At its core, accounting is about recording the financial transactions of an organisation at a given point in time. To help an organisation do so, accounting has traditionally been divided into financial and management accounting.
Financial accountants present information to people outside the organisation such as investors or regulatory bodies, generally based on past performance. They prepare statements such as the balance sheet, income and cash flow statement according to accepted industry standards, known as generally accepted accounting principles (GAAP).
Management accountants, on the other hand, are more internally focused. The purpose of management accounting is to help an organisation’s leaders make informed business decisions. By collecting information such as revenue, cash flow and outstanding debts, as well as planning and tracking budgets across the organisation, management accountants produce a complete picture of the business.
Depending on the size of the organisation, the roles of management and financial accountants may be separate roles or integrated into one. In smaller companies, there may be some cross-over with commercial finance or analyst roles.
As an accounting graduate, you will gain an in-depth understanding of the organisation’s financials. During rotation, your responsibilities may include completing the end of the month accounting process, managing cash flow and tax obligations and producing reports. You will be expected to work to set deadlines with little room for error and set rules to follow.
If you specialise as a financial or management accountant, you will find your day-to-day work and skill requirements will vary.
As a financial accountant, you will be responsible for regularly preparing core financial information. You will sometimes need to explain complex financial situations to non-experts, so communicating well is important.
As a management accountant, you may gain more diverse skills by working with the planning and strategy teams. Being able to identify patterns in data and connect them to the bigger picture is critical.
As an accountant, there is a clear route for professional development and career progression. You will typically start as an accounting trainee, advance to mid-level and senior accounting roles, such as accounting manager, and then if you perform well, eventually, to partner or director level.
Most organisations will support your advancement by helping you to gain further qualifications such as becoming a Chartered Accountant. After several years of experience, you may decide to specialise further by working in roles such as payroll, accounts or tax. For more insights into accounting specialisations, read this article by GradAustralia.
Alternatively, you may decide to use your accounting skills as a launchpad for a broader career in business. If you decide to stay more strictly within the accounting profession, you will need to fulfil ongoing training requirements given the continually changing tax laws and accounting certification requirements.
Generally, an accounting career is more stable, relative to other sectors of the finance industry, and typically continues to be in demand during a recession.
However, it is worth noting that some larger multinationals are looking to outsource accounting jobs overseas and/or automate accounting processes. The consequences of this development remain to be seen.
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