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What Does an Accountant Do and Does My Business Need One?

What does an accountant do that can benefit your small business? Learn how to get support with monthly reconciliations, tax, audits and more.

Whether your business is a mature company or a new startup, it likely has the same financial goals: minimize costs, file taxes accurately and on time and make optimal financial decisions. Most growing businesses rely on accountants to offer strategic guidance to achieve these objectives.

Not only do accountants manage a business’s everyday financial data, but they also provide concise summaries of the business’s financial health and recommendations to improve the company’s financial position. What does an accountant do, and how can your business tap into more flexible accounting solutions with a fractional expert?

What does an accountant do? Roles, responsibilities and skills

At a high level, accountants are professionals who keep and interpret financial data to help management make informed business decisions. Unlike a bookkeeper, whose sole focus is collecting, organizing and recording financial data, accountants analyze the data to make recommendations for overall business strategy. In addition, some accountants will work seasonally to prepare company tax returns and ensure taxes are paid accurately and on time.

Skills and education

Given the highly analytical nature of an accountant’s role, these professionals need to have strong mathematical skills and computer literacy to perform complex analyses and streamline functions. Accountants must also have a strong understanding of the basic functions of business along with clear communication skills in order to translate complex financial data to key company stakeholders and make sense of strategic recommendations.

Most accountants have at least a bachelor’s degree, and many qualify as Certified Public Accountants (CPAs).  A CPA will have at the very least completed 150 semester hours of relevant education, passed the uniform CPA exam and met all state licensing requirements, which may include specific industry work experience or passing an additional ethics exam. A CPA must also complete 40 hours of continuing professional education (CPE) every year.

You don’t have to be a CPA in order to work as an accountant; thus, while all CPAs are accountants, not all accountants are CPAs or can provide CPA tax services.

Types of accounting specialties

Within accounting, there are different specialties that startups and small businesses can utilize based on their specific business needs. The different types of accounting include:

  • Managerial accounting: This method of accounting focuses on tracking the financial information needed for company management to make strategic decisions.
  • Cost accounting: Cost accounting determines the optimal costs of company products and services as well as optimizing company operating costs.
  • Tax accounting: Tax accountants prepare federal, state and local tax returns for companies in accordance with all tax laws and regulations.
  • Nonprofit accounting: Nonprofit accounting focuses less on maximizing profits and more on minimizing costs and maximizing community service. Accountants gathering data and compiling reports for nonprofit organizations.
  • Auditing: This entails analyzing financial records to ensure that the reporting is accurate, complete and in compliance with all federal and state laws.

In sum, if you’re interested in using your financial data to make better decisions for your business, there is likely an accounting service to tackle your financial needs.

How an outsourced accountant can support your business

Most small business and startup founders will either handle financial record keeping themselves or hire a bookkeeper for their business during their initial stages. However, as the business grows and the financials become more complex, executives can benefit from a fractional accountant that easily takes the tax and financial work off of their hands and offers helpful insight into the company’s core strengths and weaknesses.

Some typical accounting tasks that a business could outsource to a fractional accountant include:

  • Account reconciliation: Reconciliation ensures that your financial statements align with your accounts, reducing the likelihood of errors or fraud.
  • Financial reporting: Accountants compile your financial data into reports, such as income statements, balance sheets and cash flows statements to enable immediate and forward-looking decision making.
  • Accounts payable (AP): AP tasks include ensuring that money owed by your company goes to any creditors or vendors.
  • Accounts receivable (AR): AR tasks include ensuring receipt of money owed to your company by your customers.
  • Tax returns: Accountants prepare and file tax returns on a recurring basis and may help with more extensive tax planning.
  • Implement accounting information systems (AIS):  AIS systems allow your company to compile, store and analyze all financial data from various company departments in one place. Examples of such systems include Quickbooks, Netsuite, SAP’s Business One and Oracle’s Peoplesoft.

Is now the right time to seek accounting solutions?

Of course, it’s hard to know at what stage of growth a small business should engage an accountant. Every business’s financial needs are different, but here are few common scenarios in which small businesses have outsourced accounting services:

  • Tax season is coming, and the business needs someone to file the company’s taxes accurately and on time.
  • The business is being audited, and it needs an expert to gather the relevant financial data and documents.
  • Recurring financial tasks are taking up too much of the business owner/founder’s time, and they need someone to take the day-to-day financial operations off of their plate.
  • The business executives want in-depth financial analyses to inform the financial state of the business and strategic decisions moving forward.
  • The business is considering large strategic moves like applying for funding or expanding to new markets, and the executives want to understand the possible financial implications of such ventures.

Many small businesses and startups would benefit from accounting services, but they don’t necessarily have the means or workload to hire a full-time accountant. Paro’s accounting and bookkeeping services enable a company to outsource its accounting needs on a project-by-project basis. This way, businesses save time and money in full-time hiring and onboarding, and they have the flexibility to tap different accounting services as their business needs change. Find a highly vetted, fractional accountant for seasonal or ongoing support, based on your company’s needs.

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    What does an accountant do that can benefit your small business? Learn how to get support with monthly reconciliations, tax, audits and more.

    Whether your business is a mature company or a new startup, it likely has the same financial goals: minimize costs, file taxes accurately and on time and make optimal financial decisions. Most growing businesses rely on accountants to offer strategic guidance to achieve these objectives.

    Not only do accountants manage a business’s everyday financial data, but they also provide concise summaries of the business’s financial health and recommendations to improve the company’s financial position. What does an accountant do, and how can your business tap into more flexible accounting solutions with a fractional expert?

    What does an accountant do? Roles, responsibilities and skills

    At a high level, accountants are professionals who keep and interpret financial data to help management make informed business decisions. Unlike a bookkeeper, whose sole focus is collecting, organizing and recording financial data, accountants analyze the data to make recommendations for overall business strategy. In addition, some accountants will work seasonally to prepare company tax returns and ensure taxes are paid accurately and on time.

    Skills and education

    Given the highly analytical nature of an accountant’s role, these professionals need to have strong mathematical skills and computer literacy to perform complex analyses and streamline functions. Accountants must also have a strong understanding of the basic functions of business along with clear communication skills in order to translate complex financial data to key company stakeholders and make sense of strategic recommendations.

    Most accountants have at least a bachelor’s degree, and many qualify as Certified Public Accountants (CPAs).  A CPA will have at the very least completed 150 semester hours of relevant education, passed the uniform CPA exam and met all state licensing requirements, which may include specific industry work experience or passing an additional ethics exam. A CPA must also complete 40 hours of continuing professional education (CPE) every year.

    You don’t have to be a CPA in order to work as an accountant; thus, while all CPAs are accountants, not all accountants are CPAs or can provide CPA tax services.

    Types of accounting specialties

    Within accounting, there are different specialties that startups and small businesses can utilize based on their specific business needs. The different types of accounting include:

    • Managerial accounting: This method of accounting focuses on tracking the financial information needed for company management to make strategic decisions.
    • Cost accounting: Cost accounting determines the optimal costs of company products and services as well as optimizing company operating costs.
    • Tax accounting: Tax accountants prepare federal, state and local tax returns for companies in accordance with all tax laws and regulations.
    • Nonprofit accounting: Nonprofit accounting focuses less on maximizing profits and more on minimizing costs and maximizing community service. Accountants gathering data and compiling reports for nonprofit organizations.
    • Auditing: This entails analyzing financial records to ensure that the reporting is accurate, complete and in compliance with all federal and state laws.

    In sum, if you’re interested in using your financial data to make better decisions for your business, there is likely an accounting service to tackle your financial needs.

    How an outsourced accountant can support your business

    Most small business and startup founders will either handle financial record keeping themselves or hire a bookkeeper for their business during their initial stages. However, as the business grows and the financials become more complex, executives can benefit from a fractional accountant that easily takes the tax and financial work off of their hands and offers helpful insight into the company’s core strengths and weaknesses.

    Some typical accounting tasks that a business could outsource to a fractional accountant include:

    • Account reconciliation: Reconciliation ensures that your financial statements align with your accounts, reducing the likelihood of errors or fraud.
    • Financial reporting: Accountants compile your financial data into reports, such as income statements, balance sheets and cash flows statements to enable immediate and forward-looking decision making.
    • Accounts payable (AP): AP tasks include ensuring that money owed by your company goes to any creditors or vendors.
    • Accounts receivable (AR): AR tasks include ensuring receipt of money owed to your company by your customers.
    • Tax returns: Accountants prepare and file tax returns on a recurring basis and may help with more extensive tax planning.
    • Implement accounting information systems (AIS):  AIS systems allow your company to compile, store and analyze all financial data from various company departments in one place. Examples of such systems include Quickbooks, Netsuite, SAP’s Business One and Oracle’s Peoplesoft.

    Is now the right time to seek accounting solutions?

    Of course, it’s hard to know at what stage of growth a small business should engage an accountant. Every business’s financial needs are different, but here are few common scenarios in which small businesses have outsourced accounting services:

    • Tax season is coming, and the business needs someone to file the company’s taxes accurately and on time.
    • The business is being audited, and it needs an expert to gather the relevant financial data and documents.
    • Recurring financial tasks are taking up too much of the business owner/founder’s time, and they need someone to take the day-to-day financial operations off of their plate.
    • The business executives want in-depth financial analyses to inform the financial state of the business and strategic decisions moving forward.
    • The business is considering large strategic moves like applying for funding or expanding to new markets, and the executives want to understand the possible financial implications of such ventures.

    Many small businesses and startups would benefit from accounting services, but they don’t necessarily have the means or workload to hire a full-time accountant. Paro’s accounting and bookkeeping services enable a company to outsource its accounting needs on a project-by-project basis. This way, businesses save time and money in full-time hiring and onboarding, and they have the flexibility to tap different accounting services as their business needs change. Find a highly vetted, fractional accountant for seasonal or ongoing support, based on your company’s needs.

    Article Content
      Services Covered
      Accounting & Bookkeeping Accounting
      Sign up to get the latest news & insights from Paro
      Related Reads
      Trending Content

      Share These Insights with Your Network

      facebook
      twitter
      linkedin

      Need Help? If you are looking for finance and accounting support, contact us today.

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