The 5 Corporate Skills that Accountants must learn before applying for a Job

An accountant is a professional who records business transactions on behalf of an organization. However, the duties and responsibilities of an accountant are not limited only to recording financial transactions. The accountant is also responsible for interpreting the organization's financial records and complying with the prevailing laws and regulations. Hence, an accountant must possess different skill sets to perform his job efficiently. 

This article will discuss the five essential skills an accountant must possess here.

1. Documentation

Documentation is one of the most crucial aspects of accounting. Accounting is not complete without proper documentation. Documentation of accounting records provides for the good governance of an organization, helps to protect the integrity of the business, and aids during the audit and compliance procedures. 

An accountant must be able to correctly classify and store all the documents related to any event or transaction that may occur during the operation of the business. For example, if a trading company purchases goods, makes payment in cheque, and sells the same to its customers, the accountant of that company should store the purchase invoice in the purchase file, the sales invoice in the sales file, and the copy of cheque and payment authorization voucher in the payments file.

Being able to produce the documents supporting the accounting records whenever asked for is one of the essential duties an accountant must perform. 

Documents are the proof of authenticity of the accounting records. Any accounting record without proper supporting documents is always suspicious in the eyes of management, regulatory authorities, and auditors. Improper documentation may lead to a lack of compliance with the applicable laws and might bring legal troubles to the business. 

Hence, if any individual aspires to build a career in accounting, the skill to keep proper documentation is one of those weapons he/ she must keep in their arsenal.

2. Accounting

Accounting means recording the financial transactions relating to a business. The history of accounting can be traced back thousands of years to the civilization in Mesopotamia. The concept of accounting emerged when ancient people felt the necessity to count and measure the outcome of their effort. The same concept is relevant even in the present day. Accounting is simply the methodology used to calculate the outcome of the efforts we put into our business. 

As the name suggests, the primary duty of an accountant is to perform accounting functions.

The accounting is based on a universal rule which says all the assets are debited, and all the liabilities are credited. Similarly, all the expenses are debited, and all the incomes are credited.

For example, Supertech Pvt. Ltd. buys an Almira for office on credit from Good Furniture Pvt. Ltd. While recording this transaction, the accountant needs to debit the Furniture account as it is an asset and credit the account of Good Furniture Pvt. Ltd. as it is a liability.

Similarly, Supertech Pvt. Ltd. also purchased some notebooks for its office and received interest of Rs. 5000/- for the fourth quarter from the bank. In the first case, the accountant needs to debit the Printing and Stationery account as an expense, and in the second case, the Interest Income account should be credited as it is an income for the company.

Two types of accounting are practiced in Nepal; Manual Accounting and Computerized Accounting.

2.1 Manual Accounting System

In manual accounting, an accountant must perform all the accounting activities manually. Activities from booking a Journal Entry to preparing financial statements and reports need to be performed manually in the manual accounting system. 

For example, Supertech Pvt. Ltd., a business engaged in the trading of computers, purchases a computer. Here, the accountant of that company needs first to record the journal entry in the journal voucher, then record the same in the purchase ledger, the party ledger, and the bank ledger when payment is made. In addition to this, the accountant needs to update the stock register and the purchase register. This hectic and time-consuming procedure wastes many productive hours for accountants.

Hence, the world has slowly left behind the manual accounting system and has migrated to the computerized accounting system.

2.2 Computerized Accounting System 

The computerized accounting system saves the time of accountants incredibly and also helps in the elimination of manual errors. In the example mentioned above, when Supertech Pvt. Ltd. purchases a computer, the accountant needs to book a journal entry of the transaction, and all other ledgers and registers are updated automatically. 

This accounting system helps to perform accounting operations faster than the manual system, which helps make the business operation smoother and ultimately helps the company's growth. 

TallyPrime, Busy, Swastik, etc., are the accounting software that is currently widely used in Nepal. 

3. Taxation

Taxation is the term that comes attached with most accounting transactions. A company is liable to pay Value Added Tax (VAT) on its sales and is required to deduct and deposit TDS on its payments. An accountant must ensure that the VAT and TDS are properly charged/ deducted and deposited with Inland Revenue Office.

Further, the accountant must continuously update the Sales and Purchase registers (Kharid/ Bikri Khata) to file monthly VAT returns. 

The government has specified the due dates for filing VAT and TDS returns and pays the same as the 25th day of next month. Any delay in filing the returns and payment of tax amount results in fines and penalties. 

In addition, a well-trained and responsible accountant continuously forecasts the company's income/ expense and profit/ loss to determine the income tax to be paid by the company every year. Inaccurate projections by accountants may cost the company a considerable amount in taxes. Besides, the company's income tax return should be filed within a specific due date (Poush end in case of Nepal) to avoid any fines and penalties.

Hence, an accountant should always be cautious about compliance with tax laws.

4. Compliance

As discussed above, an accountant must be cautious about complying with the general taxation provision in the country; there are various other duties of an accountant related to compliance.

4.1 Closure of Annual Books

The financial year in Nepal starts from the first of Shrawan and lasts till the end of Asadh. An accountant must be able to properly close the books of accounts at the end of every financial year, complying with the applicable accounting standards.

4.2 Balance Confirmation

An accountant has to ask for the balance confirmation certificates from all the debtors, creditors, and banks at the end of every financial year.

4.3 Assistance in the Audit Procedure

The job of an accountant does not end at the end of a financial year. After the closure of books of a particular financial year, the company must prepare the financial statements and get them audited. An accountant has to assist the audit team in their job by providing the data and documents they ask for.

4.4 Adjustment Entries

After the balance confirmation certificates have been obtained and the audit has been completed, an accountant must pass the adjustment entries as suggested by the audit team and the management.

5. Onboarding 

The skillset required in an efficient accountant is not limited only to accounting knowledge. An accountant must possess other procedural and professional skills as well.

5.1 Resume Writing

An individual aspiring to be an accountant must be able to write a resume correctly that showcases all the qualifications and strengths he/ she possesses. A well-structured resume helps in enhancing the bargaining power of a job aspirant and increases the chances of landing a lucrative job.

5.2 Understanding the Business

A person who wants to work as an accountant for an organization should first learn about the institution he is willing to work for. He/ she needs to understand the nature of the organization's business and learn about the statutory obligations applicable to the organization. Further, before starting the role as an accountant, one must learn about the debtors, creditors, suppliers, and customer base of the organization.

5.3 Preparation of Checklist

The accountant should be able to prepare a daily, weekly, monthly, quarterly, and yearly checklist of the jobs he needs to perform. This helps perform the duty efficiently and ensures any task is not omitted.