What Does a Financial Accountant Do?

Financial accounting professionals are responsible for reporting an organization’s financial status. This involves collecting and maintaining financial data, detecting trends, and forecasting future needs.

Financial accountants also prepare detailed financial statements and communicate this information to company leaders and stakeholders. They work in corporate and business settings, public organizations, financial services firms, and private practices.

Learn about a financial accountant’s key responsibilities and skills, specializations, and their salary and job outlook.

Financial Accountant Duties

Financial accountants collect, organize, and analyze an organization's financial data. They prepare financial documents, reports, and disclosures, and communicate insights to departmental leaders, managers, and executives. Financial accountants also contribute to organizational strategy, especially with respect to investment accounting and resource allocation.

Of the many duties they carry out, these five are especially important:

Financial Accountant Areas of Expertise

While financial accounting is considered an accounting specialization, some professionals develop additional areas of expertise. Examples include tax accounting, cost accounting, international accounting, and internal auditing.

Tax Accounting

Tax accounting focuses heavily on tracking transactions, revenues, assets, and financial performance for the purposes of calculating tax liabilities. In business contexts, tax accounting specialists look closely at how money enters and leaves the organization, and at what funds are and are not taxable. They seek to minimize their employer's tax burden while remaining fully compliant with tax laws.

The GAAP methods used by financial accountants can have tax implications in some situations. For example, accountants may treat certain items and transactions differently for tax purposes as opposed to financial reporting purposes. Tax accounting specializations involve complex strategies that also engage financial accounting practices.

Common Job Titles

• Tax Accountant
• Tax Advisor
• Tax Consultant

Cost Accounting

To optimize their financial performance, businesses and public-sector organizations must keep close tabs on how and where they spend money. Cost accountants specialize in recording cost expenditures, documenting and analyzing them, and reporting facts and trends to decision makers.

Businesses make particular use of cost accounting methods, which they use as an internal means of tracking their financial health. Cost accounting specialists play an important role in helping managers and executives understand where and how it spends money, and how to optimize or reduce that spending to improve profitability.

Common Job Titles

• Cost Accountant
• Cost Specialist
• Staff Accountant

International Accounting

Multinational companies operating across jurisdictions are often subject to different accounting, reporting, and taxation standards than those with only domestic operations. For example, international businesses typically apply International Financial Reporting Standards (IFRS). IFRS differs significantly from the GAAP system used in the United States.

International accounting professionals have specialized knowledge, which helps them deal with these and other cross-jurisdictional issues. To become one, you need focused training and professional development in GAAP, IFRS, and other legal and compliance-related areas.

Common Job Titles

• International Accountant
• International Financial Reporting Specialist

Internal Auditing

Auditing is the process of analyzing data presented in financial disclosures and verifying that it is both accurate and complete. Large corporate entities and other businesses with complex accounting needs frequently employ internal accounting professionals to conduct internal audits. These specialists are known as internal auditors.

While internal auditing primarily functions as a form of legal and compliance assurance, it also has analytical implications. Internal auditors ensure businesses meet voluntary governance standards, and that they maximize their financial efficiency. They also play an important role in identifying and mitigating risk.

Common Job Titles

• Internal Auditor
• Internal Auditing Specialist or Manager
• Financial Analyst
• Financial Compliance Officer

How to Become a Financial Accountant

There are several paths to becoming a financial accountant. First, you must earn a bachelor's degree in accounting. Take as many financial accounting electives as you can. Some schools may even offer financial accounting concentrations.

Alternatively, you can earn a bachelor's degree in business, finance, or economics. Be sure to enroll in accounting elective courses or complete an accounting specialization if your school offers it. From there, you can build experience by pursuing accounting roles.

If you want to become a CPA, then you must complete a post-baccalaureate accounting certificate or a master's program in accounting to be eligible to take the exam.

If you wish to specialize in a particular area, such as taxation or international accounting, you can also pursue targeted graduate-level education. For instance, many schools offer master's programs in taxation.

A certified public accountant (CPA) can increase your earnings and establish expertise in the field. You can also pursue other relevant accounting certifications, such as:

• Certification in Risk Management Assurance
• Certified Internal Auditor
• Chartered Global Management Accountant

Financial Accountant Salary and Career Outlook

Accountants and auditors earned a median salary of $79,880 per year, according to the Bureau of Labor Statistics (BLS)

Finance specialists earned a slightly higher median salary. Accountants working in finance and enterprise management roles made a median annual salary of $83,250 and $82,620 per year, respectively.

The BLS projects 6% job growth for accountants and auditors from 2023 to 2033, which is faster than the average 4% growth for all occupations. The BLS also notes that accountants may increase their supervisory and analytical duties due to artificial intelligence and advanced accounting software taking on more routine accounting tasks.

Career Spotlight: Colin Smith, CPA

What initially interested you about the field of financial accounting?

The ability to work on challenging and interesting projects. I started my career as an auditor like many folks do, but auditing eventually felt repetitive and I didn't feel challenged enough. I'm a lifelong learner with lots of interests, so I tend to get restless if I feel like I'm not learning something new or worthwhile.

Over time, I noticed that I really enjoyed digging into the more technical areas of my audit engagements, and I even started working on valuation and litigation support projects, which is also highly technical work. It all finally clicked once I learned about financial accounting advisory job openings with the Big Four and realized there's an entire field of accounting that does exactly what I enjoy doing. That, and they don't tend to have the grueling busy-season hours that I grew tired of.

What education did you need to pursue a financial accounting career?

I graduated with a bachelor's degree in both finance and accounting. It's funny — accounting actually wasn't my first career choice, but the outlook for finance jobs was brutal during my last year of college (more on that later!), so I added my accounting degree as an insurance policy, and it worked! My education truly started after college, though, as my work experience is what really prepared me to be a financial accountant.

Working as an auditor helped me understand how each and every financial statement account works and got me comfortable with preparing financial statements and disclosures, while the business valuation work I did helped me fine-tune my [Microsoft] Excel and report-writing skills. I didn't realize it at the time, but that work experience ended up giving me the perfect skill set to land a job back in Big Four as a financial accounting consultant.

What was the job search like after graduating with your degrees?

Crazy! My last semester of college was Fall 2008, which, for those too young to remember, was the absolute peak of the Great Recession. It's easy to forget now with everything that's happened over the past few years, but the job market had completely collapsed and it was one of the worst times in history (at that time at least) to be entering the workforce as a new graduate.

I actually ended up applying to several non-accounting jobs in addition to several public accounting firms, probably 10 or 20 in total, but it all worked out as I ended up landing a job as a Big Four auditor.

What do you think helped you most on your journey toward entering this field?

Following my interests and leaning into projects and practice areas that I found interesting. Accounting can be a very challenging career path, but it makes a big difference if you can find an area or niche that excites you and keeps you hungry to keep learning and honing your craft.

What are some of the most rewarding aspects of working as a financial accountant? Some of the most challenging aspects?

That "aha" moment you get when you find the right answer always feels good, especially when it's a complicated transaction or highly technical area that you've never worked on before. But the absolute best feeling is when you hand over your workpapers and reports to the auditors and they don't come back with any questions. Auditors always seem to have questions, though, so this is pretty rare!

Managing competing deadlines can be challenging, especially if they're with different project managers or teams. I've found that the best thing you can do in these situations is just keep communicating with your project managers and see if you can find a solution together. Oftentimes, you'll find that someone else on the team has capacity and can take a few things off your plate, or a scaled-down work product may work just as well as what was originally planned.

What do you think is the most important skill financial accountants need to succeed?

If I can cheat with two answers here, I'd say project management and communication skills. You'll definitely need to know accounting and be proficient in Excel and your company's reporting tools, but you won't be expected to know everything right away and you shouldn't try to.

Financial accounting tends to be full of project-based work with multiple competing timelines. To truly succeed, focus on getting a clear understanding of your assignments and objectives from your managers, do high-quality work and complete it on time, and don't be afraid to raise your hand if you think something will prevent you from doing so. Your managers and bosses are there to help you grow and succeed and will appreciate proactive communication to help address issues, and it will let them know they can rely on you to meet deadlines.

What advice do you give to students considering this career?

Find the most recent 10-K issued by your favorite public company and read the whole thing, especially the MD&A (management discussion and analysis), the financial statements, and the related footnotes.

Financial accountants prepare most of these reports and do all the nitty-gritty work to make sure the numbers and disclosures are correct. If you find yourself curious about how certain disclosures were made, or how the whole thing comes together, then financial accounting could be a great career path for you. If it gives you a nails-on-the-chalkboard feeling, then maybe consider something else.

Colin Smith

Colin Smith is a certified public accountant and financial reporting consultant with over 14 years of experience advising public and private companies with a range of complex accounting projects. Colin also runs an accounting blog where he helps students and young professionals navigate the challenges of passing the CPA exam.

Colin is a paid member of the Red Ventures freelance Education Integrity Network.

Questions About the Financial Accountant Job Description