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But bookkeepers still exist. They are people who, simply, record information in financial records.
An accountant, however, is a person who should have a good understanding of a system of records. He or she is a person who is able to analyze and interpret business transactions. To an accountant, bookkeeping chores are quite simple, although to people not in the business simple bookkeeping is often enough to drive them right to the accountant’s office. It all depends on your perspective. Briefly, though, a bookkeeper is to an accountant as a nurse is to a physician; they work together and are, in some areas, interrelated. But the doctor is the one with the higher training and more complicated skills.
Often, though, accountants begin their careers doing book-keeping. If, for example, you aim for a job in accounting and, after joining a firm as a junior accountant, you are given bookkeeping chores-don’t feel bad. An accountant must know and understand the work of the bookkeeper. It’s all part of the training on the road to becoming a specialist.
Because that’s what an accountant is: a specialist. He or she is skilled enough to comprehend the whole accounting process and procedure and to decide what financial decisions are right or wrong for a certain type of business.
Sound complicated? Well, it is. And that’s why accountants often study for years to become skilled in their craft. Because accounting today has become much more than balancing the books and managing accounts. These days, an accountant is an important adviser to management, so important that sometimes these advisers become management; accountants take over companies as the boss because their skill and knowledge are so great.
But now, let’s meet some accountants.
Alex is a managerial accountant-a private accountant who’s been hired by a company with the understanding that someday he might become a part of the company management. Alex has high hopes. He has studied hard, and the company bosses are already aware that Alex has skill and managerial ability. And so they are “grooming” Alex to, perhaps, someday take over the business when they have retired. In a sense, it’s like school all over again; the company bosses are tutoring Alex for a management position because he is so promising. It’s like trying to get into college.
When Alex was hired by this company, he began by learning all aspects of the business. He got to know other people who worked there. He had to gain an understanding of the company’s products, its equipment, its plants, its research. His bosses gave Alex chances to handle management responsibility. In the process, he learned administrative skills that his bosses thought made him “management material.” Of course the story has a happy ending. Today Alex is vice president of the company.
Arlene is a controller, and she is responsible for the records of her company’s operations. She is the chief accounting officer of her business, a manufacturer of men’s sporting equipment. Arlene uses the company records to measure the business’s performance, to interpret results of its operations, and to plan and make recommendations for action. Action for what? For more profits, of course.
It’s interesting to note that alongside Arlene a number of bookkeepers and junior and senior accountants are working. Of course Arlene treats them particularly well; she started out as a bookkeeper and became first a junior and then a senior accountant.
Not only is she concerned with the present state of the business, but also she concentrates on its future. And her advice and interpretations of the records deal not only with finances, but with people and profits, sales and products, equipment and material. Obviously, Arlene has to be familiar with every aspect of this big business. And because the scope of her job is so wide, she is in constant contact with other executives of the company. Actually, Arlene is an executive. Like the vice president and president of the company who respect her talents so much, Arlene too has many chances to exercise her imagination and judgment. She has made many important contributions to the company.
Rick is what is called a cost accountant. His job is mostly concerned with the unit cost of goods manufactured and sold. He works for a giant dress manufacturer that makes sixteen different types of women’s dresses and skirts. Into each item go hundreds of various sized and priced components-everything from thread to zippers. The dress company’s sales office must know the production cost of each item (for instance, a miniskirt or a housedress) so that the sales office can set a sale price that will make a profit for the company. And so they call on Rick. He studies each dress, figures the cost of every button and bow, and soon arrives at the production cost of each item.
Rick’s job as a cost accountant and a job as a general accountant are closely related. General accounting is usually concerned with the overall accounting process; it gives management financial guidance. Cost accounting, usually an office under the general accounting branch, classifies, records, and interprets the material, labor, and expenses necessary to manufacture and sell each product. And that’s just what Rick does.
This type of business would also require the services of a public accountant, even if just to prepare the yearend tax returns.