What do you picture when you think of an accountant? For a lot of people, it might be someone hunched over their desk, surrounded by spreadsheets, numbers and folders. Don’t get us wrong – some days can be like that! On the whole, however, the day to day reality is very different. Accountants are more than just number crunching machines; they play a critical role in ensuring businesses, individuals, and organisations are financially healthy and compliant with current laws and regulations. 

In this blog, we explore the various roles and responsibilities of accountants and how they can help you and your business thrive.  

The Basics of Accounting 

Accounting is the process of recording, classifying, and summarising financial transactions. In other words, the name of the game is financial management. Some of the main duties of an accountant include analysing  financial data, preparing financial statements, and ensuring that everything is compliant and above board when it comes to regulations, taxes, and industry standards.  

From financial accounting and managerial accounting to auditing and tax accounting, there are various different branches of financial management. As accountants can specialise in different areas, it’s important you do your research and choose the one that most aligns with your needs. 

The common goal between all areas is to provide you with accurate and timely financial information. 

Types of Accountants 

How do you know which accountant is right for you? We’ve broken down what different types of accountants do below: 

Financial Accountants: From preparing balance sheets and income statements to reporting on cash flow, financial accountants are primarily responsible for preparing the financial statements of a business. A lot of the time, their focus may be on end of year statutory accounts. This work is crucial for people such as investors and creditors who need to be able to assess the financial health of a business. Above all, financial accountants ensure you’re operating compliantly. Often, they’ll be external to the business.  

Management Accountants: For management accountants, their main duty is to provide businesses with support to help them manage their finances on an operational basis. Focusing on the internal processes within an organisation, management accountants help make informed business decisions by analysing cost data and budgets, evaluating performance, and developing business strategies. As their reports are mainly for internal use, management accountants don’t need to follow the same external standards expected of financial accountants.  

Auditors: Auditors review financial statements to ensure they are accurate and comply with accounting standards. They can also help to identify potential issues like fraud, mismanagement, or inefficiency. Though audits can be internal or external, the goal is always the same: to make sure companies are following proper accounting regulations and procedures. Auditors also need to consider whether or not the accounts represent a true and fair view, so that shareholders have transparency on how their investments are doing. Ultimately, having someone independently verify the financial statements are a true and fair representation of a business’ current situation can increase your overall credibility and provide clients and shareholders alike with the reassurance they need. 

Taxes: When it comes to taxes, most accountants will prepare tax returns as part of their position. Accountants are up to date with ever-changing tax laws and regulations, which means they can accurately provide advice on both personal and corporate finances. Aside from making sure you operate compliantly with relevant tax laws, a large part of an accountant’s job is helping to minimise your tax liability to take advantage of deductions and relief available to you. 

What do accountants do: key responsibilities  

So, what do accountants do? Here are some of the key tasks accountants perform: 

Preparing Financial Statements: Accurate financial statements that give a clear picture of a company’s financial performance are crucial. These reports – cash flow, balance sheet, income statement – give a snapshot overview of the company’s performance that enables stakeholders and directors to make informed business decisions.  

If you need a rundown of some of the key accounting terms mentioned throughout this blog, check out our list here. 

Financial Transactions: Whether it’s sales, investments, expenses, or other, accountants will track and record all financial transactions that occur within a business. In doing so, businesses remain organised, while also having clear information on their financial health. 

Budgeting and Forecasting: A large portion of accounting is often about planning for the future. For businesses that are looking to scale and grow, this is especially important. Through creating budgets and financial forecasts, business owners become more able to plan for growth, allocate resources to the right areas, and make strategic decisions. Without accurate budgeting, you could miss business opportunities. Worse still, you could end up using more money than is available and ultimately end up in debt. 

Ensuring Compliance: It’s no secret that non-compliance results in penalties and fines, often leading HMRC to launch an investigation into your company affairs which could mean legal trouble. Accountants are entrusted with helping businesses comply with regulations set by the government and industry standards. From preparing tax returns to adhering to financial reporting standards, accountants help keep you on track when it comes to legal requirements. 

Tax Planning and Filing: Tax accountants are responsible for calculating and filing taxes on behalf of an individual or company. As well as helping with the paperwork, they can ensure you’re aware of any compliant tax saving opportunities that may be applicable to you. 

Internal Controls and Audits: Performing regular audits is one of the best ways to verify the financial integrity of a company. Such internal controls also help keep transactions properly documented, prevent fraud and ensure accuracy of financial information. 

Financial Analysis: Want to know how to reduce costs and improve profitability? Accountants can analyse financial data to help you identify trends, risks, and opportunities. All of this insight brings you one step closer to achieving your long-term financial goals.   

Trusted advice & insight: Accountants often act as trusted financial advisors that can offer guidance on investment strategies and overall financial management. They help clients make sound financial decisions based on careful analysis of data so you get the peace of mind that you need.  

Why Accountants Are Important 

If you’ve read this far, you can probably see by now why accountants are so important in the business world. Aside from the numerous benefits they provide by performing crucial financial tasks that help keep you compliant and on top of your financial health, accountants provide a level of transparency and accountability that fosters trust between businesses, investors, and the public.  

With technology continuously evolving, online tools and accounting software are changing the game for how accountants work. Tasks like bookkeeping and invoicing are becoming more automated, allowing accountants to focus on high-level decision-making and intricate data analysis.  

If you’re looking for skilled help when it comes to interpreting data, providing strategic insights, and ensuring compliance, having an accountant on-board is a no-brainer.  

Accounting with Caroola 

At Caroola, the client journey is at the forefront because our accountants truly care about you and your business. Whether it’s VAT management and HMRC submissions or company formation and year-end filing, our team has the experience and knowledge needed to help you succeed. That’s why we pride ourselves on providing a first-class service grounded in compliance and a real culture of care, alongside our fantastic client perks.   

As such, our pricing is simple. With two different packages available for our sole traders and three for limited companies, we’ve tailored our services to meet your needs and give you the freedom to choose which suits you best. In addition, we provide you with a precise breakdown of exactly what’s on offer so that you’re paying for everything you need and nothing that you don’t.   

Our prices are reflective of our expert accountants who support you on your professional journey, be that with self-assessments, HMRC registration, year-end filing or tax reviews. What’s more, our packages also include use of FreeAgent, a software that aids streamlined and on-the-go business management. 

Get in touch 

Ready to start your accounting journey? Get in touch with our team of small business and contractor accountants today.