Are all accountants the same?

Different types of accountant

If you're an SME, you'll probably consider outsourcing your financial management to an accountant sooner rather than later – or employing one in-house if business activity warrants the salary.

While there may be various special skills required within your business, for many owners the money matters are the hardest to keep on top of and manage. Serving your customers takes top priority, and for most people, doing the accounts isn't something they relish!

However, not all accountants have the same skills, so it’s helpful to be aware of the different types and what they're qualified and able to help you with.

What type of accountant do you need?

There are all kinds of accountants who focus on different elements of personal and business finance. Here are some of the main ones to look for:

Chartered/Certified Accountant – these mean pretty much the same thing, albeit that the individual has received their qualification from a different examining board. They’re both qualified to prepare and file company accounts, but wouldn’t typically help to manage business accounts and finances on a regular basis (this is more the realm of management accountants, see below), and are bound by a code of professional ethics.

Management accountant – this is a variant of chartered accountant who typically works in businesses providing management information and financial analysis to help with its smooth operation. Formerly called ‘cost and works accountants’ they typically make up the bulk of internal finance functions, managing all aspects of financial management. Some, like myself, also hold a ‘practising certificate’ in order to offer the additional service of accounts and tax return preparation and submission

Auditor – an external auditor’s principal role is to establish that accounts prepared on behalf of an organisation give a ‘true and fair’ view of the financial performance of the company, which they do by assessing, analysing, verifying and reporting on the financial data of the business. Internal auditors are generally employed within a business to test and verify processes, assess exposure to risk or threats that the organisation is facing and identifying controls that can be put in place to manage these. Where accountants generally run the day-to-day finance activity, an internal auditor is more likely to be used on a project basis, while external auditors are engaged annually. It’s also worth noting that small companies are not required to have their accounts audited – this requirement only applies to businesses with a turnover of >£6.5m and assets of over £3.26m.

Forensic accountant – this is a specialist area of auditing focused on investigative activities, brought in when a court action requires an in-depth look into the finances of a business due to embezzlement, fraud or bankruptcy.

Accounting consultants/financial managers – offering a comprehensive range of services, a consultant creates and evaluates reports and statements, develops financial forecasts and will help you to understand your data and the impact your position is having on your business, helping you to make changes to your strategy that will improve your profitability. Their input extends beyond just the figures, looking at performance, productivity and mitigating risks too. In many respects, these professionals offer a similar service as management accountants, and they may also hold a chartered or certified accountant’s qualification.

As you can see, there’s an overlap with many of these different accountancy roles because the core skills, knowledge and applications all centre on your financial activities, so the main thing to consider is the level of support you require.

Initially, you may just need some basic accounting support to help keep you compliant, filing accounts and tax returns on time – most likely from a chartered / certified accountant, with their input progressing to support with your sales, purchases and more complex tax requirements.

As your business grows, you may need to engage with a more specialised management accountant, consultant or financial manager for both your retrospective and proactive needs. This gives you access to one trusted person who understands your business inside-out, and who’ll manage both the basics and your ongoing financial and business development strategies. 

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