Surely, there is only one type of accountant?
The answer to this question is No. There is a general idea that there is only one type of accountant and that they can all do everything. This could not be further from the truth.
Just like any other industry, there are many types of accountant and they are all specialists in certain aspects of the field of accounting. At the most basic level, the are three different types of accounting and therefore two specialists, let’s highlight the difference between monthly accounting and financial accounting.
Management accounting
This is a generic term with means that the accountant provides reports and information to the management of the company. This involves the day-to-day capturing of documents making up the monthly bookkeeping, payroll and tax. The month-end accounts are important so you can calculate your profit correctly. This gives an accurate idea idea of how the company is performing and to allow you to look at certain aspects of your business that guide in your management decisions. When these reports are accurate and up to date, they often highlight areas of the business that are generating higher profit margins or even areas that are making less profit (or even a loss).
Financial accounting (or reporting)
This accounting specialist does what the name suggests. They focus on provides an overall picture of your business at a certain point in time. This is mostly done at the financial year end. They commonly focus on te Annual Financial Statements (AFS) of the company. The AFS have to be “signed off” by a person qualified to do so. Depending on the size and structure of the business, this may be performed by an accounting specialist in this area. This may be a qualified accountant or possibly a chartered accountant (CA). Either way, the person is generally an independent person who provides an objective view of the accounts.
A further specialist is an auditor. This is a Chartered Account (CA(SA)) wo has specialised in auditing. Certain (larger or public) entities need to be audited.
Cost accounting
This is more of a specialised part of accounting than the other two above. This accounting specialist can have a further qualification in this area. This person is someone who focussing more on the cost side of things. This focuses on the running of the business in terms of the actual costs per product. This is important to make sure you are selling and buying at the right price. For example, You produce biodegradable food containers. You sell them for R 1.50 each. The cost accountant will make sure that process to make that product is correct to ensure the selling price is correct to attain the profit margins required by management. These accountants specifically focus on the system that produces the products manufactured.
Synopsis:
Depending on the size of your business, you may need one or all of these accounting specialists. The main concern is getting the reporting correct so that they can be submitted to the South African Revenue services for the various types of taxes to be paid. Once these reports are completed, they are submitted to SARS to be checked that all is in order in terms of tax.