To ensure success and balance, every company needs a business accountant. Whether they’re keeping track of the business’ operations or ensuring that the owner is making the best decisions for the company, business accountants fulfill a range of vital roles and responsibilities. In this article, we’ll be discussing why the role of a business accountant is so important as well as answering some frequently asked questions.
What Is A Business Accountant?
At its core, a business accountant refers to the managerial accountant and bookkeeper of a business. They help to set long standing financial goals for the company while ensuring that the business is fulfilling its daily financial tasks. By having a business accountant, companies can better understand their finances, ensure compliance with tax laws as well as make more knowledgeable decisions based on the business’s finances. Being an efficient and successful business accountant requires a number of skills, such as:
Communication Skills: Much like other professions in the working world, being able to communicate effectively is vital for business accountants. The financial information of a business may seem complex to non-accountants, which is why it is important for the business accountant to be able to break down this information in a way that is understandable for the owner and their staff.
Business Knowledge: Having an understanding about how a business works helps accountants to view the business from the owner’s perspective, but also helps to create strategies for the business. Financial skills coupled with business knowledge help the owner and business accountant to make more informed decisions.
Financial & Mathematical Skills: A strong foundation in analytics and mathematics is an essential prerequisite for any business accountant. Because accountants are constantly working with critical financial data, they need to have a great level of skill and understanding when it comes to finances and mathematics.
Attention To Detail: When accountants make an error, no matter how small, it can have catastrophic effects on the business. Accountants need to pay extremely close attention when working out the finances of a company as coming in and out of the business needs to be recorded.
Computer Savviness: As technology has developed over time, so too have the nature of many professions in the workplace. Today, accountants use computers to keep track of a business’ finances instead of bookkeeping by pen and paper. Additionally, there are many advanced forms of accounting software available to use, which more and more business’s are incorporating into their workplace. A willingness to learn new technology as well as knowledge about using computers are greatly beneficial to business accountants.
Five Roles Of A Business Accountant
When it comes to the financial management of any business, accountants are a vital element. Whether they’re ensuring a business’s compliance with laws or providing valuable insights, the roles of business accountants far exceed financial analytics. Here are five key roles that a business accountant fulfills at their workplace:
Planning & Tax Compliance:
Tax efficiency and compliance with tax laws are a must for any business accountant. Accountants need to find ways to minimize tax liabilities by analyzing transactions and financial data. By guiding business owners on helpful tax strategies, companies can better reach their financial goals through educated choices. Additionally, accountants need to stay up to date with the newest tax regulations, adhere to those laws and regulations and be proficient in several tax codes, exemptions, and deductions.
Assisting With And Supporting Financial Decisions:
As an accountant, you are the financial advisor of the business. With this role comes a range of important tasks, such as supporting decisions within the business, evaluating the financial health of the business, and conducting cost analysis. Businesses can distribute resources in an effective manner through financial planning and budgeting guidance from accountants.
Preparing And Analyzing Financial Statements:
The financial statements of a business reflect the company’s financial health. It is the job of business accountants to analyze and prepare these statements for a variety of reasons, such informing the decisions that the company chooses to make. Information that is included in the creation of financial statements consist of income statements, balance sheets and cash flow statements. This information is then compiled into financial statements. Accountants then need to analyze the company’s data in the statements and find the patterns, anomalies, and trends of the business’s finances.
Forecasting And Budgeting:
To ensure the financial success of any company, proper forecasting and budgeting is essential. Every business has a set of objectives and tactical goals, which the accountant is partly responsible for regarding the management and development of the company’s budget. The job of an accountant is to ensure that the budget complies with these goals and objectives.
When it comes to budgeting, business accountants need to understand the market trends, historical data, future growth projections and financial health of the business thoroughly. Forecasting, which goes together with budgeting, involves taking the trends and data found through budgeting and predicting future financial results. Adjusting and monitoring, gathering financial data, allocating resources, and identifying expenses and revenue are some of the crucial steps involved in the budgeting process.
Risk Management And Internal Controls:
When it comes to safeguarding the reliability and integrity of financial reporting, risk management and internal controls are fundamental. Risk management involves the evaluation of potential risks that could affect the business’s record and financial health. Tasks related to the risk management of business accountants include advancing mitigation tactics, investigating market trends, supervisory change management and recognizing potential risks.
Evaluating the internal controls of the company involves taking these potential risks, creating control tactics to mitigate them, and implementing and monitoring those tactics. The stability and general success of a business are partly made possible through the effective management of internal controls and alleviation of risks by business accountants.
FAQ’s: What Is The Difference Between Bookkeeping & Accounting?
While there are several similarities that are shared between the role of a bookkeeper and a business accountant, there are some key differences separating them. Bookkeepers are known for recording the monetary transactions of a company, while accountants take this recorded data and use it for creating financial reports. Balance sheets, income statements and tax returns are some of the key reports that accountants generate based on a business’s financial transactions. Where bookkeepers collect and organizes financial information, accountants interpret those findings and showcase it to the owners of companies in a way that is comprehensible for them.
What Are Common Mistakes Made By Accountants?
Becoming a successful business accountant means more than acquiring the necessary skills and knowledge – it also means knowing what not to do. Here are a few mistakes made commonly by accountants that you should keep an eye out to avoid:
- Confusing the business’s professional account with a personal account. Unfortunately, this mistake occurs regularly among accountants and can negatively affect a company’s financial health.
- Not updating accounting books.
- Completing manual accounting as opposed to digital accounting. Because accountancy has become integrated into digital platforms, it is important to know how to do your accounting on a computer.
- Not ensuring effective communication between the company and the accountant. Communication is key in maintaining the financial wellbeing and progress of a business and should be thoroughly implemented.
- Failing to save and collect the company’s receipts. In the accounting world, every cent going in and out of the business counts. Losing or forgetting to account for the company’s expenses can lead to errors that impact the financial data of the business.
- Having no backup for the financial findings of the company. To ensure the success of a business, misallocating resources must be avoided at all costs.
What Are The Current Trends In Accounting?
Maintaining a successful business means staying up to date with the latest accounting trends. Whether you’re a startup or not, being in-the-know about what’s trending helps your business stay informed and relevant. Some of the current accounting trends include:
Automation refers to software that fulfills all the time-consuming tasks for you. Because the working world is constantly developing and adapting to new technologies, it’s important to be familiar with the latest accounting software and know how to use them. Not only does automation save you time, but it also reduces the number of mistakes you may make when accounting by pen and paper as your work is checked by a computer. With automated software, you’ll be able to perform more high-end financial tasks instead of spending countless hours recording data.
An accounting trend that is especially useful in working towards the success of a business is forecasting. With forecasting, accountants can take the existing financial findings of a company and use them to predict patterns and potential outcomes. By implementing forecasting, a business can stay on track for their financial goals as well as stay ahead of the curve for future financial strategies.
An efficient accountant needs to stay informed on the latest security measures and forms of digital privacy. Because accountants have access to a company’s most confidential financial data, utilizing digital privacy is a must for protecting financial information. Safety and security and essential to the success of a business as it failing to prioritize could lead to the demise of an organization. If you want to secure your company’s financial history, you may want to consider investing in reputable data security.
What Is Cloud Accounting Software?
Cloud accounting first became used among accountants in the early 2000s. This form of accountant utilizes the online space to store financial data on what is referred to as the ‘cloud’. The assets, expenses, income, and liabilities of a business are stored in the cloud and encrypted, meaning that only those that login with the company’s details can view these financial findings.
This type of software is especially helpful to businesses as owners and accountants can view the company’s financial health instantaneously.
Additionally, some forms of cloud accounting software allow you to customize the layout of your business’s finances so that you’re able to view what bills need to be paid, how your cash flow is looking and who owes the company money right on your dashboard. Another benefit to cloud accounting is all your data is automatically backed up since it’s all stored on the cloud.
SureBooks: The Home Of Competent Business Accountants
In this article we have examined and evaluated the many skills it takes to be a top quality business accountant. If you are looking for a competent accountant that embodies all these skills and abilities to help your business with its finances, then look no further than SureBooks. Our team of accountants are sure to help you with any financial obstacles you want to overcome. So don’t hesitate, call us today and find out how we can help you.