Accounting is a broad and varied profession. When you study accounting, you’ll find that you can apply your education to a wide range of possible functions within a business. You can specialize yourself to serve your employer, if not your own business, in a variety of ways. You can also work in any industry and many departments within each of them. Government work is also a common employment choice for accountants.
Some accountants make their careers in the financial sector. They apply their ability to analyze corporate health to deals that can include initial public offerings, mergers, and acquisitions. These accountants don’t often engage in functions such as audits, but their knowledge and expertise enable them to assess an auditor’s conclusions with an educated eye.
Other accountants perform more managerial functions. If you move your career in this direction, you will be tasked with projects dealing with budgeting, maximizing efficiency, checking for errors, or even theft in the system. Managerial accountants might also work in information technology, where they audit an organization’s technological systems in search of new ways to optimize workflow or overall efficiency.
Two Forms of Accounting
Managerial
Managerial accountants are an integral part of a business’ daily operations. They seek to find new ways to maximize efficiency, write budgets for new projects, and even perform audits on various systems. One key function of a managerial accountant is cost control, which can mean anything from finding cheaper toner for the copiers to shaving minutes from worker’s hours to save the company thousands of dollars.
They also work to evaluate employee performance to ensure that the organization receives the most productivity possible from the payroll expenditures. When individuals or departments are found to be too inefficient, accountants might seek ways to improve workforce output. This could entail upgrading technologies, discovering new workflow methods to improve how work is actually done, or even outsourcing labor to other sources.
Managerial accountants might work for a single organization and continually seek to improve its functioning and efficiency. They might also work as consultants for organizations all over the nation and world. In each case, these accountants need to work closely with department heads in a range of areas. They might need to assess efficiency in a manufacturing facility or discern how to best upgrade IT functions in a small company.
Managerial accountants frequently will focus on a specific industry where they will become experts and forge a successful career. This is important because each industry has an individual set of issues to work with. Healthcare, for instance, must abide by certain regulations governing patient care. On the other hand, the automotive industry deals with a whole different type of regulation.
Here is a brief list of other managerial functions accountants perform regularly:
- Budgeting – both for individual projects and the company as a whole
- Cost Controls – determine company policy for areas such as payroll or accounts payable
- Employee Evaluations – analyze the workforce to see where improvements will result in savings
- Fraud Control – investigate shortages to ensure that neither outside theft nor inside embezzlement is occurring
- Error Control – accountants analyze how and why errors happen to help determine how to avoid them in the future
Financial
Financial accounting is the other main function of an accountant. This set of functions is also called stewardship accounting. This might be what most people think of when they think of a staff accountant; a professional tasked with aggregating and analyzing the hard numbers.
Stewardship accounting is always concerned with keeping accurate financial records. They need to ensure that every penny spent or earned is recorded accurately. That is, it’s vital to know how certain transactions can be accounted for on a tax return.
In a publicly traded company, this sort of classification can be incredibly helpful when putting together quarterly and year-end documentation. Shareholders need to have an accurate accounting of the company’s finances and also a fair and objective description of those figures. Sometimes, a company will have one-time expenditures that will dramatically impact overall earnings or profits. On the other hand, shareholders need to understand how a sell-off of assets can result in a revenue spike, which is unlikely to repeat.
Financial accountants might also analyze the company’s overall fiscal health with regards to multiple factors. They can take into account external events that impact financial health including taxation, government regulations, or even weather events. In some cases, financial accountants might make the seemingly counter-productive recommendation that a company take on more debt. However, when seen in a broader perspective, that debt can offset profits and thus help the organization avoid taxation.
A financial accountant’s duties can include, but are not limited to:
- Recording financial transactions
- Describing financial transactions
- Translating financial data for executives or shareholders
- Calculating the actual bottom line for a company
- Preparing reporting documents such as the Annual Report
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