What is Technical Accounting?
Technical accounting is a branch of accounting that is similar to accounting but has a technical aspect to it. This type of accounting involves analyzing financial data and past performances so one can estimate future revenues, costs, and growth. Technical accounting also involves administering different resources to different departments for various projects.
Technical accounting focuses on the "bigger picture" of the accounting aspects in a business. A technical accountant must have a strong working knowledge of accounting, technology, accounting software, and other software to be successful and ensure the company they work for is financially successful.
What Does a Technical Accountant Do?
Technical accountants conduct the following activities to ensure the financial department of a business operates smoothly:
Technical accountants collect, analyze, interpret, and report a company's financial data.
Technical accountants conduct audits, find solutions, and implement financial changes to keep companies financially sound.
Technical accountants compute business tax information, handle business tax accounts, file taxes, create annual financial reports, or even create quarterly reports to ensure the company has a positive financial status.
Since technical accounting entails reporting financial data for the internal use of a company, a technical accountant needs to be informed of a business's previous spending habits, budgets, and current and previous finances. A technical accountant needs expense and revenue recognition to help their company be successful in the marketplace. Taking technical accounting memos on the matter and sharing them with their accounting and finance team will also help them succeed.
Technical accounting requires an understanding of a company's spending, budgets, and financial records. A technical accountant needs expense and revenue recognition to help their company be successful in the marketplace. Taking technical accounting memos on the matter and sharing them with their accounting and finance team will also help them succeed.
Technical accountants study current financial data to forecast future reports.
Technical accountants maintain financial records and offer accounting guidance to the business that conducts their accounting responsibilities in.
Technical accountants work closely with the accounting and finance team to ensure all financial goals are met, consistency within the company relating to accounting and finance, and revenue recognition is present across all departments.
What Skills Do Technical Accountants Need?
Technical accountants need certain technical accounting skills and other technical skills to be successful in their field. The most important things a technical accountant must have are an in-depth knowledge of accounting, finances, legal tax regulations, and guidelines on a state and federal level as well as knowledge of software and technology.
The technical skills a technical accounting needs to be successful are,
Superior critical thinking skills
Strong analytical skills
Problem-solving skills
Strong sales skills and product knowledge
Solid communication skills
Organization skills
Time management skills
Accounting software, such as advanced Excel
Working knowledge of QuickBooks, Oracle NetSuite, Java, SaaS, SQL, enterprise resource planning (ERP), and other technologies and software.
Working of GAAP accounting principles or generally accepted accounting principles
Accounting skills that a technical accountant needs are similar to the skills an accountant uses to be successful in their accounting career, such as bookkeeping, knowledge of accounting software, advanced math skills, knowledge of accounting principles, business administration skills, ability to analyze data, and in-depth knowledge of balance sheets, cash flow statements, income statements, financial reporting, financial statements, tax returns, and other tax-related information.
Technical accountants must also set financial goals for themselves and the company they work for. It’s important for technical accountants to set financial goals within the business based on a business’s current financial standing. Other departments and other employees of a firm are affected by the financial status and successes of a business. Therefore, they must keep all aspects of a business in mind while establishing these goals.
Formal Education
Other than a certain set of skills, a technical accountant will also need a formal education to be successful in their career. A technical accountant will need to obtain a bachelor's degree in accounting, economics, finance, and business. Technical accountants could be successful in their given field with an associate degree; however, they'd only be able to find a job as a bookkeeper or accounting clerk.
If a person is looking to advance in their career and become a technical accountant, a bachelor's degree in accounting, economics, finance, or business is highly recommended.
Credentials and Certification
Another credential that will help technical accountants advance in their career is by earning Certified Public Accountant or Certified Management Accountant certification.
The more education and training a technical accountant has, the better the career they can obtain.
If you're looking to become a technical accountant, another certification you'll need to bump your resume to the top of the hiring list is an Accredited Tax Advisor (ATA). The Accreditation Council for Accountancy and Taxation (ACAT) grants the ATA certification. You must first take the exam and pass it to receive this certification.
Knowledge
A technical accountant also needs knowledge of business, business administration, and business practices. It's important for a technical accountant to have a working knowledge of how a business works because they handle the daily accounting activities of their employer.
It's also important for a technical accountant to have knowledge of the field their business is in. For example, if a technical accountant works for an agricultural business, it's important for that technical accountants to have some knowledge of the field of agriculture.
If you're looking to start a career in technical accounting, you'll need to look into earning an education in accounting, economics, finance, or business and obtaining the proper credentials to make you stand out from your competitors.
Accounting vs. Technical Accounting
The main difference between accounting and technical accounting is that the focus lies on financial reporting. Technical accounting focuses more on the broad spectrum of accounting and noting changes in the financial reporting requirements in accordance with the United States accounting changes. After looking at the changes in the financial reporting requirements from the U.S. as a whole, a technical accountant makes changes.
The areas of expertise are the same in both accounting and technical accounting, the activities are slightly different. These two types of accounting differ solely in the focus of their daily activities. Accounting has a micro-focus and technical accounting has a “macro-focus” with technical aspects.
Another major difference between accounting and technical accounting is the complexity of tasks. Asides from accounting and finance, technical accounting involves more technical aspects and requires more knowledge to complete tasks within a business successfully.
Also, for technical accountants to be successful in their careers, they're required to have more advanced computer skills and more knowledge of technology, software, and other tech skills.
