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What Is a Financial Accountant?

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What Is a Financial Accountant?

A financial accountant works with organisations to help prepare their statutory reports, tax returns and accountancy statements. The work can include analysing figures, making recommendations, assessing risks and opportunities and advising where matters of company or charity law apply.

Some companies hire in-house accountants to manage their financial affairs. In contrast, others will contract an accountancy practice when they need to submit tax returns, accounting statements or produce stakeholder reports.

An accountant must hold appropriate qualifications and know the relevant reporting standards to provide these services.

What Does a Financial Accountant Do?

There are multiple fields within accountancy. A financial accountant is primarily concerned with tracking and reporting the performance of an organisation, preparing or verifying:

  • Profit and loss statements
  • Balance sheets
  • Cash flow statements

Each report must comply with Generally Accepted Accounting Principles (GAAP), used across the sector to determine factors such as how the organisation accounts for depreciation and when they need to recognise an accrued liability.

Trained accountancy professionals can check that organisational activities comply with legal regulations, suggest schemes or tax incentives that would be beneficial, and support clients experiencing financial difficulties, so the job of a financial accountant isn't limited to preparing or analysing reports.

Financial Accountant Qualifications

When you hire a financial accountant, you need to be confident that they have the skills, qualifications and knowledge to deliver sound advice.

Accountants can follow several different routes, depending on their intended area of specialisation.

Some accountants begin their education with a degree in accountancy, often working in junior bookkeeping roles while pursuing a BSc in Accounting to support their professional development requirements.

Degrees in accountancy have varying curriculums but usually cover:

  • Management and financial accounting
  • Tax accounting and auditing
  • Accounting IT systems
  • Organisational behaviour

Multiple professional bodies offer training routes.

The designation AAT (Association of Accounting Technicians) is the minimum qualification level usually accepted.

To reach chartered status, a professional will need to study for further accreditation, usually through one of the following bodies:

  • ACCA (Association of Chartered Certified Accountants)
  • ACA (Associate Chartered Accountant)
  • CIMA (Chartered Institute of Management Accountants)

Different Types of Accountants

Financial accounting is how most people perceive the role of an accountant, but other potential career paths require similar qualifications.

Audit Accountants

Audit accountants work as external service providers, auditing the annual accounts of larger companies to deliver an opinion on whether the reports represent a true and fair view and comply with current financial standards.

Management Accountants

Management accountants provide similar services to financial accountants, although their focus is on internal information reporting and analysing the organisation's ongoing financial position. Management accounts are produced monthly, quarterly or biannually and circulated to stakeholders and directors.

A business may employ a full-time management accountant to track performance and spot potential issues or work with an external management accountant to ensure they make informed financial decisions.

Tax Accountants

Tax accountants support companies that need to file tax returns - that could relate to VAT, Corporation Tax, Income Tax for self-employed directors, PAYE liabilities, Capital Gains Tax and any other applicable taxation.

This type of accountant will advise which taxes are payable and why, recommending the optimal way to account for a transaction or event to ensure it is tax efficient and compliant with the HMRC regulations.

Tax regulations change quickly, so a tax accountant is particularly beneficial for organisations with complex structures, international locations or operating in import and export.

Forensic Accountants

Forensic accountants act as detectives, tracing accounting transactions and unpicking the facts and figures that underlie a document, report or trading activity.

Although forensic accountants are typically involved in internal audits or government accountancy functions, they also work in insolvency.

They may be instructed to investigate potential instances of fraud or misleading accounting, uncover an audit trail of linked transactions, or determine the cause of a business collapse to determine whether directors have acted appropriately.

Benefits of Working With a Financial Accountant

One of the core advantages of working with a financial accountant is access to professional advice and guidance. However, many businesses hire financial accountants solely to assist with preparing and submitting their statutory filings.

An accountant isn't purely tasked with satisfying mandatory standards or ensuring tax liabilities are up to date but can be a hugely important asset to organisational management.

Advantages include:

  • Time savings: monitoring trading performance, analysing metrics and deciding how to move forward can take a substantial amount of time, focus and expertise. Most business owners cannot commit a large proportion of their time to accountancy functions. A financial accountant will ensure the right reports have been filed on time, forms completed correctly and retain oversight to advise when a possible opportunity or problem arises.
  • Cost savings: while an accountant will charge fees based on their time, they can save an organisation a significant amount of money. Examples include preventing a company from missing a tax filing deadline, keeping procedures updated with changing legislation and minimising tax obligations by advising where the organisation qualifies for tax reliefs or other schemes.
  • Business growth: accredited accountants have experience in company law, organisational structures, analysing performance trends and the intricacies of the finances that sit behind them. An accountant gets to know a business inside out, providing impartial advice and helping management make sound judgements to support ongoing company success.

Working with an accountant can help businesses to identify and fix issues before they become a financial challenge and compare possible financial products or borrowing structures so that the company makes good decisions.

Finally, a financial accountant can relieve a lot of stress and worry, as many organisations find finances and reporting daunting.

Even where the company does not need to file complex returns or has a fairly straightforward structure, the pressure of filing multiple returns and statements within varying deadlines can be stressful.

A professional financial accountant ensures that the organisation will not forget to submit an important report, keeps on top of its obligations, files verified financial statements with Companies House, and has greater control over its operations with advance knowledge of any forthcoming legislative changes.


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