How to become an accountant: your complete guide
Every career sector needs an accountant for one thing or the other ranging from tax accounting to forensic auditing. Even religious organisations and social clubs sometimes seek the professional expertise of accountants or even keep one or more as an employee. No matter the industry or size of an organisation, there is always a need for an accountant, no matter the number.
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The career as an accountant is not only lucrative but also in high demand for some years. If you decide not to work for an organisation, as an accountant, you can set up as a freelancer and take on individuals and companies as clients. Either way you choose to go, you can never go wrong.
If you are thinking of starting a career in accountancy, this article is the right guide to help you through the process.
So, what do accountants do?
Accountants analyse and interpret financial information in an organized and precise manner to help company directors make informed decisions to maximize profits. When an accountant does his job well, the financial health of a company becomes understandable and he can then provide advice to the management to help make strategic and informed decisions.
An accountant can be tasked with budgeting, procurement, financial advice, forecasting, risk analysis, and reporting, tax advice, auditing, and ensuring compliance of financial statements with company and government laws and regulations.
Types of accountants
There are many types of accountants depending on the duties they perform and the certifications they hold. Here are a few of the important ones and their duties.
- Certified public accountants (CPAs) – A CPA in the UK is an accountant certified by the Certified Public Accountants Association (CPAA). The CPAA issues two types of certifications. To become an Associate Certified Public Accountant (ACPA), the accountant must either be a member of a CPAA-approved organisation, have obtained CPAA-approved qualifications and experiences, or be QBE (Qualified By Experience). Becoming an FCPA (Fellow Certified Public Accountant) requires an equivalent chartered certification from another approved organisation or relevant years of experience.
CPAs have varying duties ranging from auditing and review to tax preparation and consulting, financial planning, and litigation consulting. The career path of a CPA has a wide range, from public accounting to corporate accounting, and government services, and may even rise to an executive position in a company such as CFO (Chief Financial Officer) or Controller.
- Auditors – Auditors must generally hold an ACA (Associate Chartered Accountant) or FCA (Fellow Chartered Accountant) certifications from ICAEW (Institute of Chartered Accountants in England and Wales) and also be a CPA. These certification awarding bodies (ICAEW and CPAA) teaches accountants courses that address the different types of auditing (internal and external), thus preparing candidates for a possible career in auditing.
Internal and external auditing duties are similar which include preparation of financial statements as well as providing advice on tax and treasury issues, approval procedures, employee financial responsibilities, and management policies. They also prepare and examine financial records to identify opportunities or risks that could impact a company's efficiency and profits. External auditing however reviews internal financial statements, provides feedback and ensures that the company’s financial statements are in accordance with the relevant laws.
- Government accountant – government accountants in the UK are certified as chartered public finance accountants (CPFA) which are awarded by the CIPFA (Chartered Institute of Public Finance and Accountancy). Government accountants manage the use of the taxpayer revenues, perform financial performance and compliance audits, investigate frauds, and recommend helpful actions at all levels of government in the UK. Government accountants have the important duty of managing the use of federal, state, and local taxpayer dollars. Government accountants ensure that governmental bodies are transparent, efficient, ethical, and responsible in their use of funds.
- Financial accountant – a financial accountant typically manages a team of accountants who prepare a company’s financial statements and reports, and thereafter provide financial advice to the management, shareholders, or investors (potential or existing).
- Management accountant – a management accountant does all the work of a financial accountant but his/her information and advice go to the company management only, and never to any external body or person. A management accountant would most likely be chartered or CPA certified since this role is synonymous with CFO or Controller.
- Cost accountant – cost accounting is a subdivision of managerial accounting. A cost accountant helps the company analyse and determine the actual costs of goods and product manufacturing such that profits can be maximised while limiting wastage. There is no specific certification required for a cost accountant, however, being a CPA might be an added advantage to demonstrating knowledge in the field.
- Staff accountant – this is a mid-level accountancy position and may be regarded as entry-level in some accounting firms. While a staff accountant is not required to be CPA certified, he/she must have a bachelor’s degree in banking, finance, accountancy, or any other related field. Since a staff accountant is generally considered a mid-level position, it goes to say that such a person would have more experience and certifications than the entry-level accountant. Also, in terms of duties, a staff accountant may be upgraded from balance sheets, budgeting, and expense tracking, to more advanced duties like assisting the senior accountant with budget expansions or planning for large purchases.
- Forensic accountant – this accountant is tasked with investigating large and complex financial data of an institution or company. These accountants usually come into play when there is an issue of fraud, misappropriation of funds, embezzlement, or insurance claims. They simply ensure the amounts of money and assets are where they are said to be.
- Tax accountant – as the name implies, a tax accountant helps the company to organize its financial statements for proper and legally compliant tax filing. He also provides advice to help the company legally reduce tax spending, and keep up-to-date with tax legislation.
What does an accountant do daily?
Budgeting – an accountant uses past budgets and expenses of the company or organisation to propose an adequate budget for a period of time which may be quarterly or yearly. A good budget ensures all bills are paid including the salaries of employees.
Procurement – this entails ensuring payments are made for any goods or properties being purchased by the company. An accountant has to make sure that all ducks are in a row where the company purchases are concerned, that is, he/she ensures that the prices negotiated are reasonable and that the goods are in perfect conditions at the point of purchase. The accountant can seek expert opinions especially when technical know-how is important to ensure the functionality of pieces of equipment.
Financial advice – the accountant gives financial advice to the management to ensure that they maximize profits while reducing overhead costs.
Forecasting – to make good budgets, an accountant must be adept at understanding the cash flow of the company. This way, he/she would be able to make forecasts and advice the company management accordingly.
Risk analysis and reporting – this process is also important. The accountant has to identify points at which the company could run into financial loss and report back to the management on his/her findings.
Tax advise – tax evasion does not necessarily mean evading tax in its entirety but leaving out important details of the company’s finances of which the government would have taxed them. Therefore, it is the duty of the company accountant to ensure that there is proper documentation of the company’s finances such that taxes are remitted duly. The accountant also looks for ways to reduce the total tax paid, in line with the law. A good understanding of tax laws, which should be regularly updated, is very important for this.
Auditing – the accountant also ensures that there are no discrepancies in the company’s financial records. He/she ensures that every dime is where it is said to be.
Ensuring compliance – the accountant ensures the compliance of the company’s financial statements with company and government laws and regulations.
How to become an accountant?
- Obtain a bachelor’s degree – while this may seem unimportant since the AAT certification could be equivalent to a bachelor’s degree, holding a BSc certification is usually an added advantage to land lucrative roles in some companies. A bachelor’s degree in financial accounting, mathematics, or any other related field is always a plus on the route to being a successful accountant.
- Consider pursuing continuing education – if you did not have a BSc, continuing education may be your best alternative. Some levels of continuing education are equivalent to a part or full BSc. Some of those include diplomas like HNC, HND, CertHE or CertCE, DipHE, or post-graduate studies. Although these tend to be more academic than practical, they still give you a competing advantage when applying for an accounting role
- Choose a specialty – there are many areas of accounting from which you can choose. It is important to know that you do not have to be a Jack of all trades in accounting. Choose a specialty and develop yourself in it. This could even be of advantage if you decide to set up as a sole trader or freelancer.
- Get an internship or entry-level position – training is important on the road to being a successful accountant. This step also ensures you get certified as chartered or even as a CPA.
- Determine whether you will be an accountant or a CPA – not every accountant is a CPA. You can choose which role you want and how you want to go about it. Becoming a CPA involves passing some higher-level exams and gaining some required years of experience.
- Pass all required exams – depending on the certification you are aiming for, make sure to prepare well and pass all required exams to qualify.
Being an accountant is one of the most fulfilling jobs in the world and you get paid handsomely for doing it. So, if you want an accounting career, it is never too late to start.
How to become an accountant in the UK?
1. Become AAT certified
After getting an accounting degree in a university (or not) you need to become AAT certified because without that you cannot practice as an accountant
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