Introduction

"The success of a financial accountant is measured not by the simple totalling of debits and credits, but by the ability to understand the interaction of all elements of the financial system" - Robert Kiyosaki

Financial Accountant

A financial accountant is a professional who is responsible for preparing, examining, and analysing the financial records of an organisation. They are responsible for providing financial statements, such as balance sheets and income statements, to the management team. Financial accountants also analyse the financial performance of an organisation and provide financial advice.

What is the Difference Between an Accountant and a Financial Accountant?

An accountant is a professional who provides financial services such as bookkeeping, tax preparation, auditing and financial advice. A financial accountant is an advanced type of accountant who focuses solely on the financial aspects of the businesses they serve. They are typically responsible for preparing financial statements and reports, analysing and interpreting financial data, and providing strategic advice on financial matters.

A financial accountant’s tasks and duties will be determined by the specifics of their role, the requirements of their employer, and the type of financial accounting services they provide.

Basic Financial Accounting

Basic financial accounting is the process of recording, classifying, summarising, reporting and analysing the financial transactions of a business. It involves tracking the flow of money in and out of the business, and reporting any financial event that affects the business. Financial accounting helps business owners and other stakeholders make decisions about the company by providing accurate and timely financial information. Financial accounting includes activities such as creating financial statements, tracking sales, recording and tracking expenses, tracking inventory, and calculating and recording taxes.

Advanced Financial Accounting

Advanced financial accounting is the highest level of accounting and requires a very thorough understanding of both financial and accounting principles. Advanced financial accounting requires knowledge of international financial reporting standards, as well as the ability to interpret and analyse financial statements. It also requires a thorough understanding of accounting terminology and the ability to recognise the various aspects of a financial statement and how they are linked to one another.

A financial accountant typically works in an office environment. Their job involves analysing financial data, preparing financial reports, developing accounting policies and procedures, and providing advice on financial systems and controls. Financial accountants may work for public or private companies, non-profit organisations, or government agencies.

It is also possible to be a self-employed financial accountant – a position that calls for detailed knowledge of financial accounting, tax laws, and other financial regulations. Self-employed financial accountants must have strong organisational and managerial skills.

In order to become a financial accountant, it is usually necessary to have a minimum of two years of work experience in accounting, auditing, or finance. This experience should include developing and preparing financial statements, financial analysis, budgeting, and cost accounting. Additionally, experience with tax accounting, reporting, and compliance is also beneficial.

To become a financial accountant, candidates typically need to have a bachelor’s degree in accounting, finance, or a related field. You may also need to have additional certifications, such as becoming a Certified Public Accountant (CPA). Other qualifications may include experience with financial software, strong analytical and problem-solving skills, and a thorough understanding of Generally Accepted Accounting Principles (GAAP).

The most widely recognised qualifications for a financial accountant in the UK are the Association of Chartered Certified Accountants (ACCA) Qualification, the Chartered Institute of Management Accountants (CIMA) Qualification, and the Chartered Institute of Public Finance and Accountancy (CIPFA) Qualification.

The path to becoming a financial accountant typically begins with a degree in accounting or a related field such as finance or business. After completing the degree, the next step is to obtain a professional qualification, such as the Association of Chartered Certified Accountants (ACCA) or the Chartered Institute of Management Accountants (CIMA).

Once qualified, a financial accountant may progress to roles such as management accountant, auditor, or financial analyst. Salaries vary depending on experience and employer, but typically range from £30,000 for newly qualified financial accountants to £50,000 or more for senior roles.

Financial accountants looking to take their careers to the highest possible level in the field can pursue a broad range of ongoing development opportunities, such as:

• Pursuing a professional accounting qualification: Becoming qualified as a Chartered Accountant (ACA) or Certified Public Accountant (CPA) demonstrates a commitment to the profession and allows the accountant to stand out from the competition.
• Developing an area of expertise: Specialising in a particular area of accounting and developing a deep understanding of that area can help an accountant become a sought-after expert.
• Utilising technology: Financial technology (FinTech) is changing the way financial services are delivered and is becoming increasingly important for accountants to understand and use.
• Networking: Developing a good professional network can open up opportunities for new jobs and collaborations.
• Staying up to date with regulations and changes in the industry: Regulations and industry practices are constantly evolving, so staying informed can help accountants remain competitive.
• Pursuing continuing professional development: Continuing professional development (CPD) helps accountants to stay up to date with industry developments and to develop their skills.

A successful financial accountant may choose to branch out into a broad range of areas in the field of accountancy and finance. Possible job titles include:

• Financial Analyst
• Risk Manager
• Tax Accountant
• Investment Banker
• Financial Planner
• Financial Controller
• Corporate Finance Manager
• Business Analyst
• Data Analyst
• Investment Manager
• Auditor
• Financial Consultant
• Corporate Treasurer
• Financial Advisor
• Credit Analyst
• Actuary
• Management Accountant
• Portfolio Manager
• Hedge Fund Manager
• Compliance Officer

Just a few of the many benefits of pursuing a career in financial accountancy are as follows:

1. High Earning Potential: Financial accountants in the UK can earn an average of £45,000 per year, making it a highly lucrative career choice. This salary can increase significantly with experience and qualifications.
2. Professional Recognition: A UK financial accountant can become a member of a professional body such as the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW).
3. Career Progression: With experience and qualifications, financial accountants can progress to senior roles within finance and accounting departments or even move into other areas of business.
4. Job Security: Financial accountants are in high demand in the UK, with the need for qualified professionals expected to grow in the coming years.
5. Variety of Work: Financial accountants can be involved in a wide range of activities, from auditing and preparing financial statements to tax planning and managing investments.