If you enjoy numbers and you’re good at math, becoming an accountant might make sense for you. However, you might be asking, what does an accountant do?
This job title might seem rather straightforward. You probably think an accountant crunches numbers all day long. While this might be partially true, there’s more to the job than just operating a calculator or using accounting software all day long.
Crunching numbers is a part of the job as accountants certainly work with financial data. However, they also do so much more. Let’s look at what an accountant is, what they do, and the different types of accountants.
What is an Accountant?
Before you discover what an accountant does, it’s important to know what an accountant is. An accountant is a financial professional that helps to keep and interpret financial records. It’s common for an accountant to handle filling out tax forms, keeping track of the budget, and much more.
Sometimes, the job title of a bookkeeper is interchanged with an accountant. While these jobs may have similarities, they are rather different. Bookkeepers don’t require as much education and they focus on recording financial transactions.
An accountant, on the other hand, will need more education. They are tasked with interpreting the financial information, not just recording it. While an accountant can be a bookkeeper, a bookkeeper cannot be an accountant.
Job Duties of an Accountant
As an accountant, your job duties can vary, depending on who you work for and your actual position. It’s common to do the following:
- Maintain accurate financial documents that comply with any regulations or laws relevant to the company
- Prepare financial reports
- Prepare tax returns and pay necessary taxes on time
- Evaluate the financial operations of a company and make recommendations to ensure the organization runs smoothly
- Provide guidance and advice on revenue-boosting and cost reduction solutions
- Offer risk analysis assessments and forecasting for the company
Accountants have a legal obligation to act honestly within their practices. They must avoid negligence and they are responsible for the compliance of their clients’ financial records.
Different Types of Accountants
1. Certified Public Accountant (CPA)
The most common type of accountant is a CPA. This type of accountant has passed the Uniform CPA Examination, which consists of four sections:
- Auditing and Attestation
- Business Environment and Concepts
- Financial Accounting and Reporting
This exam will also cover the fundamentals of accounting. Along with passing the exam, a CPA will have a four-year degree in accounting and one to three years of professional work experience.
Typically, a CPA will work with individuals and businesses. They will help clients follow the generally accepted accounting principles from the Financial Accounting Standards Board (FASB). Most CPAs will handle public accounting or corporate accounting. They will take care of tax preparation, financial planning, audits, and many other tasks for their clients.
2. Chartered Accountant (CA)
Another type of accountant similar to a CPA, a chartered accountant is an international accountant working in more countries than just the United States. you will likely focus on one of four areas:
- Financial accounting and reporting
- Management accounting
- Applied finance
3. Financial Advisor
While a financial advisor doesn’t necessarily have to be an accountant, it’s helpful. As an accountant in this position, you will help clients with their financial decisions. This may include investments, tax strategies, savings, budgeting, insurance, and more.
You will likely need a four-year degree for this position. Financial advisors also have to pass exams from the Financial Industry Regulatory Authority (FINRA).
4. Tax Examiner
A tax examiner is a type of accountant that reviews tax returns for businesses and individuals. You will check on the accuracy of a tax return and make sure it adheres to the tax code for clients. It’s possible to work for the federal, state, or local governments as a tax examiner.
Someone that examines financial records to ensure they are accurate and comply with regulations and tax laws is an auditor. You will either be an internal or an external auditor. If you become an internal auditor, you will work for a company and examine its finances from the inside. An external auditor will work independently and audit a company from the outside.
Both types of auditors work with public and private companies. They are commonly a part of a team or the accounting department.
6. Forensic Accountant
If you want to carefully analyze and interpret financial records, becoming a forensic accountant might be for you. This type of accountant will likely work for an insurance company, government agency, bank, or public accounting firm. It’s common for forensic accountants to provide expert evidence during trials.
7. Project Accountant
As a project accountant, your focus will be on the delivery, tracking, analyzing, and reporting of the financial results of a project. you will report to management when it comes to a project being over or under budget. It’s also common to draft proposals for projects and provide information on the potential cost or earnings.
Most project accountants work closely with project managers. They work for construction companies and engineering firms, commonly.
8. Management Accountant
As a management accountant, you will work with companies on budgeting. Your job will include helping to identify ways they can improve their company financially. This might include creating budgets, forecasting cash flows, analyzing the rate of return for projects, and other tasks.
It’s common for a management accountant to provide advice for senior management within a company. They might also oversee a team of entry-level accountants that handle the bookkeeping and other duties. You will need a four-year degree for this position.
9. Investment Accountant
Those working at an asset management firm or brokerage to maintain investments for clients are known as investment accountants. you will likely work with brokers and asset managers to provide financial advice. It’s common for this type of accountant to provide advice about financial strategies and prepare tax reports for investment accounts.
You will need a bachelor’s degree for this job and a good knowledge of the state and federal regulations about investments.
10. Government Accountant
As a government accountant, you will work for the local, state, or federal government. This position will likely have you managing public funds, performing system audits, and investigating white-collar crimes. You will need to know the government statutes, along with business codes and tax laws.
Government accountants may help with city budget funds and help to evaluate projects based on public funds. They may also work with the Internal Revenue Service. This type of position will require that you become a CPA or get an MBA.
Frequently Asked Questions About Accountants
How much can I make as an accountant?
The average salary for an accountant, according to Indeed.com, is about $56K per year. With some experience, this can be higher. Many employers also pay higher salaries for accountants including government agencies and insurance companies.
Some locations pay a higher-than-average salary, as well. New York City, Dallas, Los Angeles, and Denver all pay above the national average for accountants. If you work in any of these areas, you can expect to earn a higher salary.
If you become a CPA, the average salary will likely go up a few thousand dollars per year. You can also earn more by getting promoted to a higher accountant position.
According to U.S. News, the salary range for accountants goes from about $56K to $94K.
Do accountants get employee benefits?
Yes, when you work for an employer, you will likely gain access to many benefits including health insurance and a 401(k) retirement account. It’s also common to get paid time off, tuition reimbursement, life insurance, vision insurance, and dental insurance. Some employers will provide relocation assistance, as well.
What is the work environment like for accountants?
Most accountants work in an office environment. They will spend most of their time in front of a computer working with numbers.
How many hours will I work if I become an accountant?
Accountants typically work a full-time week with regular business hours. However, during the tax season (February through April) they may work overtime.
Can I work from home as an accountant?
Yes, many accountants now work from home. It’s common for accountants to work remotely since they can get all the work they need to do, done on a computer connected to the internet.
How long will it take me to become an accountant?
As an entry-level accountant, you will need a four-year degree. However, most accountants go on to get a master’s degree, which will take another one or two years. If you want to become a CPA, you will also need to gain some work experience.
Are accountant jobs becoming more in-demand?
Yes, the job of an accountant is growing by about 6%. It’s expected to continue to grow over the next decade. This is slightly above the average of the growth of all occupations.
Now that you know what an accountant does, this might be the career path for you. It will likely require time in college. Make sure you choose the right degree for your specific career goals.