interpreted by a tax accountant to determine how to incorporate that information into necessary tax payments. A tax accountant can also focus less on a business and more on a person’s tax situation and status.

According to the Houston Chronicle, on any given day, a tax accountant could handle the :

• Tax planning

• Tax law research

• Tax and income analysis

• Tax preparation

• Client meetings

These services are often in high demand during tax season, from January to Aprill, However, tax accountants may also need to complete their work by other deadlines, such as September 15 and October 15, especially when they are not involved with business entity taxes. Even outside of this window, tax accountants still have other duties. Robert Half, a recruiting firm, notes how “organizations have audits, strategic financial planning, bookkeeping and many other tasks to deal with year-round” in which tax accountants can prove beneficial.

The BLS notes that the median annual salary for accountants and auditors was $70,500 in 2018 and that the projected job growth rate is 6% between 2018 and 2028. The projection can be attributed to individuals and organizations always needing to pay taxes, and accountants and auditors will often be needed for their valuable services and skill sets.

An individual must meet extensive educational and professional requirements to become a tax accountant. Possessing a bachelor’s and master’s degree in a related field is often necessary. Additionally, earning a certified public accountant (CPA) designation is a crucial step in establishing that an accountant holds legitimacy and is cognizant of necessary tax requirements and laws before becoming employed.

What Is a Forensic Accountant?

While an effective tax accountant typically helps to properly prepare tax returns for clients, sometimes individuals and organizations improperly file their taxes, whether intentional or not. A company can report that it lost money in a given year when it actually made a profit, or an individual can claim certain deductions or withhold information about additional income when filing a yearly return. Even government agencies such as the FBI are in need of effective forensic accountants to investigate the financial activities of suspected and wanted criminal parties and organizations.

In these instances, forensic accountants are the professionals who take a deeper dive into a person’s or group’s financial background to determine whether a crime has taken place. “Forensic accountants are trained to look beyond the numbers and deal with the business reality of a situation,” Investopedia notes.

Some types of cases that forensic accountants can help to investigate include:

• Determining if an individual or organization intentionally deceived others for gain.

• Investigating whether monies or funds were collected by employees that belonged to their employer.

• Money laundering. Determining whether certain methods or channels are being used to help hide illicit cash flow.

• Tax evasion. Interpreting financial documents to discover whether individuals aren’t paying their taxes.

A forensic accountant’s daily responsibilities can vary by organization, but they typically involve analyzing complex financial data to uncover potential wrongdoing. For example, forensic accountants with the FBI, according to the agency’s website, “understand the overall ‘big’ picture of the case,” communicate their findings to others, take notes of suspicious payments and financial actions, and spot other potential wrongdoers in cases.

The BLS lists the median annual salary for forensic accountants as $80,180 in 2018 and projects 7% job growth from 2018 to 2028. Forensic accountants often possess a bachelor’s or master’s degree and have an accounting background.

The Future of Accounting

All types of accounting jobs incorporate the organization, management and analysis of financial information in some way. Each job’s specific duties and requirements can differ. Aspiring accounting professionals must therefore understand the differences between these roles and which may be a better fit for their career goals and skill sets.

In the midst of evolving business and technology trends, the nature of an accountant’s work has shifted dramatically. Professionals who are willing and able to adapt to these new trends have the best chances of earning different types of accounting jobs, in which they’re in a position to help organizations to navigate and make sense of an ever-shifting financial landscape. Accountants who can embrace new mobile accounting platforms and software, as well as understand new tax codes and investment opportunities, will be primed for success.

Source:

Internet, Accounts & Finance Books