What Does an Accountant Do? Here Are the Details.
An accountant is responsible for the preparation and analysis of a company’s financial records. This includes data management, analysis and consultation, creation of financial statements and ensuring regulatory compliance in the company’s accounting practices.
Here’s What We’ll Cover
What Are the Duties of an Accountant?
The duties of an accountant can be broken down into four areas: Data Management, Financial Analysis and Consultation, Financial Reports and Regulatory compliance. For a description of each, please check out “Should I Hire An Accountant For My Small Business”.
What Qualifications Do You Need to Be an Accountant?
Unless you are planning to become a CPA (Certified Public Accountant), there are no standard set of requirements, government or otherwise, for individuals wishing to undertake a career in the accounting industry.
Because an accountant deals with so many different areas of business, like bookkeeping systems that store data, the preparation of financial statements and legal considerations, it is advisable to undertake a degree in accounting. As well, completing some business management and computer software classes can really help a candidate build his skills and start his career. The average degree takes four years to complete.
Keep in mind that someone interested in the field of accounting will need strong organization and communication skills, and the ability to be both resourceful and strategic. A lot of information about a company’s money needs to be processed and managed on a daily basis, and the results of the financial reports generated need to be properly communicated to management. If the results are disappointing and the figures need improving, management may task the company’s accountants to provide suggestions on how to improve. In other words, an accountant will not just be expected to ‘number crunch’, but to come up with viable solutions on how to cut costs or improve the company’s profitability.
Lastly, privacy is a huge issue in the field of accounting. An accountant will be privy to a lot of financial data, including staff and executive salaries, and the expectation is that this information will be kept strictly confidential.
Do You Have to Be Good at Math to Be an Accountant?
Since everything an accountant calculates is based on specific formulas, it helps to be good at math. However, that does not mean someone interested in accounting as a profession needs to be a math whiz or possess the ability to crunch numbers in his head. Especially today, when there are many digital tools out there that can help an accountant do his job.
Keep in mind that the one better understands math, the easier it will be to comprehend the financial equations that are used daily in the field of accounting, such as calculating “profit margin” or “burden rate”.
Are Accountants in Demand?
The Bureau of Labor Statistics (BLS) projects the employment of accountants (not CPA specific) to grow 10% from 2016 – 2026. 10% is considered excellent. BLS believes that figure is tied to the growth of the economy (as the economy grows, more accountants will be needed).
What Are the Best Cities for Accountants?
In 2018, Sparefoot and ZipRecruiter partnered together to figure out the top ten cities with the healthiest job markets for accountants. In their search, they took into account the average annual salaries for the profession, home and rent prices, and availability of accounting jobs at companies in these cities.
Their top 10 recommendations are, in order of opportunity, are:
10. Detroit, Michigan
9. Kansas City, Missouri
8. St. Louis, Missouri
7. Indianapolis, Indiana
6. Portland, Oregon
5. Denver, Colorado
4. Minneapolis, Minnesota
3. Seattle, Washington
2. Nashville, Tennessee
1. Grand Rapids, Michigan
How Much Does an Accountant Earn a Year?
An accountant’s annual salary depends on a number of factors, including education, size of company being worked for, and state the accountant is residing in. However, because the field is in demand, accountants can be expected to be paid reasonably well working in this profession, although not as high as CPAs (Certified Public Accountants).
According to the Bureau of Labor Statistics, which is a federal agency whose duties include measuring labor market activity, the 2017 median pay for an accountant is $69,350 per year. These figures are based on an annual wage for all workers in the accounting field. The higher above the median an accountant is being paid, the more likely this individual has undertaken and received a CPA designation.
According to the Journal of Accountancy, the average salary of a CPA in the United States in 2017 was $119,000. This figure does not include bonuses or other benefits.
Many interested in the field of accounting eventually do become CPAs. They earn the CPA designation after completing specific educational and work requirements, and passing an exam. A Certified Public Accountant is allowed to perform certain duties that regular accountants are not permitted to do, such as preparing an audited financial statement, or acting as a taxpayer or company representative in discussion with IRS Revenue Officers or Counsel. An accountant without the CPA designation cannot do any of these things.
A CPA is not an international designation, it applies only to the United States.