What Do Accountants Do? – Answered!

Did you know that every organization has trained financial wizards who work behind the scenes to make sure it runs smoothly? Yup, they’re called accountants. From preparing financial statements to managing budgets and making sure taxes are filed correctly, accountants can do it all. You’ll find accountants in all sorts of places: big corporations, small businesses, government agencies, and nonprofits. 

Accountants dig into the numbers, analyze data, and help make smart financial decisions. Whether it’s reducing costs or planning for the future, accountants are essential. In this article, we’ll look at what do accountants do, the different types of accounting, and how you can make a career in accounting. Let’s begin with the basics.

To put it simply, accountants are financial professionals who manage and analyze financial records. These professionals ensure accuracy and compliance with laws and regulations. Accountants also prepare and examine financial statements to make sure they are accurate and complete. They also handle tax returns, ensuring that taxes are paid properly and on time. Additionally, accountants may provide advice on cost reduction, revenue enhancement, and profit maximization.

An accountant’s role is crucial for financial decision-making and maintaining financial health. They need strong analytical skills, attention to detail, and knowledge of financial laws and regulations, and for this, they often hold certifications like CPA (Certified Public Accountant) to demonstrate this expertise.

As an accountant, you would be responsible for a ton of tasks for your organization. Let’s understand what do accountants do and some of their prime responsibilities: 

1. Financial Record Keeping: If you choose to be an accountant, you would be required to maintain accurate and complete financial records to track all transactions. This would make sure every financial activity is documented and can be referenced later.

2. Financial Statement Preparation: Accountants are often required to prepare and review financial statements like balance sheets, income statements, and cash flow statements. By doing so, they make sure these documents are accurate and comply with accounting standards and regulations.

3. Tax Preparation and Compliance: As an accountant, you may also need to prepare and file tax returns, to comply with all relevant tax laws. You would be required to stay updated on most tax regulations so that you can help your organization implement necessary changes and avoid penalties.

4. Auditing and Assurance: One of the prime responsibilities of an accountant includes conducting internal audits to verify the accuracy of financial records and compliance with policies. You may have to assist in external audits by providing required documentation and relevant explanations.

5. Forecasting and Budgeting: As an accountant, you should know how to develop and monitor financial budgets to manage your organization’s finances effectively. It would be part of your job profile to provide financial forecasts that help guide future business decisions.

6. Financial Analysis: They analyze financial data to identify trends, opportunities, and risks. Accountants offer insights and recommendations to improve financial performance and achieve strategic goals.

7. Advisory Services: Accountants advise clients or management on financial planning, investment strategies, and risk management. They provide guidance on complex financial transactions like mergers and acquisitions.

8. Regulatory Compliance: If you choose to be an accountant, you may also be required to ensure that the organization complies with financial regulations and standards. It would be one of your prime responsibilities to implement and monitor all internal controls to prevent errors and fraud.

9. Payroll Management: Lastly, accountants are also responsible for overseeing the payroll process to make sure employees are paid accurately and on time. They are needed to handle deductions, benefits, and tax withholdings to comply with legal requirements.

Accountants work in various settings, each offering unique roles and opportunities. Some of the common establishments that employ accountants include:

Public Accounting Firms

Accountants in public accounting firms provide a range of services, including auditing, tax preparation, and consulting for various clients. These firms can range from large, multinational organizations to small, local practices. Accountants in these settings often work with multiple clients, gaining diverse experience and expertise across different industries.

Corporations

If you choose to work at a corporation, you would be responsible for handling internal financial management like budgeting, financial reporting, and strategic planning. As an accountant, you would need to ensure the company’s financial health by managing cash flow, analyzing financial performance, and advising on cost-saving measures. Corporate accountants may specialize in areas like management accounting, cost accounting, or financial analysis.

Government Agencies

Working as an accountant in government agencies would mean managing public funds, and ensuring that taxpayer money is used efficiently and transparently. You would also be responsible for preparing financial reports, conducting audits, and ensuring compliance with government regulations. You’ll get to work at various levels, from local municipalities to federal agencies, and play a crucial role in public financial management.

Non-Profit Organizations

Accountants in nonprofits manage finances to support the organization’s mission and goals. Their prime responsibility is to handle budgeting, grant management, and financial reporting, ensuring compliance with donor requirements and regulations. As a non-profit accountant, you must balance financial efficiency with the need to fulfill the organization’s charitable objectives. 

Educational Institutions

In educational institutions, accountants manage budgets, financial planning, and reporting for schools, colleges, and universities. Working in educational institutes involves overseeing tuition processing, grant administration, and endowment management. Accountants in this setting make sure educational funds are allocated properly and support the institution’s academic and operational goals.

These diverse settings offer various opportunities for accountants to apply their skills and contribute to different sectors.

In this section, we’ll look at the steps of becoming an accountant. 

Becoming an accountant may seem difficult, but with careful planning and dedication to excel, it really isn’t really that hard. Follow these simple steps to learn how to become an accountant:

1. Obtain a Bachelor’s Degree: Start by enrolling in a bachelor’s degree program in accounting or a related field. Once you earn this degree, you would gain the foundational knowledge in accounting principles, financial reporting, and tax laws, which are essential for any accounting role.

2. Gain Relevant Experience: Next up, you could look for internships or entry-level positions in accounting to gain practical experience. This can help you apply your theoretical knowledge, develop essential skills, and understand the day-to-day responsibilities of an accountant.

3. Consider Advanced Education: If you want to advance your career or specialize, consider pursuing a master’s degree in accounting or business administration (MBA). This can open doors to specialized fields and higher-level positions, giving you an edge and making you more competitive in the job market.

4. Look for Professional Certifications: You could also consider obtaining certifications such as Certified Public Accountant (CPA), Certified Management Accountant (CMA), or Chartered Accountant (CA). These credentials will enhance your credibility and career prospects, leading to higher salaries and versatile job opportunities.

5. Stay Up to date on Industry Trends: By constantly updating your knowledge of accounting standards, tax laws, and industry trends, you can make sure you don’t miss out on a valuable career opportunity. You could consider applying for advanced education courses, workshops, and professional organizations to stay competent and relevant in your field.

6. Develop Technical Skills: In today’s day and age where technology has taken over almost every aspect of our lives, it’s important to be technically sound to excel in the field of your choice. It is a good idea to learn how to use accounting software and other relevant technology. Proficiency in tools like SAP and Excel comes in handy for efficiency and accuracy in modern accounting.

7. Build a Strong Network: One sure-shot way to grow as an accountant is to connect with other fellow professionals. Consider joining professional organizations such as the American Institute of CPAs (AICPA) or other local accounting societies. A strong professional network can lead to versatile career opportunities, professional growth, and mentorship from experienced accountants.

Next up, we’ll take a quick look at the multiple career opportunities you can explore in accounting. 

Did you know that as per latest data by the Bureau of Labor Statistics, the median annual wage for accountants and auditors was $79,880? This number goes to prove that making a career in accounting is a smart move as it can help you earn a handsome take-home salary. 

Accounting is a versatile field that lets you explore career options that make the most of your theoretical knowledge. Let’s look at some of the in-demand careers in accounting and how much you could possibly make with each: 

Public Accountant

First on the list is public accountants. As a public accountant, you would be working for accounting firms that provide services to a variety of clients, including businesses, individuals, and governments.  Your main responsibility would include tasks like auditing, tax preparation, consulting, and financial statement analysis. Public accountants often pursue CPA certification to boost their credibility and career opportunities. As of October 2024, the yearly average pay of a public accountant is around $63,662.

Management Accountant

Another popular career in accounting is becoming a management accountant. Also known as cost or managerial accountants, management accountants work within organizations to track and analyze financial data. They are required to prepare internal reports, including budgets, performance evaluations, and cost management strategies, helping management make informed strategic business decisions. Recent data shows that management accountants can earn a minimum wage of about $52,107 on a yearly basis.

Government Accountant

If you choose to be a government accountant, you would probably be working for federal, state, or local government agencies, managing public funds and ensuring compliance with laws and regulations. At these organizations, you would be responsible for budgeting, financial reporting, and auditing public resources to ensure transparency and efficiency in the use of taxpayer money. As a government accountant, you can potentially earn about $70,065 every year.

Forensic Accountant

As a forensic accountant, you would be a specialist in investigating financial discrepancies and fraud. You would be using your accounting, auditing, and investigative skills to analyze financial records. You could also get a chance to use your expertise by providing your expert testimony in legal cases related to financial crimes. While the salary of a forensic accountant varies as per education and experience, the average range lies anywhere from $58,074 to $70,065. 

Tax Accountant

One of the most in-demand careers in accounting, tax accountants typically focus on preparing and filing tax returns for organizations and individuals to ensure compliance with tax laws. They also offer tax planning advice to minimize liabilities and maximize benefits. They would also need to stay updated on changing tax regulations and policies. As per recent data, tax examiners can earn up to $58,530 every year. 

Internal Auditor

If you wish to be an internal auditor, you would be working within an organization to assess and improve its risk management, control, and governance processes. Your prime responsibility would be to evaluate the effectiveness of internal controls, identify improvement areas, and ensure compliance with regulations and internal policies. On average, an internal auditor can earn an annual salary of up to $80,414, which is an impressive number in the field of accounting.

Financial Analyst

Choosing to be a financial analyst involves analyzing financial data to help businesses make investment decisions. As a financial analyst, you would be evaluating financial statements, economic trends, and market conditions to offer recommendations on stocks, bonds, and other investment opportunities. Your prime work location would be banks, investment firms, or corporations. As per data collected in October 2024, the average salary for a financial analyst on a yearly basis is around $67,642.

These careers in accounting offer unique opportunities and challenges. This lets accountants specialize in areas that match their interests and skills.

Accountants play a key role in managing financial records and ensuring accuracy for individuals or businesses. From preparing financial statements, to managing budgets, and conducting audits, to making sure taxes are filed correctly, accountants are the backbone that ensure companies make smart financial decisions.

As accounting is a versatile field, careers in accounting are also diverse. You can work as a public accountant, handling taxes and audits for clients, or as a management accountant, helping companies with financial planning. There are also government jobs, like IRS agents, and opportunities in forensic accounting, where you investigate financial fraud. With strong demand and room to grow, it is safe to say that accounting is one of the most stable and rewarding career choices in today’s times.