WESTERN GOVERNORS UNIVERSITY
Developing Your Accounting Skills
Accounting Skills
Accounting, often regarded as the "language of business," serves as the backbone of financial decision-making for an organization. Accounting skills provide vital insights into a company's performance, profitability, and overall health.
Whether you aspire to become a certified accountant, a financial analyst, or a business owner, developing a strong foundation in accounting skills will help you navigate the complexities of the modern business world.
To obtain these skills, you need education, practical experience, and continuous learning. Pursuing a degree in accounting or a related field will equip you with a solid foundation in accounting principles and practices.
This guide explores accounting skills and provides valuable insights into their importance, benefits, and how to apply them in the workplace.
What Are Accounting Skills?
Accounting skills are the capabilities that enable you to manage and analyze financial data efficiently. This may include precisely recording, grouping, summarizing, and interpreting financial activities.
These skill sets also include cost management, tax planning, audits, financial reporting, and budgeting.
Accounting skills are essential if you intend to work in finance, accounting, and similar disciplines because they lay the foundation for making wise financial decisions, adhering to rules, and maintaining an organization's financial health.
Why Are Accounting Skills Important?
Accounting skills are vital in the workplace for several reasons. Let's delve deeper into their importance:
- Identifying financial discrepancies: Strong accounting skills are used to promptly identify and rectify financial discrepancies. By analyzing financial data, comparing records, and conducting thorough reconciliations, you can pinpoint errors, irregularities, or fraudulent activities. You’ll be able to maintain the accuracy and integrity of financial information, ensuring reliable decision-making and regulatory compliance.
- Financial control and compliance: Accounting skills are required to establish robust financial control systems within organizations. Knowledge of accounting can be used to design and implement internal controls to safeguard assets, prevent misappropriation, and ensure adherence to legal and regulatory requirements. By monitoring financial activities and conducting regular audits, you accountants maintain financial transparency, mitigate risks, and avoid penalties or legal complications.
- Resource allocation and budgeting: As an accounting expert, you assess financial data, analyze costs, and project future revenue streams. By creating accurate budgets, monitoring expenses, and identifying cost-saving opportunities, you assist organizations in optimizing resource allocation and maximizing profitability.
- Financial reporting: Your ability to prepare financial statements, including income statements, balance sheets, and cash flow statements, will enable you to assess your company's performance. As an accountant, you ensure compliance with accounting standards, regulatory requirements, and industry-specific guidelines, allowing shareholders to understand the organization's financial position and make appropriate judgments.
- Tax planning and compliance: Accounting skills are used for tax planning and compliance. Accountants navigate complex tax regulations, identify tax-saving opportunities, and ensure proper filing of tax returns. By using your expertise, you help organizations optimize their tax positions, minimize tax liabilities, and avoid penalties or legal issues associated with noncompliance.
- Risk management: Accounting skills contribute to effective risk management within organizations. You can assess financial risks, evaluate their potential impact, and develop risk mitigation strategies. You monitor financial indicators, identify emerging risks, and provide insights that inform decision-making processes to minimize financial vulnerabilities and maximize opportunities.
What Are the Benefits of Having Accounting Skills?
Accounting skills offer a versatile foundation that can benefit you in various professions such as banking, actuarial science, accounting, finance, etc. You can also use accounting skills for your personal financial management to achieve personal success.
Here are the advantages of having accounting skills:
- Versatility and job market demand: Accounting skills are in high demand across various industries and sectors, offering various career opportunities. According to the U.S. Bureau of Labor Statistics (BLS), the employment of accountants and auditors is projected to increase by 6% between 2021 and 2031. With strong accounting skills, you can qualify for roles such as financial analyst, auditor, tax professional, controller, and more. This versatility opens doors to different career paths and increases job market prospects.
- Increased financial literacy: Accounting skills enhance financial literacy, enabling you to understand and interpret financial information effectively. With a firm grasp of accounting principles and concepts, you can analyze financial statements, assess financial performance, and make informed decisions based on financial data. Financial literacy extends beyond the workplace, empowering you to manage personal finances, make sound investment choices, and navigate economic complexities confidently.
- Career advancement opportunities: Accounting skills are a foundation for career advancement within the financial and business sectors. By acquiring these skills, you can position yourself for promotions, increased responsibilities, and higher-level positions.
- Improved problem-solving abilities: Accounting skills develop your problem-solving abilities, particularly in financial and numerical contexts. Accountants are trained to identify and resolve financial discrepancies, analyze complex financial data, and solve financial challenges. You can apply these problem-solving skills in various professional scenarios beyond accounting, making you a valuable contributor in decision-making processes and critical thinking-oriented roles.
- Enhanced decision-making skills: Accounting skills enhance your decision-making capabilities regarding financial matters. With a solid understanding of financial principles, you can assess the potential impact of different choices on an organization's financial health and performance. You can weigh the risks and benefits, evaluate financial implications, and make data-driven decisions that align with organizational goals and maximize outcomes.
- Financial planning and personal money management: Accounting skills have a direct positive impact on personal financial planning and money management. These skills enable you to develop adequate budgets, track expenses, and plan for long-term financial goals. You can navigate tax regulations, optimize personal finances, and make informed investment decisions, which in turn improves your financial stability, wealth accumulation, and long-term financial security.
Examples of Accounting Skills in the Workplace
Accounting skills play a crucial role in various professions in the workplace. This may include accountants, financial analysts, auditors, controllers, finance managers, etc.
Here are various ways accounting skills are used in the workplace:
Cash Management
As an accountant, you’ll be responsible for managing cash inflows and outflows. You’ll monitor cash balances, prepare cash flow statements, optimize working capital, and forecast cash needs.
Tax Compliance and Planning
Accountants know how to navigate complex tax regulations, prepare accurate tax returns, and provide tax planning strategies to minimize tax liabilities. In this field, you’ll stay updated on tax laws and leverage your skills to help organizations comply with tax requirements.
Financial Systems and Software
Accountants utilize the software for bookkeeping, financial reporting, data analysis, and budgeting. Your familiarity with accounting software will enhance productivity and accuracy in financial management.
Compliance and Regulatory Reporting
As an accountant, you prepare financial statements, maintain audit trials, and provide timely and accurate regulatory reports to stakeholders and governing bodies.
Auditing and Internal Controls
Accountants conduct internal audits, assess financial controls, and identify areas for improvement. You’ll ensure the integrity and reliability of financial information.
How Can I Use Accounting Skills?
You can use accounting skills in various professional settings. These skills can help you know how to interpret financial documents, which can be quite useful even for your personal finance management.
Here are different ways you can use accounting skills:
- Accounting: As a public accountant, you can provide services to clients such as auditing, tax preparation, and financial consulting. Accounting skills are essential in conducting audits, analyzing financial statements, ensuring compliance with tax regulations, and offering financial advice to clients.
- Financial analyst: As a financial analyst, you can assess financial data, market trends, and industry performance to provide insights and recommendations for investment decisions. Accounting skills are vital in analyzing financial statements, evaluating financial performance, and forecasting outcomes.
- Forensic accounting: As a forensic accountant, you can investigate financial fraud, perform financial analysis, and provide litigation support. You can identify possible financial irregularities, conduct forensic audits, and present financial evidence in legal proceedings.
- Financial consulting: Your accounting expertise can be valuable in providing financial consulting services to individuals or businesses. These services may include financial planning, tax consulting, business valuation, and financial strategy development.
- Teaching and training: If you enjoy sharing your knowledge, consider a career in teaching accounting. You could become a professor in a university or offer training programs and workshops to professionals seeking to enhance their accounting skills.
- Entrepreneurship: Having accounting skills can be beneficial if you decide to start your own business. You can manage the business’s financial aspects, maintain accurate records, and make informed decisions based on financial data.
To explore more career paths where these skills are valued, we recommend checking out our career guides to find a career that aligns with your interests and aspirations.
How Can I Learn Accounting Skills?
WGU offers comprehensive programs that can help you learn essential accounting skills. We offer degrees such as a B.S. in Business Administration–Accounting and an M.S in Accounting that cover these skills extensively.
Through a degree program offered by WGU’s School of Business, you will learn to:
- Conduct financial reviews of month-end reports for accuracy to communicate discrepancies.
- Record the day-to-day financial transactions to ensure complete, accurate, and timely financial statements while reconciling discrepancies.
- Prepare financial reports in accordance with generally accepted accounting principles (GAAP).
- Develop business processes for financial systems.
- Conduct financial reviews of month-end reports for accuracy to communicate discrepancies.
Frequently Asked Questions
Continuing professional development is crucial for staying up to date with evolving accounting practices and regulations.
Accountants can pursue professional certifications such as the Certified Public Accountant (CPA), Certified Management Accountant (CMA), or Certified Internal Auditor (CIA).
These certifications validate accounting skills and enhance career prospects by demonstrating professional competence and dedication.
There are various career paths you can follow, after acquiring accounting skills. For instance, you can advance your accounting skills and become:
- Senior accountant: You’ll handle more complex accounting tasks such as budgeting, financial analysis, tax, etc. You can also supervise junior accounting staff.
- Financial analyst: You can transition from an entry-level accounting role to a financial analyst, where you analyze financial data and conduct forecasting, financial research, and even budgeting.
- Chief financial officer (CFO): This role is responsible for an organization’s overall financial strategy, risk management, and financial reporting to the organization’s stakeholders.
