A well-structured and organized back office plays a crucial role in building any business. It looks after your finances, interprets financial records, and prepares and maintains financial reports.
It is even more necessary for a small business since 82% of small businesses fail due to poor financial management.
Companies have a separate financial department that takes care of all the costs, payments (whether through ach payment processing, check, cash or card), and budgeting, among other responsibilities.
It’s a well-known fact that COVID-19 has led the world to a financial crisis, and now it’s more important than ever to hire an accountant to properly manage your finances.
Before getting to know how accountants are crucial to industries and how they can increase revenue, let’s talk about the advanced degrees in accounting and how you can be of more value to a firm after getting one.
Advanced Degrees in Accounting
Advanced degrees can help you be more successful in your career. After your bachelor’s, you can go for a master’s or Ph.D.
A master’s in accounting can help you secure a lifelong career as a CPA or any other financial professional. If you want to upscale your position, a master’s in accountancy is the way to go. A broad range of courses is offered in the master’s program, including business law, communication in management, and advanced areas in financial reporting. After graduating, you can take the CPA exam and find better positions in your current workplace or look for a suitable position in a well-respected firm such as TN CPA, or a similar organization.
Ph.D. is for those students who have a deep interest in research. You are required to write a dissertation or complete a doctoral project. Courses offered typically are all research-based, including accounting theory research, empirical research design in accounting, financial accounting theory, and tax research.
Getting an advanced degree is always helpful as you gain deep knowledge of your subject, analytical skills, and can find ways to work with the latest technology.
Now let’s discuss some major industries which require accountants to speed up their game.
Fashion Industry
The fashion industry deals with a high number of transactions every day, and to keep track of finances, you need to closely monitor daily activity. An accountant can help monitor cash flows by keeping track of payroll, cash transactions, and cash transfers.
When you are working in the clothing industry, sales are volume-based. It’s hard to keep track of each item. Accountants can help by introducing an Excel-based program or software to list your gross sales figures. They make you a revenue report which includes year-on-year growth, net sale amount, and profit percentage of each item. They can help you in proper tracking of monetary figures.
Restaurants
Around 50% of businesses fail within five years because of negative cash flow. An accountant can analyze your restaurant’s financial information and keep track of all the inventory and cash flows to see how well the business is performing. By keeping track of which items were ordered the most, they can help you determine your best and worst sellers.
Moreover, they can help you price your menu items. The price you offer must be able to cover the cost deducted from preparing that meal. They can also help manage your prime costs and decide pricing to offset expenses and make a profit.
Construction Industry
Construction accountants calculate the total cost of a project and oversee all the finance-related issues of a project, including those that fall under the Construction Industry Scheme (CIS). Their duties vary and can include planning the budget for a project, performing cost analyses, signing contracts with suppliers, reviewing purchase orders, and collecting invoices. They track and manage all construction costs and ensure that the project is completed within the assigned budget.
Construction accounting can be complex, and it requires accountants to ensure that all relevant costs have been assigned to each project after determining profitability. Construction accountants use the cash basis method of accounting, which records revenue when cash is received and expenses are paid in cash.
Insurance Industry
Insurance accountants manage all types of accounts for an insurance broker. They evaluate assets to analyze investment opportunities including, accounts receivable, investments, payroll, and claims. Cash flow is crucial in this industry, and accountants play a vital role in estimating future cash flow.
The insurance industry is risky so, all insurance companies require statutory accounting when preparing their financial statements. Moreover, insurance accountants also monitor the growth of the company and plan accordingly for future endeavors.
Entertainment Industry
The entertainment industry is a multi-billion dollar industry, and accountants in this industry provide financial services to studios, production companies, and several artists, and technicians. They assist with recordkeeping, contract review, bill paying, budgeting, tax planning, and other payments.
Working in a more specialized role like a producer requires you to plan a budget related to a specific product like a movie or a T.V show. It also becomes your responsibility to ensure that the product has enough resources to pay for sets, actor salaries, and other craft services.
Bottom Line
Understanding finances is essential so that you know that you are not running your business blindly and avoid potential pitfalls.
Accounting helps in providing you with information and data in the form of numbers that can help your business to succeed. It can determine whether the business is profitable or amendments are required to make it profitable.
Companies in all industries require a competent accountant to manage their finances and help them operate smoothly. Some industries that require a specialized accountant include the demanding fashion industry, construction, and insurance industry.
The entertainment industry has accountants working in various settings either with production houses, actors, technicians, or on their own as producers.
Specialized accountants in the restaurant industry are also crucial. They help manage all financial aspects of a business in these industries.
Hopefully, this article will help you understand the importance of specialized accountants in some industries.