Let’s talk about financial accounting
Do you have an eye for detail, a head for research and a natural affinity with summarising? Are you a commerce or finance undergraduate student? Then you are in the right place. There is an amazing opportunity for you in the technical branch of accountancy. We are talking about financial accounting, and how it could be the right career choice for you.
So what is financial accounting? This specialized field utilizes your natural talent and expertise to their maximum potential. Therefore, leading to a satisfying and rewarding experience for you.
This branch of accounting involves efficiently collecting, processing and summarizing the financial transactions of the company you work for. You are responsible for preparing financial statements, balance sheets and cash flow statements over a period of time. You also have to work on outlining the important details about the company’s fiscal achievements.
To get the job done, you have to use standardized formatting methods. Your job is to analyze and present this critical information intelligently and legibly. The annual financial statement is an essential documentation of the firm’s performance for that year. It is read by employees, clients, financial investors, vendors and anyone who wants to know if the company is solvent and successful.
Here are some of the features of financial accounting:
- The accountants prepare financial, legal and tax-related documents
- The financial reports must include the company’s income, assets, expenses, liabilities and equity
- The records must be systematically organised so that they are legible and easy to comprehend
- The reports can be created monthly, quarterly or annually, depending on the requirements of the company
- Balance sheets are used to assess the assets and liabilities of the firm
- The reports are used to inform people within and outside of the organisation about the net profit of the company
- These records can help the company raise capital, apply for loans or create a valuation
- Private companies, government organisations and financial firms all have a financial accounting department to work for them
Three types of financial accounting
1) Cash accounting
The accountants prepare financial statements that deal with the cash-based transactions by the company. You have to analyse the various activities within the organisation that is responsible for the cash flow.
2) Income statement
Another name for this type of financial accounting is the profit and loss statement. You are required to record the expenses and earnings of the company within a certain time frame. You need to show if there are any losses incurred as well as the profits.
3) The balance sheet
Here, your responsibility is to effectively list the liabilities and assets of the company along with the owner’s equity.
What does it take to be a financial accountant?
Have we persuaded you to grab this opportunity? Great. Now you need a specific set of skills and academic qualifications to join this branch of accounting. Such as:
- A degree or certification from a reputed accounting organization
- Good understanding of business functions
- Ability to deliver as per deadlines
- Advanced working knowledge of software like Excel, financial tools and reporting methods
- Good verbal and written communication skills
- Knowledge of statistics and the ability to analyse financial data
How the ACCA course can help you get there
You’ve probably already heard of the ACCA program. It is a globally recognized organization founded by the association of certified chartered accountants. You’ll find they have a presence in over 180 countries. The ACCA diploma in financial and management accounting is a certification that helps you learn the technical prowess and academic background you need. The course has an intensive, knowledge-packed syllabus that gives you the required skills and proficiency. After completion, you can apply for the financial accountant position in several companies in India and abroad. When you study for the ACCA, you are up to speed on the latest techniques and recent industry developments. You acquire knowledge about basic accounting principles as well as advanced concepts. You learn to apply that information to real-life situations through specific skill-training sessions. The program also helps you hone your interpersonal skills, which in turn, enhances your technical capabilities.
The ACCA course details
Let’s get down to the brass tacks. As mentioned earlier, the curriculum provides the essential training you need for advanced financial accounting. The course will teach you the process of preparing and analysing financial statements for companies. You will learn the correct technique to write the reports. You will also be taught the correct method used to document business transactions. Your education will also train you to spot financial errors and rectify them.
Once you have learned all of this to the best of your abilities, you will be ready to take the financial accounting exam. The ACCA subjects include:
- The objectives of financial reporting
- Processing and analysing financial statements
- Learning how to find errors and fix them
- How to use double-entry bookkeeping to record credit and debit accounts
- How to use accounting systems
- Qualitative properties of financial data
You can also apply for the IFRS course
While the ACCA program adequately prepares you to pursue financial accounting, you may also need to enhance your training. The IFRS is an accounting regulations board set up by the International Accounting Standards Board (IASB). They aim to create a uniform code of financial statements across various countries to promote universal transparency and consistency. When companies actively try to raise capital aboard, they need financial statements to comply with the international standards. Employees trained in IFRS can help these firms achieve their goals by adhering to the global norms and criteria. If you take this program alongside your ACCA course, it will boost your career significantly.
The bottom line
All companies need financial accountants. There is a huge demand for them. If you have the necessary skills, the academic qualification and the aptitude for processing financial information, then this is the ideal career for you. It takes professional training to reach a level of competence required for the job. The ACCA diploma will ensure your performance is on par with the industry standards. The IFRS certificate will enhance your existing skills. Both courses together will act as a stamp of excellence that will make potential employers sit up and take notice of your resume.