Corporate accounting concerns itself with the activities of only one firm: the firm that employs the accountant.
In this lesson, we’ll see how that can actually mean that the accountant has a diverse workload.
What Is Corporate Accounting?
Many of us have a mental image of an accountant as someone who is doubled over a green tinged light pouring over numbers. Or perhaps it’s someone you only see in the spring as tax season approaches. However, the fact is that there are many different categories of accountants out there. One of the most important are those who practice corporate accounting, which means that they keep track of just one firm’s records. In this lesson, we’ll look at the type of work that a corporate accountant performs. We’ll also look at some of the major factors that differentiate corporate accounting from the public accounting that you may be used to thinking about.
Examples of Duties
Generally speaking, corporate accountants focus on two practice areas. They help manage the day-to-day finances of a company. For example, a large company will have several accounting departments, each specialized in something like accounts payable, which is about paying the company’s bills, or accounts receivable, which means billing the company’s customers. However, remember that accountants do not just focus on money. They also make sure that other aspects of the company are properly aligned to make as much money as possible. For example, they concern themselves with the allocation of resources like inventory and raw materials to be sure that they are being used well.
If corporate accounting is starting to sound a little bit like being an efficiency manager, then you’re right! Corporate accountants are often valued for their ability to increase profit margins by lowering inefficiencies. This means that they are often tapped for higher management roles, since they already have the abilities to increase profits.
Differences from Public Accounting
This means that corporate accounting is different from public accounting in a number of ways. A corporate accountant is an employee of the organization for which they perform accounting. Public accountants, on the other hand, work as independent contractors. They may be employed by an accounting firm, but that firm contracts them out to the groups that it works for. As a result, whereas a corporate accountant is focused solely on one company, a public accountant could switch between many different companies within a single year.
Because a corporate accountant does the same job day in, day out, that means that they can specialize in a given area. Public accountants are largely concerned with providing their clients services in the form of billable hours. Meanwhile, corporate accountants provide their employers additional value by specializing. This means that there are a number of subsets of corporate accounting, ranging from figuring out how much a company is worth to figuring how where a company has spent its money in the past.
In this lesson we looked at corporate accounting, learning that instead of serving many clients, a corporate accountant is on staff for one company and only performs its needs. As a result, a corporate accountant is able to specialize to a greater degree, as well as contribute to the bottom line of the organization in multiple ways. This often means greater growth opportunities for the corporate accountant’s career within the organization.