Career Explainer: What Does an Accountant Do?

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They perform various business functions such as the preparation of financial reports, payroll and cash management. An accountant in a small business manages a wide range of financial tasks, including bookkeeping, payroll processing, tax preparation and filing, regulatory compliance, and financial reporting. They also provide strategic financial advice to help the business grow and become more profitable. Certification requirements vary, with some roles requiring additional educational requirements above the bachelor’s degree and successful completion of rigorous examinations.

Its use in organizing business transactions and meeting regulatory requirements makes it a field that requires extensive knowledge and study. As such, accountants make strong salaries and work in a variety of industries. The Alliance for Responsible Professional Licensing (ARPL) was formed in August 2019 in response to a series of state deregulatory proposals making the requirements to become a CPA more lenient.

Implementing accounting automation can allow accountants to streamline their workflows and become more effective. With these emerging technologies, labor-intensive tasks like tax preparation, payroll, and audits can be automated to reduce the amount of time and resources needed to move forward. Collecting and analyzing financial data is a large part of accounting and is an important aspect of identifying patterns and potential issues.

Table of Contents

1. Accountants need a range of skills, including attention to detail, analytical skills, proficiency with financial software, and strong communication skills.
2. However, accounting plays a key role in the strategic planning, growth, and compliance requirements of a company.
3. The formation of the institute occurred in large part due to the Industrial Revolution.
4. Several other terms are often discussed in conjunction with the phrase “accountant,” which can lead to confusion on what this career actually entails.

Here, we’ll discuss the daily tasks, roles and responsibilities, important skills, and career outlook for accountants, as well as the trends impacting the field. Accounting is a back-office function where employees may not directly interface with customers, product developers, or manufacturing. However, accounting plays a key role in the strategic planning, growth, and compliance requirements of a company. Because of the simplified manner of accounting, the cash method is often used by small businesses or entities that are not required to use the accrual method of accounting. These four largest accounting firms (Ernst & Young, KPMG, PricewaterhouseCoopers, Deloitte) conduct audit, consulting, tax advisory, and other services. These firms, along with many other smaller firms, comprise the public accounting realm that generally advises financial and tax accounting.

Essential Skills

You can often get an entry-level job in accounting out of college, but many higher-level (and higher-paying) accounting jobs require a CPA license. Accountants handle a company’s financial records, analyzing data to verify businesses are following financial laws and efficient practices. Automated accounting software, such as QuickBooks and other popular applications, are becoming increasingly influential in the industry. In fact, a recent survey found that bookkeepers and accountants spend roughly 86 percent of their time on tasks that have the potential to be automated. However, there are other career options worth considering beyond a Certified Public Accountant. The industry is filled with a wide range of in-demand finance and accounting careers.

For one thing, the cost of hiring someone like this can be a substantial burden on your business’s finances. This focuses on the use and interpretation of financial information to make sound business decisions. It’s similar to financial accounting, but this time, it’s reserved for internal use, and financial statements are how are my state taxes spent made more frequently to evaluate and interpret financial performance.

Skills and Qualifications of an Accountant

Ernst & Young’s EY Career Path Accelerator Program provides courses to help people entering the field reach the 150 credit hours needed for the CPA exam. By 2031, employment of accountants and auditors is expected to grow 6%, and there will be more than 135,000 job openings in the field each year, according to the U.S. Aspiring accountants can look forward to more career opportunities in the coming years. The number of accountants and auditors is expected to increase by 6 percent between 2021 and 2031, according to the Bureau of Labor Statistics. To learn more about this, and other bachelor’s degree programs that can propel your accounting career, explore our program pages. Today, accountants and CPAs are performing tasks that require analytical skills at increasing rates, largely due to the proliferation of data across industries.

An accountant may choose to pursue a certification, of which the most prestigious is the certified public accountant (CPA) designation. A CPA license is required before a person can audit the books of a client organization. Another option is the certified management accountant (CMA) designation, which is targeted at improving the management accounting and financial accounting skills of accountants. The Certified Internal Auditor (CIA) designation is intended for those who work on auditing tasks within a business.

Which of these is most important for your financial advisor to have?

Incoming professionals must then work at least two years in an entry-level accounting role, such as payroll assistant or bookkeeper. While not every accounting professional requires auditing skills, it can be a useful skill since it ensures financial data is accurately depicted in accordance with modern accounting standards. While common skills are important to an accountant’s professional success, specialized skills ensure they are highly effective in the field. According to data pulled from active job postings, here are the top specialized skills employers are looking for in accounting professionals.

Because accounting is a communications and people business, Barentzen says many roles are annual program reporting cycle dates more likely to be hybrid than fully remote. For example, Heller says his accounting employees work fully in-office, but a fully or mostly distributed company may hire fully remote accountants. As an accountant, you can take many different paths and change direction along the way. Accountants can work for large or small accounting firms, in the private sector at companies across industries, at nonprofits, or within government agencies. You can even start your own private practice or use your skills to start a non-accounting business as an entrepreneur.

An accountant assists with decision-making by providing well-analyzed financial data, identifying trends, and forecasting future financial scenarios. This information is invaluable when making strategic business decisions such as expansion, investment, or cost-cutting. There are various types of accountants, including public accountants, management accountants, government accountants, forensic accountants, and auditors, each serving different needs. Government accountants maintain and examine records of government agencies and audit private businesses or individuals for compliance with government regulations. There are 671,855 certified public accountants in the U.S. as of August 2024, according to the National Association of State Boards of Accountancy. There are many sub-fields within accounting in which a person can specialize.

These rules are outlined by GAAP and IFRS, are required by public companies, and are mainly used by larger companies. Analysts, managers, business owners, and accountants use this information to determine what their products should cost. In cost accounting, money is cast as an economic factor in production, whereas in financial accounting, money is considered to be a measure of a company’s economic performance. The rise of technology and automation is changing the landscape of accounting. While some basic tasks can be automated, this shift allows accountants to focus more on strategic roles, such as analysis, advisory services, and decision-making support. As a result, accountants will need to adapt, enhancing their technical skills and focusing more on value-added services.

Using Accounting Software

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The ARPL is a coalition of various advanced professional groups including engineers, accountants, and architects. Accounting history dates back to ancient civilizations in Mesopotamia, Egypt, and Babylon. For example, during the Roman Empire, the government had detailed records of its finances. However, modern accounting as a profession has only been around since the early 19th century.