An accountant is a financial doctor that assesses a company or an individual’s fiscal well-being. Profit and loss are both assessed by an accountant, as an indicator of how successful an individual or company is financially.
Accountants specialise in maths, accounting, law, and finance. They can be employed in house, and conduct internal audits, or they can be outsourced for external accountancy.
Investors call upon the service of accountants to get an overview of how well a client is doing. A responsibility often assigned to accountants is an annual report.
Their aim is to maximise profitability, and they come from all sorts of backgrounds: public practice firms, industry and commerce, as well as non-profit public sectors. They can analyse potential risk in company systems, to avoid a financial disaster.
One of their services includes maintaining client accounts, and effectively bookkeeping. Managers read accountant reports, rather than crunching the numbers themselves.
Fraud: To outsource accountants is a way of determining if a company is following the law. This is called an ‘audit’ and an accountant balances the numbers between receipts, invoices, purchase orders, and other financial documents.
Advice: The financial world can get complicated. An account is trained to give advice, and help their client keep as much money as possible, when faced with tax laws and other governmental sanctions.
Payroll: An employee’s favourite part of the job: the pay cheque. This is calculated by accountants, as well as retirement, holiday, and sick wages.
Payments: All business cheques go through the accountancy department. They are verified and checked before being forwarded to the business executives who can authorise and sign payments. Details of these outgoings are carefully recorded for file.
Responsibility: If an accountant fails to communicate the right information, or makes a misjudgement in fiscal advice, it can have severe financial ramifications. At worst, it could completely sink a company.
A new business or individual may not know their way around complex government laws and sanctions; often, they are completely in their accountant’s hands.
An accountant needs to know their law inside and out, so that a company complies entirely with regulations and pays their taxes. They also need to keep up to date with any changes to the financial system.
Technology: For small businesses, software applications and tools can meet their company’s needs. An accountant will be aware of what technology will get the best out of your business and advise on how best to network online.
Different Types of Accountant: Yes, there is more than one kind!
Management: A management accountant protects businesses by delivering financial information to those in senior roles. They look to the financial future of the company, and forecast how profitable the business will be in coming years.
Depending on the kind of management role, they might also offer solutions to financial difficulties or suggest how best to optimise profits.
Forensic: Forensic accountants solve the financial mysteries of a company. They analyse data and book-crunch, in order to ascertain if a business is being fraudulent or offending the law.
This guest post was written on behalf of Brookson accountants for contractors, by Francesca a blogger from the UK who is interested in finances and money management.