When you are comparing the difference between an accountant and a chartered accountant, you will discover that a number of important differences between them. From a technical point of view, anyone can choose to call themselves an accountant, irrespective of what education they have. A chartered accountant can give specialized accountancy services and business advice to clients in areas of importance.
The main difference between a chartered accountant and an accountant is that a chartered accountant is highly qualified and experienced, and belongs to a professional accounting body.
If you are looking for a simple accounting services, then there is no need to pay the extra cost of hiring a chartered accountant – but if your accounting needs are more complex and need professional touch, then hire a chartered accountant irrespective of the higher cost because they are worth it.
What Does An Accountant Do?
The primary responsibility of an accountant is to record, analyze, interpret and summarize financial transactions of an individual or association for decision-making. They should have knowledge of majority of the vital consistency rules of accounting during these transactions.
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Some of the functions of accountants include:
- Taking part in planning and budget meeting with individuals and corporate organizations to give recommendations and vital information for investment opportunities.
- Making sure that the financial practices is in accordance with state and federal laws.
- Balancing business accounts and preparing financial documents regularly or as requested.
- Preparing and paying tax returns for big businesses.
- Recording information about account payable, profits, sales taxes, and other transactions in an organized way.
What Does A Chartered Accountant Do?
The title ‘Chartered Accountant’ and the acronyms 'ACA' or 'FCA', implies that the person has passed several tough examinations in financial management, auditing, business strategy and taxation and has received a minimum of three to five years of working experience as an accountant, and is dedicated to continuing professional development to keep their skills updated. You can also become a chartered accountant without a degree
ACA stands for Associate Chartered Accountant. An accountant will become an ACA if he successfully passed the exam of a professional accounting body and received certification. FCA stands for Fellow Chartered Accountant. An ACA can upgrade to FCA if he gets three to five years experience in the accountancy field after qualifying for ACA.
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Chartered accountants are subjected to code of ethics to keep a set of professional principles, striving to put their clients’ interests above theirs. They are also mandated to hold a certificate of practice which was issued to them by a recognized accounting body and professional indemnity insurance if they render professional services to the members of public.
It is mostly important to know that a chartered accountant has undergone more professional training than a regular accountant. A chartered accountant should have successfully completed a professional programme and has worked under an accountancy firm for at least three years. Rather than concentrating on tax returns and other “real time” aspects, the focus of a chartered accountant is to give correct records of all financial transactions of an individual or company. Thus, a chartered accountant is more likely to work in a more commercial capacity. Such as larger non-profit organisations, corporations and industrial sector.
What is the difference between an accountant and a chartered accountant?
The title of accountant is not sacred, this means that you don’t have to get specific qualifications to use it. An accountant may have studied accountancy at foundation level through AAT (Association of Accounting Technicians) or got their knowledge through years of working as an accountant. They will also adhere to the Financial Reporting Council’s (FRC) Corporate Governance and Stewardship Codes.
However, before you can use the title chartered accountant, an accountant must pass a series of exams and become a member of a professional body and complete three to five years of work experience to gain professional accreditation.
When Do I Need A Chartered Accountant?
Regular accountants can give valid advice on everyday matters, that is annual tax returns and invoicing. Hiring the expensive services of a chartered accountant isn’t necessary if you’ve issues about VAT, for instance. However, I will advice you to contact a chartered accountant if you find yourself in a more complex financial situation and that need the advice of a specialist.
For example, if you own a business and you want to buy a smaller company, you will need the service of a chartered accountant to make an in-depth financial plan prior to the acquisition. They will guide you the beginning to the end of the process, including how to fund the acquisition and offer advice on advancing in a tax efficient way.
Subject to their previous job experience, chartered accountants can have detailed knowledge of a good number of financial issues ranging from tax planning to cash flow forecasting. Finding a chartered accountant who has a particular field of specialty will help you get the best result.
Reasons Why You Should Hire A Chartered Accountant
Hiring a Chartered Accountant means that you have a dedicated ‘business partner’ who can advice you on how to plan your finance and make other business decisions. Below are some of the benefits you will get when you hire a Chartered Accountant:
1. Sound Business Advice
They can address all financial issues with accuracy to make sure that your problems are solved. Since they are regulated by a professional body, this means that they are governed by code of professional conducts. In other words, they are required to take out professional indemnity insurance as well as undergoing periodical compliance to make sure that they are still meeting the set standards
2. Broad experience
This guarantees that they have lowest weak points in their knowledge of business and ensures that they have built a strong business sense in a broad array of business situations
This will give you an absolute serenity in guaranteeing that your financial reporting and business practices are done in conformity with the law and advancing the interests of your business first
4. Business growth
Chartered Accountants advice business owners on minimising risk. They also identify and guide you on business growth opportunities like assets procurement, payroll or releasing capital to invest in growth
5. Tremendous savings in tax and time
Chartered Accountants can cut your tax liability and saving you time with secretarial and reporting obligations you have as a business. This can drastically decree your worries and give you extra time to focus on managing your business.
Because of their deep understanding, many chartered accountants can offer advice on issues that regular accountants can’t. They typically have specialised experience in certain areas, such as working with wealthy individuals with more complicated personal finances or witnessing as accountancy experts in criminal cases.