For a lot of people, the idea of accounting is quite vague. Some of us fall for various misconceptions about accounting. One misconception is that it is a profession that only involves the use of math and numbers to balance books and do taxes. However, although mathematical computations are a big part of accounting, these are not the only things that accountants do.
Common Misconceptions about Accounting
When asked to picture or imagine an accountant, we often see an old man typing away on his keyboard. Most likely, we him holding a calculator while looking at his laptop intently. However, once you see how a real accountant do his or her job, you’re perspective would most probably change.
To demystify the concept of accounting, I’ve compiled a few of the common misconceptions about it:
Men Dominate The Accounting Industry
According to Catalyst.org, more than half of all accountants and auditors are women. Apparently, in the United States alone, the percentage total of female accountants and auditors is 60.6 %. Though despite their massive chunk in the accountant population, women are only 51% of all full-time in CPA firms, and only 24% of these are partners and principals.
Getting An Accountant Is Expensive
Companies often treat accountants as cost centers. The reason is that they have no direct contribution to the revenue generation of the business. Many smaller companies are reluctant to receive professional accounting assistance because it seems that it might not be worth their money.
However, the opposite can be true in the long term Hiring an accountant can reduce your losses and possible fines due to improperly prepared financial statement. Over the period of your business, you’ll realize that your accountant is actually safeguarding you from unnecessary expenses. They can also prevent charges for non-compliance with legislation and regulations, and keep you from overpaying your taxes.
Accounting Is An Exact Science
Accountants have some degree of freedom to set policies, accounting methods, and financial analytics. They innovate in every step they take while managing your business. In fact,many companies come to acknowledge accountants for their distinctive and innovative contributions to the achievement of their organization.
Only Math Whizzes and Geniuses Can Be Accountants
One of the misconceptions about accounting that people believe is that it is all about numbers. It is more focused on the person’s analytical abilities than pure mathematical skills. In some instances, accountants do not need to use hardcore mental math abilities to do calculations. They often rely on easily accessible calculators and spreadsheets.
Having exceptional written communications skills is far more critical for an accountant. Most of the time, they are required to come up with reports and summary of financial statements for the business.
Accounting Is Purely For Taxes
This misconception is the most common among them all. Although it is true that, to be a CPA, we have to have a general understanding of taxation. This training helps us provide businesses helpful tax services that are critical and essential for the company’s success. However, this is not all what accounting is all about. But there are many more types of accountants that have nothing to do with taxes. Below is a list of some types of accountants that have varying specializations:
- Forensic accounting
- Environmental accounting
- Personal financial planning
- Auditing Information Technology
- Sports accounting
AldarisCPA can offer you a wide range of accounting services for your business. We offer tax preparation, business consulting, individual & family consulting, bookkeeping and corporate entity structure planning services. If you want to learn more, set an appointment with us by clicking this link!