What is accounting? -A commonly used term, accounting remains a cornerstone of any company’s operations. Although we often hear about it, we may wonder about the true definition of accounting, or about the role of accountants. Faced with tax and legal constraints, these questions are crucial.
In this article, we explore the definition of accounting, and its roles to better understand it and grasp its finer points. After all, proper accounting means proper business management.
In the broadest sense, accounting is a discipline that allows you to establish accounts and reports, continuously and in real time, on the financial situation of your company.
It specifically aims to identify all cash flows and financial flows, in and out of a business, such as revenues and expenses. With this objective, all financial transactions are recorded in an accounting book, called a general ledger.
It is also important to note that accounting is based on several key accounting principles, such as the principle of business continuity, reviewing financial statements unbiasedly during an audit, and remaining in good faith.
The Functions of the Accountant
Accounting functions in Montreal vary from company to company. Generally, the role of accountants and bookkeepers, is to maintain the accounts of the group or company that employs them. Professionals play an important role in the financial management and life of the company. As a result, accounting professionals need to be very flexible in terms of the accounting services offered. Explore the tasks and accountancy qualifications required for this role.
An accountant or accounting director is responsible for maintaining the accounts of one or more companies. This specialist is responsible for, among other things, the VAT declaration. At the end of the accounting year, the expert draws up the balance sheet or annual account. Accountants are also responsible for processing a company’s financial and accounting data. This helps track debtors and creditors. Accountants also track tax returns.
Control is also an accounting task. A specialist is responsible for the operational and financial management of the structure in which he works. He also handles contingencies, budget analysis, and is in charge of the new budget.
Most of the time, accountants or auditors work in an office or accounting firm. However, the accountant may visit a client from time to time. An accountant’s working hours are generally pretty standard. However, there are times when work can be more stressful, such as when filing taxes or at the end of an accounting year.
The role of an accountant in an accounting firm:
- Manages the accounts of one or more companies: traders, self-employed individuals, farmers, craftsmen, etc.
- An accountant may also be responsible for the financial management of one or more large client accounts.
The Role of an Accountant in a Large Business:
In this case, the specialist works with the chief accountant. He is usually responsible for the following activities, and more:
- Financial management of the supplier account
- Payroll Management
- Financial analysis
Qualifications and Competencies Required to Practice the Accounting Profession
- To be a good general accountant, you must:
- Respect the law
- Work effectively and methodically
- Meet deadlines (payroll, tax deadlines, etc.)
- Have great personal communication skills
Regardless of the responsibilities of the accountant and the company for which they work, the professional must be:
- able to work under pressure (especially at the end of the month and at the end of the year)
- Knowledgeable about legal standards (government procurement codes, company and labour laws), accounting standards, and tax standards;
- Proficient in accounting and tax processing software with a substantial knowledge of computer and office software;
- Speak English, especially business English, if the company is working internationally.
Prospects for the development of the accounting profession
Accounting work is often linked to administrative agencies, large and small businesses, or banks. Various professionals are available through accounting firms. Employers value work experience in an accounting firm, so the opportunity for evolution is certainly there.
The career development of an accountant depends on the structure in which he or she works. He may become a management controller, accounting director, chief accountant, public accountant or financial director. He may also move on to the position of auditor and examiner in an administrative body or financial auditor.
Decision Support Tools
Accounting remains an essential tool for business management and decision-making. The role of accountants is to provide management and managers with reliable information, to determine strategy, and make economic decisions.
Thus, once a year, at the end of the year, they must prepare a summary of accounting documents, which is mandatory. They may also generate interim statements at any time (interim accounting situations) showing the company’s financial situation on an ad hoc basis.
Useful for management control, it even goes beyond a decision support role. For example, calculating the profitability of a position allows you to gauge the relevance and viability of your company’s business model.
Finally, the accuracy of supporting accounting makes accounting a perfect means of communication for all parts of the business, with each part of the business being able to rely on financial statements to assess its own performance.