In last months blog we looked at “What is a Bookkeeper?” and what tasks they typically undertake. This month we look at “What is an Accountant?” and how that differs from a Bookkeeper.
An accountant is a professional who has one of the most important roles in any business, whether they work in large corporations or small businesses. As the financial backbone of a business, they prepare and examine financial records, ensure all money transactions are accurate, and that taxes are paid on time.
Several other terms are often discussed in conjunction with the phrase “accountant,” which can lead to confusion on what this profession actually entails. For example, “accountant” and “bookkeeper” are phrases that are sometimes used interchangeably, yet there are several key differences between these job titles.
The bookkeeper brings the books to the trial balance stage, whereby you have a list of all general ledger accounts and details. From that information, the accountant prepares the profit and loss account and balance sheet. The latter sounds like the more complicated part of the process, but each role is just as vital for your business. It’s also where the idea of ‘balancing the books’ comes about, as the bookkeeper needs to ensure that the books quite literally balance – for every plus there is a minus across your accounts (debits and credits), and that’s the basis of bookkeeping!
Roles and Responsibilities
Although the daily duties of an accountant will vary by position and organization, some of the most common tasks and responsibilities of accountants include:
Ensuring the accuracy of financial documents, as well as their compliance with relevant laws and regulations
Preparing and maintaining important financial reports
Preparing tax returns and ensuring that taxes are paid properly and on time
Evaluating financial operations to recommend best practices, identify issues and strategize solutions, and help organizations run efficiently
Offering guidance on cost reduction, revenue enhancement, and profit maximization
Conducting forecasting and risk analysis assessments
Additionally, accountants have a legal obligation to act honestly and avoid negligence in their practices. As such, they are also responsible for ensuring that their clients’ financial records are compliant with the relevant laws and regulations.
All Accountants are regulated by either their governing body e.g ICAEW or CIMA or by HMRC for Anti Money Laundering regulations