The concept of business has been around since ancient times, when bartering was used to trade goods and cylindrical tokes were used for bookkeeping on clay scripts to record the growth of crops. The methodology for accounting is constantly evolving. Cylindrical tokes and bartering have been replaced by computers and trades in stock market.
What is important to recognize is that while the means of recording data can adapt based on the availability of technology, the passion, knowledge base and analytical skills required to be an accountant cannot be improved by technology – this is something that can only be achieved through education, willingness and ability.
The importance of an accountant is often overlooked by businesses. Businesses tend to view accounting as an expense rather than an investment. Technology is seen as one of the most important tools to incorporate in a business’ operations in order to be successful and productive. However, the use of the most advanced technology in accounting means nothing without a proficient accountant.
There is a great responsibility to those who have chosen accounting as a career. Being an Accountant requires big commitments such as continuing education to enhance knowledge as regulations continually change and passion for the career knowing that a company’s finances are in their control. An accountant possesses the ability to interpret and analyze financial statements. For example – understanding why profitability at a certain point may have increased or decreased. Accountants need the analytical skills to be able to view financials and know if any entries have been made in error. Consequently, based on the skills and abilities of an accountant, businesses are required to rely on accountants for business profitability and growth.
Many small businesses and start-ups opt to do their books themselves rather than hiring an accountant in an attempt to reduce costs. In reality, this can be a costly decision if the books are managed by an individual who lacks knowledge and expertise in accounting. A minor error on a tax return can cost a business a significant amount in IRS fees. In addition, an individual without a background in accounting may not be able to provide management with insights regarding the financials and the trends within the business. As a result, business owners may have a very skewed portrait of where the company is headed. Accountants are critical for cash and expense management.
Overall, successful businesses acknowledge that accounting is an investment to a company, not an expense. Technology can present a company with a jigsaw puzzle, but a business needs an accountant to solve it.