An accountant is a person who records business transactions on behalf of an organization, reports on company performance to management, and issues financial statements. Here are several examples of the types of transactions in which an accountant may become involved:
- Issuing an invoice to a customer, which involves recording a sale and account receivable.
- Receiving an invoice from a supplier, which involves recording an expense or asset and an account payable.
- Issuing a salary or wage payment to an employee, which involves recording an expense and the outflow of cash.
- Reconciling a bank statement, which likely produces adjustments to the cash account.
In addition to transaction recordation, an accountant produces a number of reports. The key types are as follows:
- Financial statements are issued to the owners and/or operators of a business, as well as to lenders and other creditors. The financial statements include the income statement, balance sheet, and statement of cash flows.
- Management reports are issued to the management team. The reports are highly customized to the needs of each entity, and may cover such topics as the sales of certain product lines, investigations of cost variances, sales returns, and an analysis of overtime incurred.
- Tax reports are issued to several government entities. The reports provide detail regarding the amounts paid for income taxes, property taxes, sales taxes, use taxes, and so forth.
An accountant may also be involved in the creation of a number of processes within a business, which typically include several controls to ensure that assets are properly managed. Examples of such processes are:
- Shipments to customers
- Receipts from suppliers
- Cash receipts from customers
There are many sub-fields within accounting, in which a person can specialize. For example, there are tax accountants, cost accountants, payroll clerks, inventory accountants, billing clerks, general ledger accountants, and collection clerks. This level of specialization is needed in order to increase the efficiency with which certain tasks are conducted.
An accountant may choose to pursue a certification, of which the most prestigious is the certified public accountant (CPA) designation. A CPA license is required before a person can audit the books of a client organization.