Financial accounting – at a glance
If you are passionate about collecting and maintaining financial information, you like to analyze fiscal trends, and are able to anticipate future economic needs, then financial accounting may be your top career option. As opposed to management accounting, financial accounting involves work that mainly revolves around past data and previous operations.
A financial accounting professional’s main task is to pinpoint, gather, register, and communicate a company’s fiscal information. Besides that, most financial accountants must compile comprehensive statements and transmit financial data to company managers, organizational leaders, and various decision-makers that may not have in-depth accounting knowledge
Financial accounting explained
A financial accounting expert uses numerous accounting principles, whose number depends on the regulation and reporting prerequisites that the business they work for must meet. Public companies that are based in the U.S. should comply with a set of Generally Accepted Accounting Principles (GAAP). These principles provide relevant data about a company’s past performance to investors, regulators, tax authorities, and creditors.
Backed by the Financial Accounting Standards Board (FASB), GAAP combines a set of trustworthy standards and a series of methods to record and report financial accounting data in a commonly-accepted manner. Through GAAP, organizations witness an improvement in the consistency, coherence, and comparability of communicating financial information.
Grow your career in financial accounting
If you plan to start a career in financial accounting, there are plenty of options ahead. Financial accountants can work in a broad array of industries, from nonprofit organizations to global corporations. Their main duties usually depend on the size, scope, and type of the organization that employs them. Nevertheless, some typical responsibilities include drafting reports and financial statements or counseling the company’s board on developing strategies and making investment decisions.
Another key task for financial accountants is to give insights regarding the company’s financial position in relation to external audiences. They must also be aware of the most significant macro-economic trends that may influence financial decisions and provide monetary guidance.
Responsibilities of a financial accountant
A career in financial accounting can be both engaging and highly lucrative. However, to become a true professional in the field, you have to remain committed, work hard, set high standards, and constantly broaden your knowledge and expertise. Ideally, the know-how should be coupled with personal competencies and analytical skills that can help you use speed as a differentiator in your day-to-day work.
As someone who works directly with a company’s most significant commodity – money, a financial accountant has a wide range of responsibilities. That’s why employers seek to identify professionals that are truly trustworthy and can do their job well under constant pressure.
Top skills to become a financial accountant expert
In addition to specific financial accounting expertise and in-depth knowledge in the field, you must show certain competencies, traits, and abilities to develop a rewarding career in financial accounting. Here’s a selection of the most valued skills within the industry.
Analytical and math skills
In this field, it’s vital to know what data you need in a specific situation and how to analyze it thoroughly to reach the results you target. Estimation and logic also play an essential role, and by having this strategic mindset, you should be able to make precise financial evaluations and develop accurate forecasts. Besides that, excellent knowledge of arithmetic, statistics, and algebra is indispensable.
Communication and writing skills
For a financial professional that must compile and communicate reports to audiences that do not always have accounting expertise, it’s vital to be a good and effective communicator. Verbal and writing skills are useful to make sure you convey the message you want in a well-structured manner, both in live presentations and through emails.
Ability to work with modern technology
By using the latest technology, you can now process, identify, and sort the data you need to compile financial reports much faster. Modern platforms, software, mobile applications, and other technological tools evolve constantly, so you should stay updated with all the newly available releases, functions, and capabilities.
Risk management skills
When assessing financial professionals, many organizations consider risk management skills to be as valuable as accounting expertise. Decision-making is closely tied to the capability of understanding threats. Therefore, any individual who is able to adjust his actions to mitigate short- and long-term risks can be a crucial contributor to a company’s success.
Having a solid code of business conduct
Integrity is crucial in any business environment, and it’s the main ingredient that grants excellent workplace connections. Strong professional relationships are based on mutual trust, good reputation, and total honesty, and for that, you should strictly follow a reliable code of business conduct.
Showing competency in financial accounting is critical every step of the way. Doubled by a flawless reputation, personal proficiency is the firm guarantee the investors seek to be sure they always make educated choices. Willing to learn more about how to become an expert in the field of financial accounting? Read through the next sections of this article, dedicated to degrees, certifications, and career paths.
Bachelor’s degree in financial accounting
A bachelor’s degree in accounting (BA) is the first step of any successful and long-lasting financial accounting career. By enrolling in a BA program, you start learning the principles of accountancy that will help you succeed in jump-starting your accounting career. Once you have earned a BA degree, you will know how to use the rules of financial accounting and reporting in a globalized economic world. You will also be able to compile financial statements and records for both external and internal stakeholders while making sure that your reports are in full compliance with the local and national laws, rules, and regulations.
Explore the syllabus of financial accounting
As an introduction to financial accounting, you will discover the broad role accountants play within the larger context of an organization. This role includes being able to collate, analyze and communicate information that is crucial to the organization.
As part of the so-called accounting cycle, you’ll learn more about several recurring financial statements, starting with the balance sheet. Next, you will begin to record transactions and use journal entries. You’ll start to master other financial statements, including profit and loss reports (also known as the income statement), statements of equity (also called the statement of retained earnings), and cash-flow statements.
Master’s degree in accounting
Earning a master’s of accounting (MA) can grant you access to better employment opportunities and more complex roles within the organization. An MA program gives students advanced accounting know-how and deepens the principles, notions, and practices already learned during their BA courses.
To earn an MA in accounting, you usually have to study for 2 years or 35-40 credit hours. Besides diving deeper into accounting activities and processes, a master’s program also gives you the opportunity to opt for a specialization and thus become an expert in a particular field. By earning this credential and gaining in-depth knowledge, you may have a clear advantage compared to other candidates who aim to compete for better financial accounting positions.
Every organization seeks to hire talented and well-prepared personnel, so the higher the education degrees you earn, the better. Accounting certifications are also a significant plus, and in many cases holding a BA or an MA counts among the prerequisites.
Becoming a Certified Public Accountant (CPA)
Although there is no specific certification in the field of financial accounting, many employers search for candidates who hold a Certified Public Accountant (CPA) credential. Such a prestigious certification gives you the chance to deepen your financial accounting knowledge and opens additional career opportunities.
Becoming a Certified Public Accountant (CPA) counts among your priorities? If that’s the case, first, you must successfully pass an exam held by the American Institute of Certified Public Accountants (AICPA). One of the 4 sections of the test is directly linked to your specialization: Financial Accounting and Reporting. Regulation, Auditing and Attestation, and Business Environment are the other 3 sections you are required to pass in under 18 months. The minimum score per unit is 75.
There are several prerequisites to become a licensed CPA, but the most important one is holding a BA degree with 150 coursework credit hours or more. Numerous states also ask candidates to pass an ethics test derived from the AICPA Code of Professional Conduct. To pass this exam, you should have more than 90% correct answers.
Whether you have earned a CPA credential or not, the financial accounting field may open a broad and varied range of employment opportunities. There are plenty of choices for you, from private companies to multinational organizations, government departments or agencies, or nonprofit business entities. Here are some of the options that lay ahead.