All about 'Financial Accounting'

This is a guest post by Dr Uma Ganesh, she has an MBA degree from the Faculty of  Management Studies, University of Delhi and a PhD from IIT Bombay and is the CEO of Global Talent Track.

Common FAQ’s : Financial Accounting.

1. After having done graduation or post graduation, how could I put to use my knowledge in accountancy?



           

After completing a Bachelor’s or Master’s Degree, a person can choose to work with companies in various domains like manufacturing, services, banking, to name just a few. Most of the accounting jobs involve financial accounting for various entities, audits,  handling various back office operations like bank accounting and reconciliation Accounting in computerised environment called ERP, Bank and insurance company processing for deposits, premiums and claims,  salary processing, balance sheet, handling purchases and sales. 

With many companies deciding to outsource their entire accounting operations to India either directly or to specialised Indian companies, huge number of jobs have been created in these companies. Accordingly the opportunities to a young accountant has increased manifold. The other option is to go for professional courses like CA, CS and ICWA.

2. What would be the nature of work involved in financial accounting?

Accounting or financial managers are those responsible for overseeing and maintaining the financial transactions and managing the cash flows of a company. The accounting manager is focused more on recording of all transactions and converting them into meaningful financial statements, while the finance manager is focused on money management, budgeting and strategy.  Some of the job profiles that a person can choose from are:

Auditor



The work of an auditor involves examination of accounting of ledgers and financial statements of the organization and the opportunities exist in statutory audits, internal audits, tax audits and other special audits carried by CA firms.

Budget Analyst

Budget analyst develops and manages an organization’s financial plans. There exist extensive job opportunities in this area in the private sector as well as in the public sector.

CashManagers



A Cash Manager is responsible for overseeing and controlling cash flow, both Accounts Receivable (AR) and Accounts Payable (AP). He or she is also responsible for ensuring that the cash position of the company is sufficient to meet current and forecasted needs, or whether adjustments in investment quantity and type are necessary.

Financial Accountants

Financial Accountants prepare financial statements based on ledgers and are engaged in significant financial decisions involving mergers & acquisitions, planning and long-term financial projections.

ManagementAccountant



Management Accountants participate in judgments about capital budgeting and business analysis. Their job profile consists of cost analysis, analysis of new contracts and participation in efforts to control expenses efficiently.

TaxProfessional



Tax professionals prepare corporate and personal income tax statements and formulate tax strategies. This kind of work requires an extensive knowledge base of economics and current tax law sand rules.

3. What kind of companies would like to hire those specialising in financial accounting?

Companies that would like to hire financial accounting specialists includes:

ü      Business Process Outsourcing (BPO) with back offices performing F & A processing

ü      IT companies in the BFSI domain

ü      Knowledge Processing Outsourcing (KPO) industries

ü      Accounting firms

ü      Auditing and compliance firms

ü      Consulting firms

ü      Any large or medium or small company which has accounts department

4. What are the typical activities expected to be handled by the Financial Accounting Specialist in the outsourcing firm?

Common work activities for an F & A professional include the following:

• Entering data regarding taxes, sales, profits, bills payable and other transactions in a timely fashion.
• Preparing and paying local, state or federal tax returns for large corporations or preparing and discussing tax returns for private individuals.
• Balancing accounts on a daily, weekly or monthly basis.
• Preparing financial statements on either a regular schedule or when requested.
• Ensuring all financial practices are legal and within guidelines as outlined in federal or state laws.
• Participating in budget and planning meeting with individuals or business to provide necessary information and recommendations for investments or financial opportunities.

5. How do I know whether I have the potential to meet the expectations of the industry?

Knowing accounting practices alone is not enough. Some other skills that an employer would expect every employee to have include

ü      Customer service orientation

ü      Basic computer skills

ü      Basic knowledge to work on an ERP (enterprise resource planning) system

ü      Soft skills- communication skills, telephone etiquette, business writing skills, team work etc.

6. How can I develop my capabilities to be eligible for employment?

Though formal education in commerce stream both at school and graduation level gives the students a background of accounting up to making a balance sheet and brief introduction of commercial laws, it does introduce practical concepts like accounting in computerised environment like tally or other ERPs nor does it give exposure to simple tax rules like tax deduction and returns . So further practical training is required for understanding how to convert existing knowledge into practical work