From the small coffee shop on your street to the stock exchange in Sydney, accounting can be found everywhere in the modern world. Despite this, many of us would struggle to pin down exactly what an accountant does every day at work!
In this article, we'll take a look at what accounting really is, what a career in accountancy entails, and how you can get on your way to becoming an accountant yourself!
Look out for accounting teacher in this article.
It is a hard task to precisely define accounting when it covers such a wide scope of the financial and business world. However, we can still take a look at some official definitions and see what we can learn.
Financial Training Australia
"Accounting: The process of gathering and preparing financial information about a business or other
organisation in a form that provides accurate and useful records and enables decisions to be made."
"Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position and cash flows."
"The skill or activity of keeping records of the money a person or organization earns and spends."
What Can We Gather From These Definitions?
You can see that a pattern is obvious through all these definitions - Keeping, analysing, summarizing, and presenting financial records is a common theme. All of this in real terms would boil down to good organisation.
Aside from having excellent organisational skills, these definitions also tell us that accountants, unsurprisingly, need to have great numerical literacy in order to complete their responsibilities accurately and in a timely fashion.
If you want to learn more about accounting and start studying to become a Certified Public Accountant (CPA) yourself, you can explore your options for online accounting classes.
Defining Accounting Further
Accountants are an essential part of any company management team, but their work can easily go unnoticed in the day to day rush. Without them, the financial health of a business would suffer, and problems would be created in all areas from supply chain management to tax returns.
At a base level, accountants are expected to analyse financial records for trends or patterns and provide accurate and unbiased information on this to business management, or even government and other bodies.
This allows accountants to have work in many areas of interest, such as:
- Tax and Wages
- Corporate Finance
- Business Recovery and Insolvency
- Financial Reporting and Forecasting
Accountants, or CPAs, in Australia can choose to specialise in a certain area of accountancy, becoming what's known as a chartered accountant, after which you could choose to join the Chartered Accountants Australia & New Zealand Accounting Institute. Whatever you specialise in though, you will need to follow the rules, standards, and principles of accounting.
If you decide to get accredited and work as a certified public accountant in Australia, you can expect to take on some of the following daily responsibilities:
- The maintenance and management of financial records, utilising payroll and accounting software to stay organised
- Preparing for and completing financial audits - A look into a business's finance accounts and how effective current policies are
- Meeting with company management, investors, or independent clients as a freelancer to provide advice and insights into their finances
Click here to learn some accounting definition on Superprof.
Two Main Types of Accounting
When you study accounting either through a university or an accredited training course such as CPA Australia, you will discover that there are two main avenues of accountancy for you to take your career down.
These two principal areas of accountancy are financial accountancy and management accountancy. Let's take a closer look at what both of these mean, and what accountants in these areas of work will do on a daily basis.
In this area of the financial sector, accountants work within a particular company or business and provide information and advice on finances to management or CEO's of a company. The advice they give helps aid company management with their decision making; What policies to put in place to save on cash expenses or use funds to purchase goods, where to invest their money, or ways in which the budget of the business can be refined.
With this in mind, management accountants will perform many of the following tasks on a regular basis:
- Budget analysis and revision
- Analysis of financial records to produce predictions and forecasts of cost or expenses
- Internal auditing to determine the successes and failures of current financial policies
All of this is focused on providing future financial planning for a business.
On the other end of the spectrum, financial accountants work to provide financial information and advice to the external bodies of a company, like investors, a board of directors, shareholders, or trustees.
Rather than planning the future finances of the business, financial accountants look at a snapshot of a business's current state, delivering information such as profit margins, business stability and solvency, and the liquidity of the company. This type of accountancy is required by Australian law.
A lot of Australian graduates start their accounting career in financial accountancy, working with one of the three legally recognised public bodies of accounting in Australia: Institute of Public Accountants (IPA), CPA Australia, and Chartered Accountants Australia and New Zealand (CA).
A financial accountant's responsibilities will vary depending on your position and what you have specialised in, some of this will include:
- Forensic accounting
- Company recovery and insolvency
- Taxation and audits
- External business audits to provide advice to investors
What Positions are Available Throughout a Career in Accounting?
As you progress through your career in either management accountancy or financial accountancy, there are different positions you can hold of varying seniority which bring new responsibilities to your work.
Below we will take a look at some common positions that you will find in the world of accounting, maybe one of these titles sounds like your perfect job! Remember that in whichever job you hold, the companies you provide service to will require that follow the standards and principles of accounting.
As we've previously discussed, an accountant will maintain and analyse financial records for a company or business. They might look after the payroll and tax for staff in the company, or look after budgets and expenses. Accountants can specialise in many areas, from general accounting to tax.
People in this position are responsible for producing and maintaining financial records, using software and databases to organise this information and deliver reports to company management about cost and expenses projections, the balance of various company accounts, and provide a statement on the case of cash goods and assets the company owns.
See the accounting definition in business on Superprof.
Similar to an accountant, auditors all manage and analyse records of finance. Rather than working for one company though, auditors generally work in an accounting group or for a payroll service, like Xerox or MYOB in Australia, and will be looking over the work done by several companies' accountants to help with their finances.
Chief Financial Officer (CFO)
CFO's are senior members of an accounting team with an organisation. They are responsible for financial forecasts and planning, as well as maintaining financial records. They can delegate this work as they are also generally the manager of the organisations' accounting department. CFO's are in direct contact with the CEO of the organisation, making financial reports to them.
Controller or Comptroller
Working directly under the CFO of a company, the controller will prepare statements on finances and revise budgets. They may also organise the tax for the company, and input data to accounting software and databases.
Financial analyst can also be seen as advisors of sorts. They will analyse the financials of businesses, companies, goods, and assets to make an estimation of if something is worth investing in.
How to Get Started in Accounting
If you are considering getting involved with accounting yourself, and hope to start a career one day soon, it's important to know what is required to get started. Now we'll look at the skills you need to succeed in accounting, the best ways to progress your career through the ranks, and what qualifications you need to initially get started.
Recognise Your Skills and Improve Them
As we discussed at the start of this article, there are several key skills that you will need if you want to work as an accountant in Australia:
- Organisational skills
- Numerical Literacy
- Interpersonal Skills
These are all essential for obvious reasons; You need to keep financial records well maintained, you will be working with numbers every day, and you will likely be working within a team of other professional accountants.
Knowing this, you should be able to realise where you feel confident and where you might need to do some work before looking for a job. Turning up to an interview feeling confident and sure of yourself in these three areas will be a huge help to securing your dream position.
Mentioning these skills, and examples of how you have used them in previous work or study, on your resume will give you a better chance of success in interviews. If you have no previous experience in accounting, think of other ways your life experience can prove you have these skills.
Becoming a Certified Accountant in Australia
In Australia, there are a few ways in which you can become a certified accountant. Most obviously, you can take a bachelor degree in accounting, a three or four year course at university that will teach you everything you need to know to start practising as an accountant.
If you have already taken a bachelor degree in another subject, and don't want to start again at university with another 3 year course, you can find a master degree in accounting and complete this instead.
A quicker and cheaper option for those looking to start work quickly would be to take a CPA program. CPA (Certified Public Accountant) programs teach students how to be accountants, accredited CPA courses can be found from a few different training providers, most notably - CPA Australia.
Work Hard to Move Up Positions in Your Career
As you might expect, the first position you work in during your career in business accounting won't be your dream job. You will need to find somewhere that you can get familiar with the job and processes, and build your confidence in your role.
Starting at an entry-level position and aiming high can be daunting, so it's important that you take it one step at a time and appreciate the knowledge and experience you gain along the way.
By doing this you will ensure that you are fully prepared for each new role you take as you have mastered your previous position.
You can choose to learn on the job, doing internships or work experience placements to shadow more senior accountants, all of this can help you on your career path.
However you decide to get started in your career, you are sure to enjoy the many benefits that working in accounting brings once you have finished your studies.
The platform that connects tutors and students