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Do you think you are aware of everything you need to know about accounting? Are you interested to know more about what is accounting in a business?
If you have started pursuing a degree or diploma in accounting, you would have started learning and picking up the necessary skills and knowledge in order to eventually start a career in accounting. You may be looking to gain experience in the accounting industry.
However, if you are still a student, you might still be wondering what is next for you on this path to business accounting. You may wish to know what the profession entails and what will be expected of you by businesses, big and small.
Definition of Accounting
Accounting is a broad field. Therefore finding a definition that clearly explains every aspect of accounting is no easy task. Many authors, dictionaries and corporate thesauri have tried their best, and we have picked out the one we feel is the most accurate and well-rounded description of accounting by A. W. Johnson:
Accounting may be defined as the collection, compilation and systematic recording of business transactions in terms of money, the preparation of financial reports, the analysis and interpretation of these reports and the use of these reports for the information and guidance of management.
The are a number of keywords in the definition such as collection, compilation, preparation, analysis which gives a clear explanation about accounting. The main responsibilities of an accountant in general is to compile, analyse, verify and prepare financial records for the business organisation. In simple terms, accountants work with financial documents in order to ensure lawful and ethical business practices. If you are interested in more definitions of accounting, please read An Overview of Accounting.
Having good numeracy skills and an interest in accounting will be beneficial when it comes to entering the profession. If you are envisioning yourself helping organisations analyse profit margins and make good business decisions, pursuing a career in accounting is the right step for you.
What is Business Accounting?
Business accounting is how businesses gain understanding regarding their finances. Business accounting typically relies on substantial projections and modeling exercises to assist managers in making decisions and evaluating performance.
Role of an Accountant
Accountants play an important role in business and can be considered as the backbone of a business. Their duties range from book keeping to interpreting financial data for senior management. There are usually many accountants in big organisations because the are many areas in business that require accountants. However, if it is a very small business, then there will be at least one accountant to handle the responsibilities.
It is not just about reporting income and expenditure and doing payroll either, accountants in any sized business will use their accounting skills to compile financial reports, use statistics to enable them to forecast spending, and use existing data in their preparation of budgets and so on.
Their role is spread across many areas in the financial sector such as taxation, financial reporting, forensic accounting, corporate finance, auditing, business recovery and insolvency, or accounting systems and processes. Just keep in mind that all areas of accounting is governed by the generally accepted principles of accounting.
Some of the common tasks of a qualified accountant include:
- Preparation of financial reports
- Provide guidance on cost reduction, revenue enhancement, and profit maximisation
- Management of financial systems and budgets using spreadsheets and accounting programs like Xero
- Ensuring financial documents are in order and compliant to the regulations
Role of the Accounting Department
The essential role of an accounting department of a company is to keep track of the money coming in and going out. This includes keeping track of incoming payments for services or goods, paying the necessary bills, paying employees salaries. Furthermore, the accounting department prepares financial reports like budgets and balance sheet and is in charge of the financial controls to avoid fraud and theft.
There are a wide range of job functions within the accounting department such as:
- Bookkeeper
- Accountant
- Auditor
- Tax Accountant
- Forensic Accountant
- Chief Financial Office
Do you know what are the golden rules of accounting?
Considering Accounting as a Profession?
If you are thinking about choosing accounting as a profession, it is a good choice. There are many benefits to it. First of all, it provides stability. There is always a demand for accountants in the business sector as it is know as the language of business.
It is also a financially rewarding profession. Once you have gained the necessary experience and have the proper qualifications to be a chartered accountant, your potential earnings are highly favourable.
If you have an interest in accounting and you have good numeracy skills, amazing attention to details, working in the accounting industry will be a rewarding career for you. For example, if you are detail oriented and have an interest in investigating inconsistencies, missing information, in financial records, then forensic accounting career might be of interest to you.
You can work in the accounting line without a degree.You need at least a diploma or AAT (Association of Accounting Technicians) qualifications as a minimum prerequisite qualification to work in this industry. However, your job options might be limited to positions like bookkeeper. It is possible to use these qualifications to get your foot in the industry and pursue higher qualifications to achieve your goals.
If you want to pursue a degree in accounting, upon completing Sijil Pelajaran Malaysia (SPM) for those who have attended public school or O’levels for those who attended international school, you will need to take a pre-university course such as A-levels, STPM or a foundation course. You can then proceed to a Degree in Accounting with this qualification. Alternatively, you can complete Diploma in Accounting. This will enable you to pursue a Degree in Accounting, going directly to Year 2.
How to Become a Qualified Accountant?
As we know, there are many different pathways to become an accountant. The minimum requirement is to have at least a diploma or AAT qualifications. However, in order to become a qualified accountant which will lead to more opportunities, is by becoming a member of one of the recognised accounting institutes which represent accounting professionals and provide worldwide recognition for their knowledge, skills and experience.
Below are just two examples of the accounting institutes that can offer you accreditation in your chosen area of study and work.
- ACCA
- CIMA
If you are interested in pursuing an undergraduate programme in order to learn core accounting subjects along with electives from finance, marketing, business law and management, there are many options available. There are many universities that offer undergraduate accounting courses. Do your research and make sure the university you choose has all the required accreditation.
You can find the required details on admission processes for each establishment online, and on completion and acceptance of your application, you would normally be offered further details on semester hours, coursework and exam requirements, if you haven't had these already.
You can also find online training for personal and business accounting programmes like Sage, Quickbooks and so on.
Be Prepared to Work Your Way Up
Irrelevant of what qualifications you might have, you will not be able to start your career in a senior position right away. You can have AAT qualifications or a degree in Accounting, without any experience, you don’t have a chance to get a senior position in accounting.
You dream can be to be a Chief Financial Officer (CFO) or an Audit manager. You still need to start with an entry level position and work your way up to reach your ultimate goal.
Qualifications and experience come hand in hand. Both are equally important in progressing in the accounting industry. If you start with in an entry level position with a diploma in accounting, as you gain experience in the field, it is a good idea to continue your studies to gain a degree or professional qualification in order to be considered for a promotion.
Similarly, if you start your career with professional qualifications, but you have no experience, you will have to start in an entry level position, gain the relevant experience and only then you can progress to a higher position and eventually reach your dream position.
If you are interested in accounting and need help with your exams why not get the help of an accounting tutor from Superprof?
Business Accounting: A Summary
Having read the above, you should have a better idea of what accounting means in the business world, but let's recap below.
- Business accounting is how businesses gain understanding regarding their finances.
- The main responsibilities of an accountant in general is to compile, analyse, verify and prepare financial records for the business organisation.
- Accountants’ duties range from book keeping to interpreting financial data for senior management.
- Accounting roles are spread across many areas in the financial sector such as taxation, financial reporting, forensic accounting, corporate finance, auditing, business recovery and insolvency, or accounting systems and processes.
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