What does an Accountant do?

When you think about the role of an accountant, it might seem obvious to say that they play a crucial part in preparing, analysing and managing a company’s financial records. In truth, however, the role of an accountant - particularly when it comes to working with small businesses - is varied, with different types of accountants offering different skills and bringing different benefits to their clients.

What is an accountant?

Put simply; an accountant is a professional who monitors the financial health of both individuals and businesses. However, there are numerous types of accountants who provide advice and expertise to a range of organisations within this, including accountants who work with multinational corporations or small businesses or those who specialise in working with charities or government bodies. 

Within these sectors, you’ll also find accountants who work in specific areas, such as auditing, tax, corporate finance, debt recovery or forensic accounting. This could be in-house for a particular business, working with multiple clients via an accountancy firm, or even freelancing.

Accountants within a public practice will likely be tasked with supporting clients to manage their finances. In-house management accountants will focus more on managing budgets and looking at making their organisation more profitable. Forecasting and strategic business planning would form a more significant part of their work.

Financial reporting will make up more of the role for those operating in the public and voluntary sectors as accountability and reporting to stakeholders is key.

Accountants and small businesses

While it’s easy to see the need for a strong accountancy team in large, complex organisations, what shouldn’t be overlooked is the value they can also bring to the self-employed and small businesses. Your time is likely precious as a small business owner, and you’re constantly multitasking. Having a trusted accountant will help ensure that the critical area of your finances doesn’t get overlooked at busy times and that you fulfil all of your reporting requirements. 

However, your accountant can do much more than get your books in order and prepare your tax documents. They can keep an eye on your bottom line, help you avoid making financial mistakes, ensure your plans are fully funded, advise on any financial concerns, and bring a new, knowledgeable set of eyes to your business.

A good accountant will also be able to help you control your credit and cash flow to aid business longevity, remove the burden around tax season and ensure you continue to meet any new or changing rules and regulations. Even if you’re in a position to do your accounts yourself, hiring an accountant to help you set up your accounting software and to share their insight can be invaluable.

All in all, an accountant can help to reduce your workload, save you money and ensure you are better placed to adapt to whatever the future may bring.

What does an accountant do?

Critical tasks that your accountant will carry out include:

• Preparing tax returns and monthly/annual accounts 
• Business forecasting
• Preparing budgets
• Staff payroll
• Management reporting
• Tax planning
• Advisory services

What qualifications does an accountant need?

Whether accountants take the academic, vocational or work-based route into the industry, they’ll still need to gain the relevant professional accountancy qualifications to practice. For those working in public practice, this could include the ACA qualifications from the Institute of Chartered Accountants in England and Wales (ICAEW) or the broader Association of Chartered Certified Accountants (ACCA) qualifications. Other options include Chartered Institute of Public Finance and Accountancy (CIPFA) or Chartered Institute of Management Accountants (CIMA) qualifications.

Those who take the academic route will also complete a degree, whether in accountancy or another relevant subject such as maths, economics, business, or management and finance. The vocational route would involve a BTEC level 3 (or similar) plus a degree plus professional qualifications. In contrast, work-based training would include studying for professional qualifications while completing an apprenticeship or working in a junior position within an accountancy firm.

How much does an accountant earn?

As there are so many different roles within accountancy and multiple ways to practice, it’s hard to give an exact figure for their salary.

For example, while studying, an accounting technician could expect to earn around £20,000-£25,000 a year, rising to nearer £30,000 once qualified. At the other end of the scale, the average salary for a chief financial officer in the UK is around £125,000, but this could rise to over £200,000 depending on location, experience and skills.

A chartered accountant can expect to earn around £50,000 within a few years of starting out. 

How much does an accountant charge?

The variety of roles, the position of the client, location and experience will again all play a role in determining how much an accountant will charge. As a rough guide, expect to pay from £50 to £150 per month as a freelancer or contractor. This will cover multiple tasks, such as having your accounts done, self-assessment submissions and bookkeeping.

Limited companies and their directors will pay a combination of different fees to cover self-assessments, business accounts preparation and submission, Companies House submission, VAT returns, payroll, bookkeeping, and so on. Fees will depend on the size and complexity of the business but could be as little as £100 a month, rising to over £1,000 for those with more complex needs.

If you're wondering whether you should have an accountant or not, read our guide on How to Know When You Need to Hire an Accountant

Which software do accountants use?

Most accountants will now utilise cloud-based accounting software to deliver a more responsive and timely service to clients. Take AccountsPortal as an example. With this software, you’ll be able to log in and see as your accountant makes real-time adjustments to your finances and reviews your situation to ensure you always have access to the most up-to-date, accurate information. It is available anywhere there is an internet connection, so your accountant is always on hand, and all your data is always secure and backed up. It’s also accredited by the ICB and has proven itself as a robust, reliable accounting platform.