What is Accounting?

Accounting careers can be extremely rewarding for anyone with a financial interest. It's a field that can allow for rapid growth and development, with a wide range of jobs available at varying levels of seniority. There are several requirements to pursue a career in accounting. In this article, we discuss what accounting is, the many roles of accountants, how to become an accountant, and five possible accounting positions to consider.

What is Accounting?

Accounting is a system of recording, organizing, and understanding the financial information for a business. Accounting tells you the current value of your company's assets and liabilities, whether you're making a profit, which parts of your business are profitable, and what your cash flow is.

Accounting helps businesses determine their financial rights and tax obligations. Depending on the size of the company, maintaining accounting records and preparing financial statements can become a legal obligation. Accounting is also responsible for producing financial statements that allow business owners to assess the performance of their business and make sound investment decisions. Accounting also enables companies to successfully develop budgets and forecasting models that would allow them to plan and control deviations from the budget.

Potential Roles for Accountants

The following descriptions explain the various roles accountants can have in the workplace:

• Cost accountant
• Management accountant

• Tax accountant
• Public accountant
• Financial accountant
• Forensic accountant
• Internal auditor

• Project accountant
• Cost accountant

Cost accountants use financial tools to help organizations determine the true costs of products and services, maximizing profits and reducing costs. They provide financial information to managers to help them make good business decisions.

Management accountant

Management accountants are senior advisors who provide accurate and timely financial and non-financial information to managers and other decision-makers. They prepare weekly and monthly reports, participate in risk assessment and management activities, explain the financial implication of projects and help with formulating an organization's business strategy.

Tax accountant

Tax accountants provide tax-related services, including preparing tax returns, looking for strategies to minimize tax liability, and advising on tax compliance.

Public accountant

Public accountants often work as consultants in accounting firms. They provide a wide range of accounting services to individuals, businesses, and government departments.

Financial accountant

A financial accountant record summarizes, and reports on the financial transactions of a business. They prepare financial statements for business owners, shareholders, suppliers, and other key stakeholders to use for making decisions.

Forensic accountant

Accounting firms, government departments, insurance agencies, law enforcement agencies, and risk management consulting firms usually employ forensic accountants. They are responsible for investigating the accuracy of financial information and uncovering financial crimes, such as money laundering, fraud, and embezzlement.

Internal auditor

Internal auditors are responsible for evaluating and reporting on the efficiency of processes, procedures, and activities within an organization.

Project accountant

Project accountants are responsible for tracking the financial progress of projects. They prepare and manage budgets, report on the profitability of the project, and compile financial reports.

How to Become an Accountant

Follow these steps to become an accountant:

1. Pursue a bachelor's degree

2. Obtain experience

3. Consider an advanced degree

4. Consider licensure

1. Pursue a bachelor's degree

To become an accountant, you will need to obtain a bachelor's degree, preferably in accounting. However, there are broader degree programs, such as business administration, that offer specializations in accounting. Some of the courses you will need to complete include accounting, auditing, and tax accounting. You may also complete coursework in finance, marketing, or management.

2. Obtain experience

Consider pursuing an internship in an accounting department while you are pursuing your degree, as it will give you real-world applications for the knowledge you gain in the classroom. After graduation, look for entry-level accounting positions, such as accounting clerk roles or accounts payable specialist positions.

3. Consider an advanced degree

While a master's degree is not required to be an accountant, it can qualify you for more advanced accounting positions and more rapid career advancement. A master's program in accounting covers topics like auditing, finance, and taxation. It is also a common way to meet the 150 credit hour requirements for the Certified Public Accountant licensing examination.

4. Consider licensure

If you want to become a CPA, you will need to obtain a license. While this certificate is not required, many employers prefer hiring certified accountants. CPA licensure increases employment opportunities for candidates by strengthening their qualifications. The eligibility requirements can vary from state to state, but the exam itself consists of four, four-hour sections: auditing and attestation, business environment and concepts, financial accounting, and reporting and regulation. To obtain your license, you must pass all four sections within 18 months and have a minimum score of 75 on each part.

Types of Accounting Jobs

There are varieties of job options available for accounting professionals, including:

1. Senior accounts payable specialist

National Average Salary: $22.14 per hour

Primary Duties: A senior accounts payable specialist is responsible for making sure a business pays its bills. Their primary responsibilities include daily bookkeeping, financial reporting, record keeping, and preparing tax records for financial audits.

2. Accountant

National Average Salary: $54,558 per year

Primary Duties: Accountants are responsible for recording and analyzing financial records for companies and individuals. They prepare balance sheets and profit and loss statements; prepare, examine and analyze accounting records; calculate taxes owed, and prepare tax returns.

3. Tax accountant

National Average Salary: $61,434 per year

Primary Duties: A tax accountant is responsible for preparing tax returns, payments, and reports. They manage and maintain an organization's tax database and research solutions to difficult tax issues.

4. Certified public accountant

National Average Salary: $73,039 per year

Primary Duties: CPAs are responsible for supporting organizations and individuals with tax and financial statement planning. They organize and update accounting records; perform detailed audits regularly to ensure that financial documents, investments, and expenditures are accurate; and update accounting records as needed.

5. Chief financial officer

National Average Salary: $127,155 per year

Primary Duties: A CFO is a senior executive who is responsible for managing the financial decisions of an organization. Their primary duties include analyzing the business' financial strengths and weaknesses, tracking cash flow, and financial planning.

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