What Does An Accountant Do

Most People Have No Idea What Bookwork Actually Looks Like

I spent the better part of a decade doing close and close-adjacent work before I started calling myself an accountant, and even now the job is less glamourous than you might expect from movies. The core of it is recording what happened, checking that it happened, and presenting it in a form someone can actually use for tax, lending, or internal decision-making. That is the long version. There are a lot of small mechanical tasks between those two points. What Does An Accountant Do depends entirely on which side of the ledger you are sitting on. A public accountant at a firm spends most of their day digging through vendor invoices and reconciliation packages for clients who never saved receipts. A corporate staff accountant is usually chasing managers to get their expenses approved before the 10th of the month. A controller runs the whole operation and answers to people who want answers faster than the system can generate them. You pick your poison. Here is how it actually plays out in practice, not the clean version from a textbook. You get a trial balance at month-end that never balances the first time. That is standard. Your first move is always the cash account, because cash is the control account that ties everything together. You pull your bank statement for the period and compare it to the general ledger. If there is a discrepancy, you start hunting for outstanding checks or deposits in transit. Once you clear that, you move to accounts receivable and accounts payable, then fixed assets, then whatever weird account flagged a variance.

I worked on a close once where our revenue jumped up by roughly $47,000 for no apparent reason. The variance report showed nothing useful because the amount got split across three different subaccounts in the AR module. I ended up running a detailed transaction listing filtered by customer ID, manually cross-referencing shipment dates against invoice dates, and found a batch of automated recurring invoices that had been duplicated during a system migration. Fixed it by reversing the duplicate entries and documenting the source adjustment. Took about six hours that week. That is normal for this kind of work.

What Does An Accountant Do During A Monthly Close

The monthly close is the engine room. You are basically making sure the financial statements match reality before anyone external looks at them. The process starts with cutting off transaction entry for the prior period. You lock the subledgers, run accruals for expenses that were incurred but not yet invoiced, record depreciation for fixed assets, and reconcile every balance sheet account that has a real balance. Then you produce the three statements: income statement, balance sheet, and cash flow statement. The cash flow statement is where most people get stuck, so here is the practical shortcut. Start with net income from the income statement. Adjust for non-cash items like depreciation and amortization. Then adjust for changes in working capital accounts: if accounts receivable went up, you subtract that increase because it represents revenue that was recorded but not yet collected. If accounts payable went up, you add it because you recorded an expense but have not paid it yet. Do that for every working capital line item and you have your operating cash flow. It takes practice to stop second-guessing the signs, but once you get it right it is reliable. I used to spend about four hours per month building the cash flow from scratch for a mid-size client until I set up a proper indirect method template with working capital rollforwards built in. After that, it dropped to about forty-five minutes. The template only works if your chart of accounts is clean and your subaccount usage is consistent, which is its own separate problem to manage.

Tax Work Is a Different Animal

Tax accounting is not the same as financial accounting, and the confusion costs people money. Financial accounting follows GAAP or IFRS. Tax accounting follows whatever the IRS code says, which is a completely different rulebook with its own timing rules and deductions. You can legally have two sets of books that look nothing alike, and most businesses do. The big thing to understand is permanent versus temporary differences. A permanent difference is something that is never reconcilable, like municipal bond interest being tax-exempt but still showing up on your financial statements. A temporary difference creates a deferred tax asset or liability because the timing of when you recognize the item differs between tax and book. You calculate the deferred tax using the enacted tax rate for the year the difference reverses, not the current rate. Most people mess this up by using the current statutory rate instead. I ran into a situation last year where a client had a significant net operating loss carryforward from a prior year, and the enacted corporate rate had changed between the year the loss originated and the current year. Using the current rate would have understated the deferred tax asset by about twelve percent. I flagged it during the review, recalculated using the historical enacted rate, and adjusted the journal entry. The client's auditor asked for the calculation, so I kept the working papers clean. That is what the job looks like: spotting these mismatches before they become problems.

Software And Tools That Actually Matter

You do not need fancy tools, but you do need the right ones. Excel is still the standard, even though everyone pretends it is not. Power Query for data cleaning and Power Pivot for modeling will save you from doing manual lookups on datasets with thousands of rows. QuickBooks, Xero, NetSuite, or whatever the client uses for the general ledger is the source system. Audit and review tools like CaseWare, CCH Axcess, or Thomson Reuters ONESOURCE handle the compliance work. Accounting-specific forensic tools are overkill unless you are actually doing fraud investigation. The biggest mistake I see people make is relying on the accounting software to tell the truth. The software records what you tell it. If your chart of accounts is a mess, the software will produce a perfectly formatted financial statement that is still wrong. Clean your chart of accounts before you automate anything. I cleaned a client's account structure once that had over two hundred redundant expense accounts created over five years by different bookkeepers. It took me a week to consolidate them, but after that the month-end close dropped from three days to one.

Pitfalls That Mess People Up

The first one is cutting corners on accruals. It is tempting to skip the accrual entries because you think the invoices will show up next month anyway. They might not. Vendors pay their own bills on different schedules, and by the time the invoice arrives, your period is closed and you are scrambling to restate things. Record the accrual, reverse it when the invoice comes in, and move on. It takes thirty seconds per entry. The second one is mixing up capital expenditures with repairs. A repair maintains an asset and gets expensed. A capital expenditure improves an asset, extends its life, or adapts it to a new use, and you have to depreciate it over its useful life. When in doubt, capitalize. The IRS and auditors prefer you overstate assets rather than understate them. Deducting a capital expenditure as a repair is one of the most common adjustments I see on tax returns, and it is easy to fix if you catch it early. There is also the issue of intercompany transactions. If your business has multiple entities, every transaction between them has to be eliminated in consolidation. I have seen people forget this entirely on one-off closings, which inflates both revenue and expenses on the consolidated statements by the same amount. The net income is correct by accident, but the top line numbers are wrong, and anyone looking at gross margin or EBITDA will be confused. Run elimination entries every single time, even if you think the balance should net to zero.

What About Outsourcing Versus Hiring In-House

Small businesses often ask this. The answer is not simple. An in-house accountant costs you salary, benefits, payroll taxes, and management overhead, usually forty to sixty thousand dollars annually for someone competent. An outsourced bookkeeping service might charge two to four thousand per month for comparable work, which is twenty-four to forty-eight thousand per year. The tradeoff is responsiveness. An outsourced team does not sit next to you and answer questions during a crisis. They work on a different schedule and usually handle a dozen clients at once. If you are doing under two million in annual revenue, outsourcing is usually the better move financially. If you are doing more than that and have complex inventory, multi-entity structures, or financing covenants that require monthly reporting, you probably need someone dedicated. I told a client of mine once that he was spending too much time chasing his outsourced bookkeeper for basic reports. We transitioned him to a hybrid model where the outsourced firm handled the daily bookkeeping and we brought in a part-time controller for oversight. Cut his close time in half and improved accuracy enough that he stopped getting flagged by his lender. Accounting is not complicated. It is tedious, detail-oriented, and unforgiving of shortcuts. The people who are good at it are the ones who tolerate boredom better than everyone else and know when to push back on a manager who wants numbers yesterday. That is really all there is to it.