Financial accounting professionals are responsible for the public reporting of a company or organization’s financial status. This involves collecting and maintaining data, detecting trends, and forecasting future needs. Financial accountants prepare detailed statements and communicate financial information to company leaders and stakeholders.
Auditing and managerial accounting are related to financial accounting, but the areas differ in several ways. Auditors usually work with companies to review financial accounting offices' reports. Management accountants provide accounting services and communication within a company, such as accounts payable, accounts receivable, and payroll.
Anyone interested in a financial accounting career should gain a solid understanding of industry standards. The generally accepted accounting principles (GAAP) are a set of guidelines that assist with reporting procedures. The international financial reporting standards help accountants create consistent financial statements for businesses across the globe.
Accountants should be able to create accurate balance sheets, profit and loss statements, and cash flow forecasts.
Financial Accountant Duties
Financial accountants work in many industries. Their responsibilities vary based on their organization's type and size.
Primary duties include preparing financial statements and reports and advising company leaders on investment practices and strategies. Financial accountants also communicate a company’s financial status with external audiences and stay current on the latest economic trends affecting financial decisions.
The following tasks provide examples of financial accounting responsibilities at all levels of employment.
- Handling Data: Financial accountants gather and monitor their organizations' financial data, including sales revenue, cost of goods, and other expenditures. This data makes it possible to complete other key financial accounting tasks.
- Preparing Statements: A career in financial accounting involves preparing different types of financial documents, such as balance sheets, income statements, and cash flow statements. These documents summarize financial performance for stakeholders, investors, and other parties outside the organization.
- Complying with Regulations: Successful financial accountant careers require understanding and complying with state regulations, federal regulations, and the industry's GAAP guidelines. These regulations help ensure ethical management of data, accuracy in statement preparation, and legal handling of funds.
- Advising Management: Financial accountants must understand their organizations' financial performance. Management teams often rely on this knowledge to help them make business and investment decisions. Financial accountants may advise managers on applicable forecasts and risks.
- Preparing Budgets: Some financial accountants help prepare budgets for the entire organization or for specific departments. Budget preparation requires an understanding of an organization's goals, estimated income, and forecasted expenses.
Key Hard Skills for Financial Accountants
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Working with Financial Statements
The most obvious hard skill required for a successful financial accounting career is understanding key documents. Financial accountants need to know how to create, read, and analyze statements. -
Attention to Detail
Accuracy is of utmost importance in accounting, where mistakes can be time-consuming and costly. Financial accountants need to know how to spot inconsistencies or errors across their reports. -
Financial Forecasting
Businesses use predictions of future revenue, expenses, and cash flow to inform budgeting and investor decisions. This critical financial skill requires accounting for risk and careful analysis of current and historic cost data. -
Technological Literacy
All accounting professionals, including financial accountants, must know how to work with computers and the latest industry software. This career requires working with spreadsheet software, business intelligence software, and cloud-based software.
Key Soft Skills for Financial Accountants
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Clear Communication
Financial accountants often act as interpreters of business data. Strong communication skills are needed to share key information with coworkers, stakeholders, and consumers with varied levels of accounting knowledge. -
Collaborative Approach
Financial accounting professionals often work in teams. Approaching projects with a collaborative mindset allows financial accountants to produce accurate work in a timely manner. -
Critical Thinking
Critical thinking allows us to make better decisions, identify problems, and find effective solutions. Financial accountants apply critical thinking skills when planning future budgets, analyzing data, and evaluating financial strategies. -
Lifelong Learning
An enthusiasm for new knowledge is well-suited to financial accounting jobs. As organizational policies, legal regulations, and required technology change over time, financial accountants must remain proactive in learning new things throughout their career.
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Financial Accounting Jobs
Professionals can secure financial accounting jobs across industries including banking, business, government, and higher education. Consider tailoring your career to meet the needs of one of these in-demand fields.
Banking
At banks and credit unions, financial accountants focus on general ledger activity. They ensure the accurate, legally compliant recording of financial transactions. Financial accountants prepare important monthly, quarterly, and annual reports that provide performance information to tax authorities, investors, and customers.
Banking accountants must be able to collaborate with departments across the financial institution. Entry-level candidates typically start with the role of accountant I and gradually progress to accountant II and III positions. Financial accountants report to accounting managers and to the bank's financial controller.
Common Job Titles
- Financial Accountant
- Financial Staff Accountant
- Financial Accounting Specialist
- Senior Accountant
Business
Financial accountants work in nearly every business industry. Top employers include accounting and payroll services, management of companies, and real estate. Businesses rely on financial accountants to produce key financial reporting documents, share information with stakeholders, and ensure legal compliance and accuracy in tax reporting.
Depending on the size of the business, financial accountants may work independently or on teams. Entry-level financial accountants typically report to senior accountants. With experience, financial accountants working in the business sector may progress to senior or management positions like financial controller.
Common Job Titles
- Financial Accountant
- Financial Reporting Accountant
- Staff Accountant
- Financial Accounting Associate
Government
Financial accounting plays a key role in government, where many stakeholders — including elected officials, citizens, and other organizations — expect transparency in revenue and spending. The annual financial reports financial accountants prepare are among the most important government communication tools.
Financial accountants employed in local and state governments support budgeting, forecasting, legal compliance, and information-sharing efforts. Candidates typically start in an entry-level financial accountant role, reporting to senior financial accountants. With experience and strong performance, employees can progress to financial accountant II and III roles.
Common Job Titles
- Financial Accountant
- Financial Accounting Associate
- Financial Reporting Accountant
- Grant Accountant
Education
Higher education institutions spend and receive significant sums of money, including student fees and tuition, financial aid payouts, and facility expansion and maintenance. Financial accountants working in education help produce key reporting documents on assets, cash flow, revenues, expenses, and liabilities.
Job duties vary depending on the accountant's departmental focus. They may work in financial aid, payroll, a specific college or school, or in a broader position with shifting responsibilities. Entry-level professionals interested in a financial accounting career in education may start as a junior accountant or financial accountant I.
Common Job Titles
- Financial Accountant
- Financial Aid Accountant
- Financial Reporting Accountant
- Accountant
Career Path Toward Financial Accounting
A career in financial accounting requires a bachelor's or master's degree in a relevant field such as accounting, finance, business, or economics. A bachelor's takes four years of full-time study to complete. A master's usually takes an additional two years of full-time study. Entry-level job opportunities usually require 0-5 years of related experience.
A career in financial accounting requires a bachelor's or master's degree in a relevant field such as accounting, finance, business, or economics.
Though not a necessity in every workplace, some financial accounting jobs require candidates to hold CPA certification. In most states, becoming a CPA requires 120-150 credits of college coursework and completion of an exam. Some states also require a minimum age limit, U.S. citizenship, and an ethics exam.
Learn the steps toward becoming a financial accountant
Salaries and Outlook for Careers as a Financial Accountant
A career in financial accounting offers lucrative returns and steady job security. According to February 2022 Payscale data, financial accountants earn an average annual salary of $56,360. From 2020-2030, the U.S. Bureau of Labor Statistics projects a 7% employment growth for accountants across all disciplines.
Common factors impacting income potential include geographic location, industry, years of experience, and educational attainment. Accountants working at a bank in a large city center, for example, typically earn more than those employed at a government organization in a rural area.
Career Spotlight: Colin Smith, CPA
"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."
–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 4 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 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 4 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 financial crisis. 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 4 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 CPA and accounting consultant specializing in financial accounting and reporting. Colin spent most of his 14+-year career with Big Four firms and recently started his own consulting practice, where he assists public and private companies with their most challenging financial accounting and reporting issues.
Questions About Jobs in Financial Accounting
How much does a financial accountant make?
Payscale reports that financial accountants earn an average annual salary of $56,360 as of February 2022. However, earning potential varies based on factors like location, experience, and education.
What are the objectives of financial accounting?
Financial accountants keep track of their organizations' financial operations. Responsible for maintaining financial accountability, they oversee areas like payroll, taxes, and spending. They also provide reports to management and investigate financial discrepancies.
What is the difference between financial analysts and financial accountants?
Financial analysts deal with overall company finances, working to improve profits through investments and financial forecasting. Financial accountants keep meticulous records, engaging more in a company’s day-to-day financial tasks such as tax filings, financial statement preparation, and budget analysis.
What are the job requirements for a career in financial accounting?
Employers typically expect financial accountants to hold a bachelor’s degree in accounting or a related field. Some employers prefer applicants with a master’s degree and CPA credentials.
