A great accountant is always learning and improving their accounting skills. Having a growth mindset about your accounting knowledge and skill sets can help you keep up with client demands and attract new business. And if you want to keep up with the changing landscape of business and accounting, you have to enhance your skills and learn some new ones.
You may be wondering, How can I improve my accounting skills? To learn how to improve accounting skills and help your accounting firm be the best it can be, read on.
8 Ways to improve your accounting skills
To be on the top of your accounting game you have to master hard and soft skills. Luckily, with enough practice and determination, you can master each skill with ease.
Without further ado, here are eight ways to improve your accounting skills to help your accounting firm.
Hard skills for accountants
Hard skills for accountants are measurable and easily defined abilities. With hard skills, there is a clear right and wrong way to do things.
Hard skills can include knowing and following accounting regulations or preparing financial statements. Here are four hard accounting skills you need to keep sharp.
1. Stay up-to-date on cutting-edge technology
The world of technology changes every day and those changes affect the world of accounting. Staying up-to-date on cutting-edge technology is a must. But where should you start?
When trying to keep up with changing technology, here are some things you can do:
- Become an accounting software pro. Spreadsheets can work wonders, but they are nothing compared to some accounting software options on the market. Accounting software can take your accounting firm to the next level because of its accuracy, speed, and processing power. Say goodbye to doing your accounting tasks by hand.
- Learn about automation and artificial intelligence. The future of accounting lies in software that saves you time by taking work off your hands. For example, automation takes regularly occurring and essential tasks and automates them. You can automate processes like invoicing, credit card payments, and sending out payment reminders.
- Embrace artificial intelligence. You can’t ignore artificial intelligence (AI) in the accounting world. AI may help improve your productivity by 40%. And, it can take mundane tasks off your hands, like uploading files, auditing, and compiling and sorting data.
- Brush up on your digital communication skills. While you don’t have to offer virtual bookkeeping if you don’t want to, you may want to consider meeting with clients virtually occasionally. Virtual accounting lets you work with clients all over the country and gives clients different ways to keep in touch. Digital tools like video conferencing, messaging apps, or file-sharing software can help you and your clients stay on the same page.
2. Get comfortable analyzing data
Using technology to help your accounting firm is only half the battle. Once you gather financial information, you have to analyze it. Of all the data crunching you do for clients, analyzing a financial analysis report may be the most important.
Think of financial statements like a report card for a business. They help you see how the company has done in the past and predict its performance in the future.
Here are three of the financial statements you should know about:
Once you have these statements, you’ll have to drill down and see what they have to say about your client’s business. There are a few methods for analyzing financial statements:
- Horizontal analysis. Compares two or more periods to help understand a business’s progress over time. Generally depicts the same line items as a percentage growth from one year to the next.
- Vertical analysis. Establishes a connection between different line items in a single reporting period, helping your clients understand revenue and expenses and overall performance.
- Ratio analysis. Compares line item data against one another to reveal a client’s profitability, liquidity, operational efficiency, and solvency. You can compare ratios with previous periods to understand how your client’s business is changing. Or, you can compare ratios with companies in the same industry to see how a client’s company stacks up against the competition.
- Trend analysis. Analyzes trends over three or more periods and plots that data on a horizontal line to help identify and visualize patterns. Understanding the trends of a client’s business may help you forecast how it will perform in the future.
(Want to know what to do with a client’s financial data after you analyze it? Skip to soft skill #6.)
3. Know the industry regulations
The federal government doesn’t officially regulate accountants. But, the Securities and Exchange Commission (SEC) and the IRS regulate some activities for accountants. There are also state and local regulations that you should be aware of.
Here are some of the boards and organizations you need to know when keeping up with industry regulations:
- National Association of State Boards of Accountancy (NASBA). NASBA works with 55 State Boards of Accountancy in the U.S. to administer the Uniform CPA examination, issue licenses to Certified Public Accountants, and regulate public accountancy in the U.S.
- Public Company Accounting Oversight Board (PCAOB). PCAOB is a nonprofit corporation designed to protect investors through informative, accurate, and independent audit reports.
- Governmental Accounting Standards Board (GASB). GASB establishes accounting and reports standards for state and local governments following Generally Accepted Accounting Principles (GAAP).
- Federal Accounting Standards Advisory Board (FASAB). FASAB develops accounting standards for U.S. government agencies.
There are some professional organizations you may want to consider joining if you haven’t already. Professional organizations can help you stay up-to-date with industry news.
Here are a few accounting professional organizations to keep in mind:
- American Institute of Certified Public Accountants (AICPA). The AICPA provides tools and resources to help the accounting profession meet the industry’s evolving demands.
- American Accounting Association (AAA). The AAA is a community of accountants interested in accounting education and research. The AAA hosts a long list of accounting publications, like Issues in Accounting Education, Current Issues in Accounting, and Journal of Emerging Technologies in Accounting.
- National Society of Accountants (NSA). The NSA works to make accounting and tax professionals succeed in their industries. The NSA does this through regular newsletters, publications, and sponsored educational programs.
4. Go back to the basics
One of the most important ways to improve accounting skills may also be the simplest. If you want to improve your skills, go back to the accounting basics—the basic principles of accounting, that is.
Here are a few of the basic accounting principles you should be familiar with:
- Accrual principle
- Conservatism principle
- Cost principle
- Economic entity principle
- Going concern principle
- Matching principle
- Monetary unit principle
- Revenue recognition principle
- Time period principle
You may also want to brush up on the Generally Accepted Accounting Principles, which ensure businesses follow a standard when reporting their financial information. The Financial Standards Board (FASB) and the Securities and Exchange Commission set the GAAP. Private companies don’t have to follow GAAP, but it doesn’t hurt to follow the principles.
Soft skills for accountants
You may feel like soft skills are harder to define when compared to hard skills because they aren’t so clear-cut. Soft skills for accountants describe the skills needed to interact and communicate with clients effectively. Before you throw your hands up as an introvert, don’t worry. Like hard skills, soft skills are teachable. If you struggle with communicating with clients, you can improve with practice.
Soft skills can include becoming a leader in your field and learning to adapt quickly to new situations. Here are four soft accounting skills you should brush up on.
5. Improve your critical thinking skills
To be a good critical thinker means that you excel at thinking about thinking. But what does thinking about thinking mean? This is another way to talk about metacognition, an individual’s ability to be aware, understand, and guide how they think about a problem. In other words, it’s a way to monitor and regulate how you think about a specific situation. If you’re wondering, What in the world is metacognition? You’re already doing it.
So, if you want to be good at critical thinking, work on your metacognition. Metacognition has three phases:
- Make a plan. Create a plan to complete a specific task. Before you start, spend some time thinking about the steps involved in the task or possible hiccups you may have to address once you start.
- Track your progress. As you follow through on your plan, track your progress. Ask yourself if your plan is working or if there are ways to improve it.
- Evaluate your progress. When everything is said and done, reflect on your progress. Are there things you could have done differently? What strategies did or didn’t work? Were there situations you didn’t prepare for or anything that surprised you?
When you practice metacognition you can improve your critical thinking skills. Why does this matter? Your critical thinking skills help you understand when and how to improve as an accountant and can help you see problems that others might miss—making you an asset to your clients.
6. Be a storyteller
Your critical thinking skills mean nothing if you can’t tell your story well. As an accountant, you work to inform your clients about their finances. To do this, you first have to analyze the data (e.g., hard skill #2). But, you also have to present your findings to your clients in a way that makes them take action.
Remember, you aren’t just telling your clients about financial insights, you’re telling them a story about their firm’s past and present that affects its future.
Here are some ways to improve your storytelling skills:
- Plan your “story”
- Deliver key information up front and repeat it
- Use examples to illustrate the financial data
- Help your client feel emotionally connected
- Use eye-catching visual aids to help your clients understand
7. Become a leader
If numbers are your first passion, becoming a leader may have never crossed your mind. But as an accounting professional, leadership is a must-have soft skill. Without leadership skills, your firm may have difficulty organizing tasks, managing deadlines, and communicating effectively.
To hone your leadership skills you can:
- Create a healthy work culture and environment. To create a healthy work culture and environment, make sure that you respect your employees for who they are and what they bring to your firm. And, don’t forget to reward them for their hard work.
- Pre-plan work and set benchmarks before deadlines. It can be hard to keep track of things at your firm, especially when everything happens all at once. Setting up a calendar everyone can access can save you headaches later on.
- Be an ethical leader. Being a leader means having high standards for everyone in your firm, including yourself.
8. Learn to adapt quickly to new situations
Because we can’t see the future, it’s hard to predict what may happen. You must learn to adapt quickly to new situations to make sure you can thrive in a changing environment. If you don’t learn to adapt, your accounting skills might become obsolete.
So, how can you adapt quickly to new situations? By creating a reskilling program, you can prepare for the unexpected. When you need to adapt to a new problem, there’s a plan in place to help make that happen. For example, if your firm’s team isn’t up-to-date on cutting-edge technology, a reskilling program could bring your team up to speed.
Here’s what you should include in your reskilling program:
- Identify the new situation or problem your accounting business must deal with. This is a great time to use your critical thinking skills. Typically, one problem leads to another. Remember how COVID-19 evolved into supply chain disruptions and worker shortages? Make sure to consider how your problem may tie into others.
- Identify the skills needed to address the problem. There’s a chance that these skills already exist in your firm. If so, that’s great news. If not, you’ll have to help your team upskill to meet the new challenges head-on.
- Find or create ways to upskill or educate your team. This is easier said than done. Depending on your problem, there may be online courses, classes, or webinars that help your team stay ahead of the game. But if educational tools don’t exist yet, you may need to put together a presentation or booklet to bring your firm up to speed.
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