As simple as it sounds, many people are just unaware of what does accountant do.
Before we jump into that, know that the number of accountants in the U.S. grew by over 88,000 in just a year, from 1.45 million to 1.54 million. This means that many companies have already employed one, and you may need to catch up.
As a business owner, managing payroll taxes, profit margins, and financial projections can quickly become overwhelming. You might have been managing it yourself, only to realize you’ve been doing it incorrectly.
But don’t worry, accountant can spot savings you might miss, ensure you’re tax-compliant, and help you strategize for long-term growth all while saving you time and money.
Read along to know more about what does accountant do to help you make more informed decisions.
Read More: Outsourcing CFO Services for Strategic Growth
What is an Accountant?
An accountant is a financial expert from an accounting service firm who checks financial records to make sure the information is accurate for both businesses and individuals. They help keep finances in order and provide important insights that guide major business decisions.
Key Takeaways:
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Core Responsibilities of an Accountant
Accountants wear many hats, handling diverse tasks that range from basic bookkeeping to complex financial analysis.
Here’s a thorough overview:
Keeping a Log of Financial Transactions
Although various aspects of accounting can be incorporated into a few words, maintaining records of income accrued, expenditures incurred, and other transactions carried out is an accountant’s core responsibility.
Coordinating Accounts Preparation
Another key responsibility includes preparing financial statements like the balance sheet, income statement, cash flow statement, and so on. These documents provide a picture of the current status of the subject organization’s finances to all the parties involved, helping them carry out their functions efficiently.
Complying with Taxation Legislation
Tax compliance is one of the most important areas in which an accountant’s skills stand out. This helps individuals and organizations meet their obligations in regard to taxation and in the completion and submission of tax returns on time with accuracy.
Planning of Operations and Estimating Revenues and Expenditures
While accountants record the transactions that have occurred in the past, they do more than that through budgeting and forecasting. Through such means they help, for instance, in projecting changes in the financial scenarios in the coming periods.
Some other responsibilities include:
- Handle monthly, quarterly, and annual closings: They oversee the closing of financial periods, ensuring all accounts are balanced and financial statements are ready for review by stakeholders, auditors, or tax authorities.
- Reconcile accounts payable and receivable: Accountants verify that both incoming payments and outgoing bills match the financial records, preventing discrepancies and ensuring proper cash flow management.
- Ensure timely bank payments: Accountants make sure that all financial obligations, like vendor payments and payroll, are completed on time to avoid late fees or penalties.
- Report on the company’s financial health and liquidity: By analyzing financial data, accountants provide insights into the company’s financial position, helping management make informed decisions regarding investments and expenses.
- Audit financial transactions and documents: Regular audits by accountants ensure that all financial activities comply with regulations and are accurately reflected in company records, preventing fraud or mismanagement.
- Reinforce financial data confidentiality and conduct database backups when necessary: Accountants safeguard sensitive financial information, ensuring compliance with data protection laws, and perform regular backups to protect against data loss.
Read More: What’s the Real Difference Between Bookkeeping and Accounting?
What Does an Accountant Do for Small Businesses?
If you’re running a small business, saving money is likely at the top of your priorities. This is where an accountant steps in, managing bookkeeping services to keep track of your daily expenses, income, and other financial transactions—meaning no more misplaced receipts or missed payments.
By using tools like QuickBooks online, accountants ensure that your financial data is organized, accessible, and ready for quick insights.
They easily deal with state-specific tax regulations, guaranteeing compliance with all requirements. Plus, they’re skilled at spotting tax deductions you might miss on your own, maximizing your potential savings.
Check this out: Outsourcing Accounting for Small Businesses: A Smart Choice
How Much Money Does an Accountant Make?
According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for an accountant in the U.S. is $79,880 as of 2023. However, this figure can vary depending on factors such as the industry, location, experience level, and educational qualifications of the accountant.
Concluding Thought
Here’s something you might not know: Accountants don’t just help with taxes. They can guide you through incorporation services, helping you choose the best business structure to optimize tax savings and protect your assets from the start.
They can analyze your expenses and cash flow patterns to spot areas where you can cut costs or increase savings. With their help, you might discover tax deductions you weren’t aware of, like those for home office expenses, business travel, or certain equipment purchases, all of which can significantly reduce your tax bill.
Not working with one yet? You could be missing out on more savings and support than you realize.
Get in touch with Focus CPA today.
