The Accounting Profession
Most people think that if you are an accountant then you must be a math genius. You must be able to calculate any number in your head. You must take years of math. They couldn’t be more wrong.
Accounting is not just about adding numbers all day. Accounting is a profession of communication.
When an accountant comes on the scene, communication between the financial world and employees and stockholders occur. Their job is to take all the ins and outs of the money, the various categories, and the goals of the company and put into a form that can be understood while keeping within the bounds of the law and ethics.
When I was in college advancing toward my accounting degree, many people around me just assumed that I was a math genius. I wasn’t horrible in math, but genius I was not. I couldn’t get everyone to understand that accounting went beyond adding and subtracting. I only had to take the basic math classes that everyone else had to. The rest of my education was learning how to communicate the results of all that adding and subtracting to other people. I had to learn how formalize it.
An accountant’s job is to take the deposits and expenditures and place them in the appropriate categories. Many would ask why are the categories important as long as the final balance in the checking account is correct. There happens to be several reasons for this.
Purpose of Accounting
1) Fraud – If only the ending balance is looked at and validated, then anyone could remove or even add money through illegal and unethical means. The job of the accountant is to verify that all transactions are correct.
2) Reporting – Various agencies such as the Internal Revenue Service (IRS) require some transactions reported under particular categories. This is done mostly for correct tax deductions and benefits. The company or individual needs to be sure that they are deducting the correct transactions. Categorizing them, or filing them, helps keep it all straight.
3) Accurate Financial Standing – When the accountant finishes the financial reports, anyone could look at the report(s) and see how well the company is doing. This communication is great for anyone seeking to invest in the company, loan them money, or even work for them. Smart and successful financial ventures are only accomplished after trust is established between the various parties.
An accountant’s day involves reviewing the income and the expenditures to ensure accuracies. Did the transaction really happen? Was it put in the correct categories? Is it being handled legally and ethically? What is the impact of this transaction? Does it mean the generally accepted accounting principles (GAAP)? At first these seem like easy questions, and most of the time they are. But every now and then a transaction will occur that is not as “normal” as all the others. When that occurs the transaction is scrutinized more closely than all the others. The accountant might even have to reference official manuals or seek guidance from a certified public accountant (CPA). Everything should be entirely legal and ethical.
More to it than Bean Counting
At every one of the companies that I have worked for as an accountant, everyone outside the accounting department gets extremely frustrated with us. They always got angry when we questioned transactions more deeply or when we did not put in the categories that they wanted them in so that their particular department might look better. What we could rarely get them to understand was that we were bound by law to have the reports accurate. We were not doing all this out of meanness. We were following laws that were created for very good reasons.
The accountant’s life could be looked at as boring by some. It is no question a desk job. Computers are required. Concentration is a must. But surprisingly there is quite a bit of variety for those who wish to be a “bean counter”.
Standard accountant (General Ledger accountant) – The standard accountant’s job is verifying transactions and creating the timely financial reports that are needed by those inside and outside the company.
Auditor – This career in accounting is one most associated with the IRS. Their job is to take already prepared statements and transactions to ensure legal reporting. Though they are usually viewed with hatred and dread, it is the auditor that finds fraud and helps put many criminals behind bars.
Inventory accountant – This person is responsible for reporting all inventory for a company. Are all assets accounted for? Are the valued correctly? The size of this job varies on the type of company and what they hold as inventory items.
Financial analyst – This accountant takes the transactions and “slices and dices” them. They look at percentages. They look at per person or per order cost and revenue. They get into the depths of the financials to help decision makers up top or externally.
Budgeting accountant – This position requires the accountant to take historical data and the plans for the future and tries to present a true plan for the upcoming year/period.
Tax accountant – This accountant verifies that transactions are categorized correctly for tax reporting purposes and that the taxes are files properly. They need to be familiar with the tax laws which is why they are highly specialized. The laws are many and constantly changing.
These are just highlights of the accounting world. You could be an accounting clerk who enters the daily transactions. You could be a CFO leading the financial decisions of a large company. You could be the treasurer managing the banking accounts and investments. You could be a consultant helping companies with hard decisions. The world of accounting is much broader than you could imagine.
To obtain a degree in accounting, you can look at most any college or university. Most undergraduate degrees are BBA’s (Bachelor of Business Administration) with a concentration in accounting. The basic degree is four years though there is an option to get a five year degree if you plan on advancing to be a certified public accountant. The requirement for the certification is a five year degree at an accredited college. If you are a CPA, you can expect to receive higher pay but don’t let be the driving force for obtaining it. The test is not a cake walk and in some areas of the country does no good in getting a good job unless you want to work for a CPA firm. Look at what is being sought for where you live to decide your future career path.
It might also be wise to work part-time before committing to an accounting degree. Many students decide toward the end of their education that accounting is not for them. If you really want to see if you are accountant material, intern or work closely with someone you know that is an accountant.
Salary for an accountant is not bad. Very good livable wages can be obtained as an accountant and can vary from area to area. When I lived in Nashville, you would be lucky to get $30k with several years of experience and as a CPA. I moved to Milwaukee and quickly obtained a job with only 3 years of accounting experience and no CPA. Starting pay was $35k. I quickly went up to $54k in 7 years at the same company. To see how much accounting pays in your area touch base with the local colleges and temp agencies. They are a good resource.
I have been an accountant for 17 years. At times I love my job. At others I despise it. There are some people whose passion is accounting. Others approach haphazardly. Though I have worked as high as assistant controller, I don’t wish to be an accountant all of my days. My passions lie in teaching which I have been able to bring into the accounting world. In my last two jobs I have created training courses to help educate the rest of the company on how the finance world works and the importance of it in their own work lives. I’ve been able to merge my career and education with my passion.
Don’t let the stereotype of a bean counter prevent you from looking into the accounting profession. It can be a fulfilling occupation.