What Do Accountants Do? (Explained by 8 Accountants)

Are you thinking of exploring a career as an accountant? Or perhaps you’re thinking of hiring one?

We asked experts to explain some of the duties of an accountant so that you will have a better understanding of what their skills sets are.

Accounting work is interesting and challenging

It’s interesting to hear what people “think” I do. I remember telling people I was a CPA. The typical response to that was, “Oh, so you do taxes?”

Well, for me, that was not true and I would explain what I did. When I became a CFE and CFF, I remember telling people I was a forensic CPA. I remember once getting a response that was, “Oh, so you do taxes for dead people?” Yeah, that’s not right either.

I would explain that I work on a lot of cases where I help people figure out who took the money, how much did they take and where’s the money now.

What Does a Forensic Accountant Do?

It varies from case to case, day to day. One day I might be working on a divorce case where a husband is hiding money from his wife. I have to figure out if money is missing and if so, how much. I also have to be prepared to answer the question, “Where did the money go and where is it now?”

On another day, I might be working on a case where a bookkeeper has deleted transactions from the company’s general ledger. The bookkeeper is “cooking the books” and I have to figure out how and why.

On yet another day, I might be working with an attorney to draft a list of questions to be asked in a deposition of a defendant, or working to draft a list of documents and records to be requested for my investigation.

Finally, for most cases, my work will typically end up in a written report. Forensic accounting reports will include an executive summary, some background on the case, the scope of the forensic work, the procedures I performed, my findings, my recommendations and an appendix with supporting documents.

A short report might be 50 pages. So, at the end of the day, forensic accounting involves a lot of reading and writing…and no two days are the same.

There are some common themes in forensic accounting. These cases take a lot of time and can cost clients a lot of money. From start to finish, these cases are measured in months and years, not days and weeks. Requesting a bank statement might require an attorney to subpoena a bank. The bank may have to locate records from six years ago and redact parts of the statement. No part of that moves quickly.

Forensic accounting cases are also document intensive. It’s common to receive, review, index, file, and reference thousands of pages of documents coming from attorneys and clients.

In a small case, I might get five thousand pages of tax returns, bank statements, contracts, check images, invoices, emails, ledgers, journals, credit card statements and so on.

Because I often need to know if I have a complete and accurate set of records, I will also verify, for example, that I have every page of every bank statement between 2016 and 2018 and that the ending balance from month #1 agrees to the beginning balance of month #2.

It’s tough to give a definite answer

There are so many different varieties of accountants that it’s tough to give a definite answer to “what accountants do.” That being said, I can tell you pretty specifically about the things I have done in my career as a CPA, and here they are.

Accountants use spreadsheets

When people hear that I’m an accountant, they assume that I’m really good at math. I can see where this misconception comes from, given that accountants by definition work with numbers.

But the reality is that accountants use spreadsheets and software rather than their own mental arithmetic skills to come up with their numbers. So I think a better assumption about accountants is that we’re really good at Microsoft Excel rather than math!

Accountants write a lot

I’ve written a lot of words as an accountant. Examples include writing emails to clients on a daily basis explaining complex tax or accounting issues in language they can understand, drafting memos documenting tax positions, and writing instructions to others on my team so they can do their jobs better.

While it’s true that some people in the broader accounting profession such as bookkeepers probably don’t do very much writing, most accountants do more writing than one might think.

Accountants work in teams

For many people, the word “accountant” conjures up an image of someone working alone in a cubicle, pecking at their keyboard and ten-key calculator for eight hours a day and not speaking a word to anyone else.

While that may be the reality for some low-level clerical accounting positions, this was never true for me. I was always working in teams to get projects done, and I enjoyed it.

Accountants have their hands in many exciting areas

The image of an isolated, socially-awkward accountant sitting in a dimly lit room, punching away on an adding machine, and muttering curses at the tax code is an antiquated one but still popular.

Contrary to popular belief, accountants have their hands in many exciting areas within the business world and personal lives. What an accountant does is only limited by his or her imagination.

Accountants with big imaginations can find themselves behind the scenes with celebrities, on stage with the latest tech start-ups, in the board room of blue-chip companies, in the field with community-focused nonprofit organizations, and in more fun places sharing their valuable knowledge.

Similar to the personal attorney, accountants (especially CPAs) are now regularly relied upon for many purposes. They manage daily operations and business risk, plan strategies, evaluate financing options, prevent fraud, and prepare financial information – a lot more than argue with Uncle Sam.

So, the next time you hear “accountant,” replace that antiquated image appearing in your head with the accountant of today – the one that’s likely in the skybox of your favorite sports team or backstage with your favorite celebrity after completing a job well done for a happy client.

Accountants are an asset to a business

They help business owners maintain accurate, reliable and timely financial records. In addition, accountants help businesses interpret the story behind the numbers.

They are equipped with the expertise to help businesses use their financial information to make wise business decisions, increase cash flow, reduce tax liabilities and maximize profits.

The foundation of a successful business is built on its financial foundation. Accountants help build and maintain a solid foundation for businesses.

Accountants do much more than just taxes

When I tell people that I’m a CPA the very next question I always get is “Can you do my taxes?!” The thing most people don’t understand is that accountants do much more than just taxes. Some accountants might hardly even touch taxes.

In my career as a CPA, I have had many different roles. I’ve audited financial statements, prepared tax returns, performed financial reporting and analysis, prepared quarterly forecasts and annual budgets, interfaced with all departments of a company, and much much more.

The life of a CPA is not as cut and dry as the average person may think. There are many different paths an accountant can take…some of which may hardly be related.

The term accountant is an ambiguous term

For example, you don’t need a license, or education to call yourself an accountant in most states.

The main types of accountants are CPA’s, who are licensed by the state they practice in. Most CPAs are a jack-of-all-trades. Most CPAs audit financial statements for companies that are going public, or need them for some reason. Very few specialize in taxation.

Enrolled agents (EA), are licensed by the Internal Revenue Service to represent taxpayers through all levels of the IRS. All EA’s specialize in tax, taxation, tax planning, and representation, just to name a few.

Un-licensed accountants, typically work for a big tax chain. They take a six-week course and then work during tax season. Some other unlicensed accountants try to do bookkeeping for clients.

CPA’s and EA’s typically help small to medium-sized businesses. Those specializing in tax produce tax-basis financial statements in order to mitigate a client’s tax obligations and to show how a company is doing financially.

Accounting isn’t just recording debits and credits

Warren Buffett once said, “Accounting is the language of business.” As a loyal Buffett follower, I believe this is true.

Being an accountant has allowed me to transition from the corporate world to being a full-time a self-employed real estate investor. I am able to read financial statements, business proposals and quickly determine if the figures are reliable and if the project will be profitable.

I also use my accounting degree to prepare financial statements and loan proposals for banks when I am purchasing properties. I have had bankers tell me that my CPA license adds extra credibility when they are considering lending to me.

Accounting isn’t just recording debits and credits. Being able to understand the language of business opens doors for entrepreneurs and business-minded individuals.

Related: 18 Best Startup Books

Accountants speak a different language, one most people don’t instinctively understand

Accountants are typically known for being tax specialists or auditors however accountants also translate the financial transactions of a company to help tell a story of the financial health of the company.

For example, a company may have over 100 credit card transactions in a month but what do these expenses mean? How do they affect the profitability of your business?

Accountants don’t only help build the picture but they also provide tools to help understand the story they’ve written. These tools can be as simple as an asset turnover ratio to a system extension.

Accountants help identify the proper categorization and method. The expert accountant provides standardization, seamless systems, and understanding.