Corporate accounting, also known as industry account, refers to all types of accounting that pertains to companies rather than individuals. It usually comprises of a team or department of accountants that operate as an internal branch of the company. They handle the day-to-day and long-term financial aspects of the company, such as budgeting, tracking cashflow and other tasks. They are usually overseen by the Chief Financial Officer (CFO.)
What a corporate accountant does
A corporate accountant works for a company that produces goods and services. They are responsible for compiling the financial reports and other documentation that the company’s executives and managers need to make business and financial decisions going forward. Since corporate accountants work for the company itself, rather than as external to the company and so are generally only responsible for one client.
A corporate accountant’s responsibilities include:
- The analyze financial data and organize it to assist in business decision making
- They oversee and enforce compliance with their country’s accounting standards
- Compile financial reports and accounting documents for the managerial accountant, CFO, CAO and other relevant parties
- Manages expenses
- Preparing taxes
- Managing accounts receivable
- Processing Payroll
- Following financial regulations, laws and policies
- Keeping tax records up to date
Types of corporate accounting
Financial accountants are tasked with recording, summarizing, preparing and reporting financial documentation that are relevant to interested parties outside of the company. These documents include balance sheets, cash flow statements, and income statements among others, while outside parties include investors, customers, creditors, the government, suppliers and similar. Financial accountants focus on generating reports based on the financial documents supplied by other accountants according to the stipulated guidelines of the country’s accounting standards.
Managerial accountants are responsible for reviewing the accounting information and financial records of a company so as to provide advice to the other managers and owners of the company to better equip them when making business decisions. They do so by examining all operational business metrics of the business such as looking at the variances between projected income and actual income, costing information and relevant data and compiling the relevant and legible documentation.
A cost accountant is a type of managerial accountant who is responsible for calculating the total production cost of a business. This is accomplished by reviewing all relevant factors such as cost of materials, cost of labor, rent, electricity, maintenance, and similar costs in order to determine both the fixed and variable costs of the product’s production. By pinpointing all related costs, they are able to present the company’s management with insight as to what funds should be allocated towards product production, as well as highlighting any unnecessary expenditures. This then helps the managers to effectively budget and calculate future output of a particular product or service moving forward.
How corporate accounting differs from public accounting
A public accountant is legally authorized to perform tasks that other accountants are not authorized in. This includes representing businesses for IRS audits, auditing and approving financial documents of businesses, compiling financial statements and preparing and authorizing tax returns, among other tasks. Therefore, while a licensed public accountant such as a CPA, EA or CA might form part of a corporate accounting team, not all corporate accountants are licensed public accountants.
|Corporate Accounting||Public Accounting|
|Most employers require at least a bachelor’s degree in accounting or finance, although this is not necessary for basic bookkeeping||Requires a degree and licensure to practice|
|Can only record and calculate tax information and prepare tax documentation, but cannot sign on it or represent clients to IRS unless they are a licensed public accountant||Can represent clients before the IRS|
|Can prepare financial documents and reports for an auditor||Can audit financial records|
|Works for client in a specific industry||Works in an accounting firm|
|Usually represents a single client||Usually represents multiple clients|
|Specializes in accounting laws and regulations relevant to their company’s industry||Requires a wide range of skills and knowledge|
|Deals with daily financial operations of the company||Deals with financial documentation pertinent during tax season or scheduled audits|
|Unlikely to be partnered and more difficult to receive promotion||Greater potential to become partner or promoted|
|Generally good work/life balance||Long hours during audits and tax season|