May 2018 is Accounting Day, a chance for the exciting world of accounting and finance to attract new talent.
‘Doing the books’ may not be everyone’s idea of fun but accounting and accountancy involve people working in one of the most complex areas of business. With this in mind, take a fresh look at what accounting involves.
For too long, the world of accountancy and accountants has been portrayed as grey and boring which is somewhat surprising considering the importance of a knowledgeable person watching the cash flow, keeping an eye on the figures and keeping tax liability to a minimum.
Vital to the success of any business, no matter what size it is or what products or services it supplies, the world of accounting means accurate financial reporting, taxation, auditing, corporate finance, business recovery and insolvency in some cases too. Online accounting courses and qualifications can also lead into the murky world of fraud in the shape of forensic accounting.
Two main type of accountancy
In accounting, you can choose to specialise and thus, understanding the two broad bases of accountancy is the first step;
- Management accountants are responsible for providing internal financial information to aid management decisions. You may analyse budgets and financial forecasts. The emphasis of an accountancy role of this kind is forward planning and achieving financial goals.
- Financial accountants provide financial information externally to stakeholders, investors and creditors. They summarise the company’s current position, reporting on profits and losses, liquidity and solvency – the act of financially running a business in line with the law. In fact, this type of accountancy is legally required and could see you work in specialist fields, sometimes known as public practice, such as;
I. Audit, assurance and advisory roles
This is a form of inspecting or checking a company’s or organisation’s financial reports for accuracy.
An audit or ‘being audited’ is a common phrase in business. It is not so much a one-off, occasional activity but one that is ongoing. For all businesses, including public bodies, charities, educational facilities and so on are subject to being checked financially. In other words, you will need up to date knowledge of complex financial laws and whether the body being audited is complying with these.
In an advisory role, you would look at the financial implications of expansions, mergers or investments that a company or organisation makes.
II. Business recovery and insolvency specialist
In the UK, the recent recession and austerity measures have hit businesses hard with well-known high street names, mostly recently Maplin and Toy R Us, ‘going to the wall’. This means that the value of their debts outstrips assets, creating an insolvent trading position.
Once in receivership, the business recovery and insolvency specialists will take over the running of the company. They will try to sell as much stock and chattels as possible to recoup as much money as possible to pay the company debts. After this, they wind it up and the business will no longer trade.
For some businesses under financial strain, you would reorganise their finances and investments as part of your business recovery expertise.
III. Corporate finance and risk management
Online accounting courses also look at how a business financially plans for the future. From investing in assets to managing financial risks, specialist accountants will be the driving force behind all of these important activities.
Investments need to be made in line with financial laws, notoriously complex but also within legal tax boundaries too.
IV. Forensic accounting
Fraud happens. It can be a complicated trail of phoney accounts and transactions which, on the surface, look legitimate. But probe below the surface and a forensic accountant can uncover a fraud, the tentacles of which expand far and wide.
Do you have the ability to be a financial detective, analysing financial information, tracing trails and uncovering the tracks of who is involved in such complex crimes?
Many see tax as a moral and ethical issue for businesses. Big names have come under closer scrutiny in recent years for the tax avoidance schemes they invest in, effectively denying the country’s coffers of millions of pounds. Although not illegal, many questions how ethical tax avoidance schemes are.
And yet, no business wants to pay more tax, effectively giving away its profits, than it needs to. As a tax specialist, you would work within the tax laws of the UK, notoriously complex, but with a view to minimising tax liabilities.
Accountancy never deserved the grey reputation it once had. Increasingly, it is seen as a fantastic career move, a role that offers diversity and challenge. Why not study online accountancy courses and see where they take you?