Every business needs accounting skills, if not an actual accountant. This makes accountants a valuable asset for any company who wants to be successful. A smart business owner knows that cash flow is crucial for the health of a company, and therefore financial literacy is a non-negotiable part of business. If you want to become an accountant, here are five skills that every accountant needs.
1. Revenue Recognition
Revenue recognition is a method of both identifying revenue and making sure it is accounted for. For smaller businesses, identifying revenue may be as simple as a transaction between the customer and the cashier, but many businesses utilize longer and more complicated processes when it comes to handling products and services. This means that revenue may not be counted when cash is received, but when an agreement is made and product is given to the customer. Conditions change depending on the contract between the business and the client. For the aspiring accountant, this means that an understanding of ASC 606 is essential, along with other generally accepted accounting principles, or GAAPs.
2. Time Management
Chances are that you will not have a simple, neat list of tasks that can be completed and checked off in order. As a professional accountant, you’re more likely to be working on several different tasks at the same time. This is especially true during certain times of the year when businesses are required to file taxes. When you’re working with so many tight deadlines, it is important that you’re able to manage your time wisely. While many industries can handle delays, mistakes on your part can wind up costing companies money, which in turn may cost you a client. Figure out what your work limits are, and try not to extend yourself beyond them. Being reliable can help you maintain a glowing reputation in this business.
3. Industry Knowledge
You may think that working with one small business is pretty much like working with any other, but you’ll quickly learn that this is not the case. Even if companies are of a similar size, different industries have different monetary requirements, and the way their cash flows can be vastly different. If you don’t understand the way their industry works, you won’t understand how they need their money to work for them. This makes it more difficult to spot discrepancies and potential cash flow issues down the line. This doesn’t mean you have to specialize in any one industry, but keep this in mind when you’re getting started. Businesses come to you, so it's important to establish yourself as an expert quickly.
Financial matters for any business are considered delicate. As an accountant, you are given access to private and important sets of data. Not only is it important for you to stay organized to keep up with your work schedule, but it is also important to secure your client’s data. With different sets of paperwork going in and out at all hours, even minor chaos on your desk can result in a grave error. If you see clients in your workspace, some disarray may make your client think you aren’t as capable as they first thought. A cluttered workspace can result in a cluttered mind, which can mess with your mental focus. A quick tidying session at the end of every day can make a big impact. However, don’t forget about your digital organization, either. While you’re at it, make sure you have a way of backing up and securing all your files.
There are multiple reasons why accountants should have strong communication skills. The first reason is that you may not always be working on assignments alone. Chances are, at some point you will work on a team that requires your input and cooperation with multiple people. Communication is crucial to working smoothly when so many individuals are contributing to the same project. Another reason why communication is so important is that your clients may not understand a lot of your work, and you’ll need to explain certain terms, regulations or requirements in a way that non-accountants can quickly and easily understand. Plus, opening up a channel of communication between clients can help you better manage deadlines and can help both sides be more understanding when issues arise.
Accountants are a crucial element of any industry, and their expertise can help businesses run more smoothly over time. If you work to master these skills, you’ll be well on your way to a long and successful career.