When you think of accounting, the term “flexible” may not come to mind. Of course, the numbers need to be right and that can be pretty rigid, but the accounting industry is actually a very flexible and diverse place to work.
There’s a wide range of accounting roles to be filled and many opportunities for advancement. With each role, the day-to-day job looks a bit different. Location, industry, and education level can all affect what accountants do each day. But there are some common accounting tasks that most accountants will be involved in on some level. Here’s what you can expect from a typical day on the job as a junior accountant.
The Monthly Rhythm of Accounting
To understand the job of accountants, you need to understand the environment. What an accountant does from day to day really depends on where they are in the month or year. That’s because accounting has a predictable rhythm that follows accounting periods.
Each month has its own accounting cycle, with a yearly cycle on top of it all. With each new month, the process begins again. Early in the period, a junior accountant may be compiling data from the previous period into a format that can be shared both internally and externally.
Throughout the middle of the month, they may be recording transactions and maintaining accurate accounts in preparation for the end of the month. As the month comes to a close, the team focuses on verifying data and completing a review process so they can close out the books for the month with confidence.
Along with changing tasks, workload and intensity can also vary. The end of the period or just before a tax deadline can be crunch time for many accountants. This also depends on whether you work in a public accounting firm or an accounting department in the industry.
Working With Technology
One of the essential skills for today’s accountants is digital intelligence. If you aren’t comfortable using technology to solve problems and streamline your job, you may have a hard time in accounting. Although some accounting processes are done manually, a junior accountant will spend most of their time working with different forms of technology.
By leveraging technology, accountants can streamline their workflow and provide added value to the companies they work for. Key tech tools allow accountants to track financial transactions more accurately, forecast future changes, analyze trends, and collaborate easily with the rest of the team, even from different locations.
At a minimum, most accountants will work with a desktop or cloud-based accounting software like QuickBooks or Xero or an ERP system like Sage or Netsuite.
In addition to that, most will use a variety of software and apps that connect to the system. This allows them to sync data without manually re-entering it and reduces the risk of error while also saving time. The ability to quickly learn and adapt to these tools is a major asset for an accountant.
The foundation of a junior accountant’s job is transactional accounting. Just like the name says, this consists of accounting for transactions.
In the course of business, everything needs to be recorded accurately. Technology can sync many of these transactions directly from the bank, payment processors, or POS systems. In that case, the accountant’s job may be simply to verify what comes in and make sure there are no problems.
There are also many transactions that don’t go through the bank or involve any cash, like depreciation and monthly adjusting entries. Many of those transactions will be recorded by a junior accountant in the form of a journal entry.
As the month draws to an end, reconciliations become a major focus for junior accountants. Account reconciliation is the process of matching up accounting records with outside sources like bank statements as well as other internal systems (for instance payroll expense in the accounting system compared to the payroll software) to ensure accuracy.
Accounts are reconciled as often as possible to make sure accounting records are accurate. The more important the account, the more often it should be reconciled.
Again, reconciliation makes use of technology by importing statements and comparing them to accounting records. If the two don’t match up, it’s the job of the accountant to dig down and find out why.
Perhaps there’s a transaction missing or a transaction that was duplicated. The bank may show a fee or interest that hasn’t been entered into the accounting software or the accounting system may show a payment that hasn’t yet cleared the bank. Necessary adjustments are made to rule out errors.
The Month-End Close
Reconciliations are one of the first steps in the monthly close process. At the end of each period, accountants complete a review process to verify as much information as possible and check for accuracy. The goal is to close out the month with reasonable confidence that there are no mistakes so no one has to go back and change something later on.
The close can be challenging because it often involves several people sharing information and coordinating to complete the process. With many tasks depending on others, the close process can be long. However, close management tools can help streamline and coordinate the team to make it go more quickly.
A close checklist is often used to coordinate the entire process. This allows the accounting team to work together more efficiently. It ensures that nothing is missed and no work is duplicated.
The monthly close is especially important for publicly traded companies because of now intense regulations. CFOs, CEOs, and directors may be required to sign off on financial statements and they want to be sure everything is accurate before they do.
In the event of an audit, it will also be very important to know who did what. This often involves team members signing off on each step of the monthly close. Technology can make this easier by tracking tasks as they are completed and keeping all sign-offs and source documents in one central place.
One major goal of the monthly close (or the quarterly or yearly close for that matter) is being prepared to create sound financial statements.
Stakeholders at all levels want to know what’s going on in the company, financially. Financial statements like the Profit and Loss Statement, Balance Sheet, Cash Flow Statement, and Statement of Owner’s Equity make it possible to communicate this information.
Junior accountants may compile financial information and create financial statements. In addition to making sure the information is accurate, they need to be sure it complies with GAAP (Generally accepted accounting principles) and other standards.
Financial statements are used internally, and also shared with investors, banks, and other key stakeholders in the business. They need to be accurate and clearly represent what’s happening inside the business. This makes the accountant’s work critical. Without it, it would be nearly impossible to plan, budget, or obtain financing.
Maintaining Internal Controls
As accountants deal with financial records, they also need to keep them safe. Processes and internal controls need to be in place to ensure that data is secure and that no fraudulent activity is going on.
In some cases, these internal controls are required by law for the protection of shareholders. In private companies, they’re often put in place simply to protect the company from errors and theft.
Internal controls are processes and procedures that provide checks and balances against both accidental errors and intentional fraud. For example, requiring multiple signatures or separating duties so no one individual can defraud the company and cover their own tracks.
Accountants may be involved in establishing these controls and are always responsible for making sure their work follows the procedures that are in place.
Although financial statements record what’s already happened, the information contained in those statements – and the rest of the accounting records – can often be used to forecast the future.
Many accountants spend their time analyzing data, looking for trends, and using that analysis to forecast what’s coming. Companies are at a huge advantage if they can anticipate future revenue, costs, and profitability and adjust accordingly. These forecasts can be used to create budgets that ensure the company stays within its means.
Forecasting can also be done on a larger scale. Accountants may look at the data from the entire industry or economy to make educated predictions of what the future will bring and how best to take advantage of it.
A Taxing Profession
It’s hard to talk about accountants without mentioning taxes, although not all accountants deal with tax. Some accountants on the cost and managerial side may never have to think about taxes, other than their own. Others focus on taxes and deal with them every day.
In a public accounting setting, tax planning and preparation may be a big part of the job. In these roles, accountants help clients maximize their after-tax income or handle their actual tax filings.
In private industry, many junior accountants take a more general role and may deal with taxes only as a small part of the job. This can include preparing tax returns for the company, remitting payments, and evaluating the tax implications of business decisions.
Large companies often have entire accounting departments with specialized roles. They may even have accountants whose full-time responsibility is planning and managing the company taxes.
Shaping the Company
More than ever before, accountants – even at a junior level – play a major role in shaping the future of the companies they work for. They’re able to analyze large amounts of data and model the potential outcomes of different scenarios. With this information in hand, the company’s decision-makers can be far more accurate and confident when steering the business.
As technology automates more and more manual accounting tasks, accountants are freed to take on a more strategic role. Analyzing the numbers and using them to plan and strategize for the future allows accountants to take a more involved role in where the company is going. This is true both at a junior level and all the way up to Controllers and CFOs. Across the board, accounting professionals are playing a bigger role in strategy and operations than ever before.
Although accountants are often seen as number crunchers, communication skills are crucial too. In fact, the technical nature of accounting makes clear communication even more important. Sharing detailed financial data with non-accountants requires a great deal of skill and that information is only useful to the company if it’s understood by everyone.
Accountants spend a good deal of time preparing reports and sharing financial data in a clear, concise manner with various stakeholders. Guiding the business in the right direction depends on the ability of all involved to understand the financial data being presented, and only the accounting team can make that happen.
Looking Toward the Future
Although many accounting tasks look at the past, ambitious accountants can always look to the future. Accounting is filled with advancement opportunities and new ways to grow your career. In fact, flexibility and upward mobility are a big part of what makes accounting a great career choice. (That and a median salary over $70,000 with the potential to earn even more.)
Accountants always have opportunities to grow and better themselves through continuing education, experience, and formal schooling. Over time, a junior accountant can become a senior accountant, accounting manager, controller, and even a CFO or partner. Though that may be far down the road, it’s never too early to consider your future and how your efforts today can help you move in the right direction.
As you can see, the life of a junior accountant is full of challenges and rewards. The variety of work and the impact you can have on your organization make it a terrific career path. The upward mobility and wide range of jobs available make it easier to find the perfect fit and continue to grow throughout your career.
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