Corporate Accounting in 2020

Illumeo Customer Success's Profile

To define its financial stature, every company has to perform some accounting tasks including collection, analysis, classification, verification, interpretation, and presentation of financial information. Among various types of bookkeeping, one is called corporate accounting. Corporate accounting deals with the preparation of cash flow statements, financial records, balance sheets and creation of consolidated documents, etc.

Corporate accounting is the process of accounting that is dedicated to deal with the operations of a single company. The accountant only focuses on the financial records of a firm that has employed him or her. As the definition of corporate accounting says, the activities performed by corporate accountants are performed to work out the financial and operational status of a company. Corporate accounting is performed to communicate the assets and liabilities of a firm to investors, who are especially interested in the financial strength of a firm in which are interested in purchasing stock.

Corporate accountants make sure that the business activities are aligned with the organization's policies and that the financial activities of a company comply with the laws and regulations set by the governing bodies. Management uses the reports that are generated by the corporate accountant to make strategic decisions for the company.

Corporate accountant and public accountant differ from each other in a way that the corporate accountant works for a single corporation that is selling something other than accounting services. Typically, corporate accountants will work in a team or department under the direction of the CFO (Chief Financial Officer). Public accountants work in firms dealing in accounting services, frequently serving many clients, sometimes in different industries. Public accounting also deals with the preparation of financial documents that an individual or corporation requires to disclose to the public. 

Duties of a Corporate Accountant

Creation, installation, management, and maintenance of a company’s corporate accounting system is done by the corporate accountants. They create dedicated accounts for handling business segments such as equity, assets, income, liabilities, and expenses after installation of the software platform. The system records specific transactions into matching account automatically after assigning general-ledger codes to each account. Different reports and financial statements for a company are generated for internal use as well as for the regulatory bodies for verification.

Budget Preparation

The corporate accountant is in charge of preparing budgets for the organization to meet all its financial goals every year and to have enough spending money towards investments, supplies or hiring. Corporate accountants also perform audits to ensure that departments stick to their financial budget and the organization’s goals are met. The budget is reviewed and approved by the executives of the company.

Payroll for Staff

The corporate accountants are responsible for calculating staff salaries according to various work periods. This can be weekly, bi-weekly, or monthly. Salary disbursement, either through paychecks or a direct deposit to the employee’s bank account is done by a corporate accountant. 

Managing Accounts Payable/Receivables

Corporate accountants are involved with processing invoices received by the company and proceed to make payments to contractors and suppliers accordingly either through checks, bank transfers, and electronic transfers. They also focus on loan payments, taxes, and maintenance costs.

Account receivables are also tracked and processed by corporate accountants. Team of corporate accountants can be assigned to handle past-due accounts, and they work with collection agents to handle defaulting cases. They then update the company executives on cash flow as well as collection efforts.

Corporate accountants are specialized business accountants who are experts and make certain that the financial records of a company comply with laws, regulations, and policies. To become a qualified job candidate, individuals first need to have a bachelor’s degree in accounting. Some companies may also require the Certified Public Accountant (CPA) credential or Certified Management Accountant (CMA) credential, which requires further studies.

Corporate accountants need to file reports with SEC, Securities and Exchange Commission and must be CPA, Certified Public Accountant, by completing education beyond their bachelor’s degree, or a CPE certification. The CPA examination is offered by the American Institute for Certified Public Accountants (AICPA). CPA certification must be maintained through CPA continuing education. Accountants with a master in business administration with an accountancy concentration are usually in higher demand. Aside from the CPA designation, other certifications can also be beneficial for someone working as a corporate accountant, including, but not limited to:

  • Certified Management Accountant (CMA) offered by the Institute of Management Accountants
  • Certified Internal Auditor (CIA) offered by the Institute of Internal Auditors (IIA)
  • Certified Government Auditing Professional (CGAP) offered by the IIA
  • CPA Accredited in Business Valuation (ABV) offered by AICPA
  • CPA Certified Information Technology Professional (CITP) offered by AICPA
  • CPA Personal Financial Specialist (PFS) offered by AICPA

Professional recognition through certification, or a designation other than the CPA, provides a distinct advantage in the job market. Certification can attest to professional competence in a specialized field of accounting and auditing. Accountants and auditors can seek credentials from a wide variety of professional societies as many professional associations offer continuing professional education courses, corporate accounting training, conferences, and seminars.