Find Out What Does an Accountant Do and How To Become One

Introduction

Have you ever wondered what accountants do and why they are so important, especially in large enterprises? Accountants play a crucial role in the financial health of businesses by ensuring accurate financial records, timely tax payments , and smooth financial operations. For enterprise businesses, having skilled accountants is essential for maintaining financial stability and supporting strategic decision-making.

Accounting has a long history, dating back thousands of years to ancient civilizations. The evolution of this profession has significantly shaped business operations, making it an indispensable part of the modern financial world. In this blog, we will explore the role, duties and responsibilities of accountants, the skills they require, and how technology, particularly AI, has transformed the accounting profession. 

What Is An Accountant?

An accountant is a professional, responsible for managing and analyzing financial records and ensuring the accuracy of financial information for businesses and individuals. They play a pivotal role in maintaining the financial integrity of an enterprise, providing critical insights that drive business decisions.

Over centuries, accounting has evolved into a sophisticated profession that employs complex techniques and advanced technology. The invention of double-entry bookkeeping in the 15th century marked a significant milestone, laying the foundation for modern accounting practices by recording each transaction into two accounts

Today, accounting encompasses various specialties, including forensic accounting, management accounting, and auditing. Accountants are no longer just bookkeepers; they are strategic advisors who help businesses navigate financial challenges and capitalize on opportunities. The integration of technology, such as accounting software and data analytics, has further transformed the profession, enabling accountants to deliver accurate and timely financial insights.

What Does An Accountant Do? 

Accountants and auditors prepare and examine financial records, identify opportunities and risks, and provide solutions for businesses. They ensure the accuracy of financial records, evaluate financial and data risks, and ensure proper tax payments. Accountants uphold financial integrity and compliance in organizations.

While their roles can vary significantly depending on the size and type of organization, there are some core responsibilities that most accountants share. These are:

Duties & responsibilities of an accountant 

1. Recording financial transactions: Accountants meticulously document every financial transaction, ensuring that all income and expenditures are accurately recorded. This includes managing accounts payable and receivable, payroll, and inventory records.
2. Preparing financial statements: They prepare essential financial statements such as balance sheets, income statements, and cash flow statements. These documents provide a comprehensive view of the company’s financial health and are crucial for making informed business decisions.
3. Budgeting and forecasting: Accountants create budgets and financial forecasts to help businesses plan for the future. By analyzing past financial data, they can predict future revenues and expenses, helping organizations allocate resources effectively.
4. Tax preparation and compliance: One of the key roles of an accountant is to ensure that the organization complies with tax laws. They prepare and file tax returns, identify tax-saving opportunities, and ensure that all tax obligations are met on time.
5. Auditing and internal controls: Accountants conduct internal audits to verify the accuracy of financial records and assess the effectiveness of internal controls. This helps prevent fraud and ensures that the organization’s financial practices adhere to regulations.
6. Advising on financial strategies: Beyond crunching numbers, accountants act as financial advisors. They provide insights on cost reduction, investment opportunities, and financial strategies that align with the company’s goals.

What Skills Do Accountants Need? 

Accountants require a blend of technical knowledge and soft skills to effectively manage financial tasks and support business decision-making. Here are some of the essential skills every accountant should have:

Technical skills

1. Proficiency in accounting software: Accountants must be adept at using accounting software. These tools help streamline financial processes, from recording transactions to generating reports.
2. Knowledge of accounting principles and standards: A solid understanding of Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) is crucial. These standards ensure that financial statements are accurate and consistent.
3. Mathematical skills: While advanced mathematics is not always required, accountants need strong numerical skills to perform calculations, analyze data, and ensure accuracy in financial reporting.
4. Financial analysis: The ability to interpret financial data and draw meaningful insights is essential. Accountants must be able to analyze financial statements, identify trends, and provide recommendations based on their findings.

Business knowledge: With technology automating bookkeeping tasks, accountants need to focus on higher-value tasks. Understanding business operations and collaborating effectively with other teams are essential. This knowledge helps accountants provide strategic advice and support business growth.

Soft skills

1. Attention to Detail: Accuracy is critical in accounting. Accountants must meticulously review financial records and reports to identify and correct any errors.
2. Analytical Thinking: Accountants need strong analytical skills to assess financial information, identify issues, and develop effective solutions. This skill is vital for tasks such as budgeting, forecasting, and financial analysis.
3. Communication Skills: Effective communication is key for accountants, especially when explaining complex financial information to non-financial stakeholders. They must be able to present their findings clearly and concisely.
4. Problem-Solving Abilities: Accountants often encounter financial discrepancies and challenges that require innovative solutions. Strong problem-solving skills enable them to address issues efficiently and effectively.
5. Time Management: Managing multiple tasks and deadlines is a common part of an accountant’s role. Good time management skills help accountants prioritize their work and meet critical deadlines.

Are Accounting Jobs In Demand?

The demand for accountants remains strong, driven by their essential role in ensuring financial accuracy and compliance in businesses of all sizes. According to the U.S. Bureau of Labor Statistics (BLS), employment of accountants and auditors is projected to grow 4% from 2022 to 2032, matching the average growth rate for all occupations. This growth is primarily due to the increasing complexity of the regulatory environment and the need for organizations to comply with evolving financial laws and standards. Additionally, the global shortage of accountants has significantly increased the demand for accountants. 

Factors driving demand for accountants:

1. Regulatory changes: With ongoing changes in tax laws, financial regulations, and accounting standards, businesses need skilled accountants to navigate these complexities and ensure compliance. For example, the introduction of new tax codes or updates to GAAP can significantly impact a company’s financial practices, requiring knowledgeable accountants to manage these changes.
2. Economic growth: As the economy grows, so does the need for accountants. As businesses scale and new companies are established, financial transactions become increasingly complex. Accountants are required for managing growth, handling increased financial reporting and advising on investment strategies.
3. Technological advancements: The rise of financial technologies (FinTech) and automation tools has transformed the accounting profession. As routine accounting tasks are automated, accountants are now required to interpret data, provide strategic advice, and oversee financial systems. This shift requires accountants to be tech-savvy and continually update their skills.

Accountants have diverse career opportunities across various industries, including public accounting firms, corporate finance departments, government agencies, and non-profit organizations. The versatility of the accounting profession means that accountants can specialize in areas such as forensic accounting, management accounting, auditing, and tax accounting. Moreover, the increasing globalization of businesses and the expansion of multinational corporations have created a demand for accountants with expertise in international finance and accounting standards.

Role of AI in transforming the accounting profession

One of the most significant changes in the accounting field is the integration of artificial intelligence (AI). AI is revolutionizing how accountants work by automating routine tasks, enhancing accuracy, and providing deeper insights through advanced data analytics. Some ways in which AI is transforming accounting include:

• Automating repetitive tasks: AI and machine learning algorithms can automate repetitive tasks such as data entry, invoice processing, and transaction categorization. This not only reduces the time spent on these tasks but also minimizes human errors, allowing accountants to focus on more strategic activities.
• Enhancing data analysis: AI tools can analyze vast amounts of financial data quickly and accurately. They can identify patterns, detect anomalies, and generate insights that would be difficult and time-consuming for humans to uncover. This capability enables accountants to make more informed decisions and provide better financial advice to their clients.
• Predictive analytics: AI-driven predictive analytics can forecast financial trends and outcomes based on historical data. This allows businesses to plan more effectively, manage risks, and seize opportunities. Accountants can use these insights to advise on financial strategies and improve organizational performance.
• Fraud detection: AI systems can continuously monitor financial transactions for unusual activity, flagging potential fraud in real-time. This proactive approach to fraud detection enhances the security of financial systems and ensures compliance with regulatory requirements. By leveraging AI, accountants can better protect their organizations from financial crimes.
• Improved client servicing: AI-powered chatbots and virtual assistants can handle routine client inquiries, schedule appointments, and provide basic financial information. This improves client service and frees up accountants to focus on more complex client needs and relationship building.

The accounting profession is evolving rapidly with the advent of AI technologies. These advancements are not only enhancing the efficiency and accuracy of accounting tasks but also expanding the strategic role of accountants in business decision-making. As AI continues to develop, it will undoubtedly open new opportunities and challenges for the accounting profession, making it an exciting field for current and future accountants.

About HighRadius: Record to Report Suite

HighRadius offers a cloud-based Record to Report Suite that helps accounting professionals streamline and automate the financial close process for businesses. We have helped accounting teams from around the globe with month-end closing, reconciliations, journal entry management, intercompany accounting, and financial reporting.

Our Financial Close Module is designed to create detailed month-end close plans with specific close tasks that can be assigned to various accounting professionals, reducing the month-end close time by 30%. The workspace is connected and allows users to assign and track tasks for each close task category for input, review, and approval with the stakeholders. It allows users to extract and ingest data automatically, and use formulas on the data to process and transform it. 

Our Account Reconciliation Module provides an out-of-the-box formula set that can configure matching rules and match line-level transactions from multiple data sources and create templates to automate various transaction processing required for month-end close. Our solution has the ability to record transactions, which will be automatically posted into the ERP, automating 70% of your account reconciliation process. 

Our AI-powered Anomaly Management Module helps accounting professionals identify and rectify potential ‘Errors and Omissions’ on a daily basis so that precious resources are not wasted during month close. It automates the feedback loop for improved anomaly detection and reduction of false positives over time. We empower accounting teams to work more efficiently, accurately, and collaboratively, enabling them to add greater value to their organizations’ accounting processes.

FAQs

1) How much do accountants make?

Accountants’ salaries vary by location and experience, but in the U.S., the median annual wage for accountants and auditors was $79,880 in 2023. Senior roles and specialized fields can earn significantly more, with potential salaries exceeding $120,000 annually, especially in major cities and large firms.

2) How to become an accountant?

To become an accountant, earn a bachelor’s degree in accounting or a related field. Many pursue additional certifications like Certified Public Accountant (CPA) for better job prospects. The process includes passing exams and gaining work experience. Continuing education is essential for staying current with industry standards.

3) How long does it take to become an accountant?

Becoming an accountant typically takes about 4-6 years. This includes earning a bachelor’s degree (4 years) and gaining certification like CPA, which requires additional study and passing exams. Some may need extra time for work experience required for certification, making the total duration variable but often within this range.

4) What degree do you need to be an accountant?

To become an accountant, you generally need a bachelor’s degree in accounting or a closely related field such as finance or business administration. Some positions, especially higher-level ones, might require further qualifications like a master’s degree or professional certifications such as CPA, CMA, or ACCA.

5) Why are accountants important?

Accountants ensure accuracy in financial records, compliance with laws, and strategic financial planning. Accountants help in decision-making by providing insights into financial performance, identifying cost-saving opportunities, and ensuring efficient resource allocation.

6) What is the job role of an accountant?

The job role of an accountant includes recording financial transactions, preparing financial statements, budgeting, and forecasting. They ensure tax compliance, conduct audits, and provide strategic financial advice. Accountants play a key role in analyzing financial data, detecting fraud, and advising on financial planning.