9 Types of Accounting (Plus 5 In-Demand Accountant Careers)

 


9 Types of Accounting (Plus 5 In-Demand Accountant Careers)


Interested in a career in finance, but not sure which job is best for you or how to start preparing?

We're here to help!

Accounting is an essential part of any organization. If you're considering a career in accounting, it's important to know what types of accounting are available based on your industry. This article explains the different types of accounting fields available and the career options available to professionals interested in accounting.



Types of Accounting

Accountants can specialize in different types of accounting, depending on their professional interests and goals. Here are the 9 most common accounting types:

 

1. Financial Accounting

Financial accounting is primarily concerned with the process of compiling financial information for external reporting. Financial accountants work with colleagues and managers to develop strategies to increase business profitability. 

In addition, we track all financial activities recorded in the general ledger and ensure that internal procedures are followed and all financial activities are reflected in the relevant financial statements. Financial accountants typically handle revenues and expenses, including monitoring and participating in the general ledger.

Accounting, accounts payable, accounts receivable, payroll, subsidies, fixed asset management. Financial accountants are responsible for accurately recording and reporting financial transactions that have already taken place. 

Financial accountants are concerned with compliance and must follow Generally Accepted Accounting Principles (GAAP) for U.S. companies and International Financial Reporting Standards if the company has operations overseas. In general, financial accountants must pay close attention to detail in order to communicate the current financial situation to external sources.

 

2. Managerial Accounting

This type of accounting document controls and supports an organization's financial planning. Their documentation is typically aimed at insiders rather than the general public. 

Management accountants must be careful about when and with whom they share sensitive information. They work with managers to analyze and create budgets to meet the needs of the organization's short-term and long-term goals. Management accountants analyze past performance to predict future performance.

 

3. Cost Accounting

Cost accounting can be considered a subcategory of management accounting. However, the activities of cost accountants affect both financial accountants and management accountants. Cost accountants are responsible for documenting, presenting, and analyzing manufacturing costs. They monitor all variable and fixed costs to ensure that production is in line with the cost of producing the product. They also work with managers to make future decisions based on financial forecasts and production progress.

How unit costs are calculated also varies by industry and similar businesses.

The cost accountant is responsible for implementing, monitoring, and providing feedback on how these costs are tracked. The main question is how to allocate overhead costs. Direct materials and direct labor are easy to track, but so are indirect costs such as equipment, buildings, utilities, and general staff. You can also distribute it in other ways. You can also use a cost accountant to determine actual costs. 

Just as you assign overhead costs to products and services to establish unit costs, you can assign departmental costs and overhead costs to employees to determine the cost of employing them compared to what they report. You can decide. This can be used for employees whose income is tied to their position, such as sales representatives or health care providers.

 

4. Auditing

External auditing is the act by which a company provides financial documents to a third party for financial feedback. In this case, the third party becomes an authoritative source of information regarding the compliance of the company's financial statements with GAAP. External audits are conducted by certified public accountants (CPAs). Internal audit determines the effectiveness of internal accounting processes.

Internal auditors may review the department's employee responsibilities, management policies, and related project approval procedures. Moreover, it provides useful feedback that helps you increase the profitability and efficiency of your business. Because internal auditors are an internal role, qualifications vary. Accountants can become Certified Internal Auditors (CIA), and some public companies and government agencies may require internal auditors to hold this designation.

 

5. Tax Accounting

Tax attorneys help businesses comply with the Internal Revenue Code when filing taxes each year. It also helps businesses plan for future tax filings, such as avoiding certain tax obligations or understanding the consequences of certain tax decisions. Large organizations typically hire tax accountants to help them understand the intricacies of financial reporting.

 

6. Accounting Information System

An accounting information system (AIS) is a system by which companies collect, store, and process financial and accounting data. Many AISs today are designed to integrate with other services, such as connecting a human resources department's recruitment process to payroll functionality for newly hired employees. This end-to-end process minimizes manual information entry. 

AIS professionals manage the improvement of appropriate accounting procedures. Employees in this field determine the best time to install the latest technology and monitor the progress of existing systems to determine whether productivity increases over a period of time. Collaborate with IT to make decisions and ensure process continuity. We also often provide technical assistance with AIS maintenance, such as creating new accounts within the system and troubleshooting software bugs.

 

7. Forensic Accounting

Forensic accounting is used to examine the financial statements of individuals or businesses. If some information is missing or inaccessible, your accountant may need to reconstruct your financial information. The goal of forensic accounting is to gather all available documents and accurately and completely record all transactions in financial statements. These professionals often intervene in contentious cases involving fraud, claims, and litigation.

 

8. Public Accounting

A certified public accountant is a company that provides accounting advice according to customer needs. They conduct audits, assist with tax returns, advise on the proper steps to install technology and computer programs, and provide legal advice.

 

9. Governmental Accounting

Government accountants manage financial planning and resource allocation between local, state, or federal government departments. This type of accounting is subject to standards that must be followed by the Government Accounting Standards Board (GASB), which is responsible for developing consistent accounting procedures for local and state governments. Federal employees are subject to the requirements of the Federal Accounting Standards Advisory Board (FASAB). Government accountants also monitor government budgets and allocate funds accordingly.

 

What do the Different Types of Accounting have in Common?

These different types of accounting focus on different aspects of business and even different types of business, but all of these areas include:

• Respect certain standards.

• Stick to the facts.

• Emphasize ethical processes.

The main characteristic of accounting is to serve the public interest by accurately reporting the financial situation of a company. Regardless of your position, the standards you meet, or who you work for, it is important for all accountants to do their job accurately.

 

Related Accounting Careers

Here is a list of jobs that accountants can perform.

1. Staff Accountant

National average salary: $54,662 per year. 

Key Responsibilities: Full-time accountants ensure the maintenance and control of an organization's financial records and budget under the direction of management or a certified public accountant. They often enter journal entries and data into accounting information systems and monitor the accuracy of activities within the system.

 

2. Payroll Accountant

National average salary: $57,526 per year. 

Key Responsibilities: Payroll professionals are responsible for carrying out compliance responsibilities within an organization. They report all financial activities of a company's employees to local, state, and federal governments and deduct the correct amount of taxes from each employee's paycheck. Learn about Best Payroll Software Solutions 

 

3. Tax Accountant

National average salary: $63,499 per year. 

Key Responsibilities: Tax accountants provide tax preparation advice to help businesses save money by filing taxes correctly and timing financial transactions. Ensures your company is compliant with federal, state, and local taxes.

 

4. Auditor

National average salary: $57,661 per year. 

Key Responsibilities: Auditors ensure that financial records are accurate. Internal auditors may conduct random or periodic audits to verify compliance with internal policies and make policy recommendations. External auditors are certified public accountants who typically perform routine on-site reviews in accordance with the audit plan.

 

5. Financial Accountant

National average salary: $63,787 per year. Key Responsibilities: Financial accountants ensure that financial transactions are accurately recorded and reported. You often work with the general ledger by entering journal entries and monitoring those entries. You can also ensure that sensitive tax information is properly documented. It also discloses financial information to stakeholders and monitors internal transactions accordingly.

Tags

Post a Comment

0 Comments
* Please Don't Spam Here. All the Comments are Reviewed by Admin.