Enhance your Accounting and Tax sales journey with airSlate SignNow

How to create outlook signature

a day in the life of an accountant what a topic hey guys welcome to another video this is the Financial Controller and my name is Bill Hanna and I've been in the accounting game for the last 15 years I've been a licensed CPA in the great state of New York for the last five years and in my career I started out as an auditor and then I became an accountant a senior a manager and now I'm a controller in a start-up in New York City and if you're new to this channel what we do here is that I give you the lessons that I learned the summary or the juice over the last 15 years so that you can apply it to your own career and benefit from it the topic of this video is a day in the life of an accountant and what I'm gonna do is since there isn't an exact scenario or a template for a day every day is kind of different from the day before and so what I'm gonna try to do is bring this down to three sections so we're gonna look at daily so the daily transactions or the daily tasks that I have to go through and then we'll look at monthly so there is a set of tasks or transactions that are monthly and the sort of the life cycle of an accountant and then there is the seasonal aspect so three things daily monthly and seasonal and the monthly as you can imagine it's gonna be things like closing the months things that you have to do in terms of reporting and analysis on a monthly basis and then seasonal which is the last part of this video it's gonna be things like as you might have guessed like taxes or auditors or dealing with compliance issues in general and then at the end of the video I'm gonna tell you the things that I enjoy the most about being an accountant and the tests that I dread the most or the things that I struggle to get up from bed in the morning on the days that I have to do and so without further ado let's jump right in but before that let's have some coffee you'll need lots of coffee if you go into accounting so we said we've been looking at things in terms of daily tasks and then monthly and then seasonal if we are starting off with the daily tasks the things that I deal with on a daily basis are going to be broken down by four major things one is accounts payable or payments to vendor and then accounts receivable and collection from customers and then payroll and then lastly employee expenses and those are the four components that will make ultimately at the end of financial statements right so accounts payable and expenses are going to go on the income statement they are and collection that makes revenue on top of the income statement payroll is one of the biggest expenses of a company in general and then employee expenses and what I mean by that is travel expenses and things that employees spend the money on and ask the company for reimbursement such as phone bills meals and and things like that and so most days when I get into the office I'm looking at accounts payable in terms of responding to inquiries from vendors on payments that they're sending us emails asking about the status of their payments looking at an aging and so the best way for me to know the status of accounts payable how late are we on paying some vendors or the status of it is looking at the actual aging schedule which gives me by vendor looking at the buckets of 30 days 60 days and 90 days understanding where we are with payments to vendors and then secondly I look at accounts receivable and so I always look at an aging also so looking at that aging will tell you past new customers and things that are late understanding where you are with collection that's really important as well the third aspect of sort of the daily routine is gonna be payroll and you know payroll obviously isn't daily so payroll is in the u.s. is twice a month and most companies some companies pay weekly but in most companies its bi-weekly or twice a month and so what I mean by payroll on a daily basis is that you are dealing with adjustments to the payroll and new employees starting and employees leaving there is a bonus of some kind and all of these things you need to be able to make sure it's in the payroll system so that it's process on time because obviously you know people are just super sensitive about their earnings you got to make sure that's correct and making sure that whatever you're inputting in the payroll system will then flow and correctly into your accounting financial package or software or whatever it is QuickBooks or whatever you're using at your company so payroll is another thing expense management which is employee expense management this is the expenses that employees are spending when they travel or if they are working remotely it's gonna be things like their phone bills or internet bills and things like that and typically people we'll submit these expenses via expense management platforms like Expensify or concur or any system like that and in the back end we are sitting as accountants reviewing these expenses looking at the receipts making sure that people are not spending more than they should so typically there's a policy so for example the phone policy at my company is $75 a month for the cell phone if you are a salesperson and if somebody's submitting a phone bill and asking for $85 right there I'll catch it and then I start I only pay him the $75 so this kind of thing is what I mean by expense management is making sure that you're enforcing the policy on the back end and processing these payments on time again people are super sensitive about their money you're gonna get paid fast and so you gotta you know review it and make sure it makes sense then lastly on a daily basis of course you're looking at the bank account you're making sure you have enough cash to cover the things that you're paying so if you're sending out a batch of payments to vendors and my company we pay on a weekly basis to vendor so every Thursday of the week and so I'm making sure that on that Thursday if I'm sending out half a million dollars in payments that I have this much money in the bank in the operating account or the spending account that I'm sending the money out of and so monitoring cash is another daily component of my daily work the same thing goes for payrolls of your you know on payroll day and making sure that the payroll account has enough funding to to match the payroll amounts and so pretty much that covered the daily set of tasks that I have to do and now we're moving on to the monthly cycle and the monthly cycle is about closing the month and this is basically spending the first or you know first a second week of the month it's about maybe 10 days of each beginning of each month closing out the previous month and closing out the month means that you are doing the billing for the month making sure you're invoicing all the customers and sending out those invoices it also means that you're applying the cash that you received all the cash you receive throughout the months to the open accounts receivable so that you can close that out and that is the process of bank reconciliation so a bank reconciliation is probably like one of the FIR things that I have to do at the beginning of each month is to reconcile the bank for the months before reconciling the bank will ensure two things one making sure the cash payment from customers will close out open invoices so that I know that my accounts receivable balance is correct on the balance sheet secondly when I reconcile the bank statement it means that I'm counting for all the expenses and so when you when you know that the bank balance on the bank statement and on the books agree you know that you captured all the cash receipts and the cash expenditures and that's really important that's usually one of the first things that I have to do at the beginning of the month so we said billing bank reconciliation and then accrual for expenses so basically when you're accounting for expenses you already received a big chunk of invoices from vendors and those are your expenses but then there are those expenses that you haven't received an invoice for and so I usually I have a list of things or vendors that I know are late and sending their invoices and I need to accrue for these expenses and then there are other things that will go in there such as payroll so I'm making sure payroll is correctly booked and accrued if there is any things related to payroll that need to be accrued such as severance or a bonus that hasn't been paid out yet but I know that belongs to the month or a commission for example even if the commission or the bonus hasn't been paid yet you need to accrue for it and so accruals are really crucial piece of the monthly closing cycle and then once all of these things are complete then I can go ahead and generate financial statements once I have the financial statements what I the first thing I do is compare period over period and so I'm looking at the months for example if I'm closing the month of May I'm looking at April sometimes I go back to Marsh can look month over months and see the fluctuation by account and that will give me sometimes hints into what's missing I could see a balance of one account suddenly dropping or having a big spike and then I realize that something maybe needs to be adjusted so that's the first thing is reviewing period over period and then secondly and very important is comparing the actual results of the income statement and the balance sheet to the budget so what I do is I look the month itself in terms of performance in the income statement compared to the budget and then provide you no commentary on the difference if we budgeted for a certain experience $50,000 and we spend 60-thousand that's ten thousand over I have to figure out what's that difference or ten thousand dollars and provide commentary on it and once I have all of that complete I can go ahead and look at my KPIs and so KPI is another crucial area and my monthly cycle which is things like gross margin DSO or their sales outstanding and KPIs are just like really quick measurements or metrics to measure the performance of the business and so gross margin if your gross margin whatever industry you're in is 25% or 30% when you look at that you can immediately judge the efficiency of the business without going into the actual cost of goods and the sales numbers so KPIs are really crucial to the monthly cycle and I actually have a full online class in kpi's where I teach you how to design keep your eyes to measure any business with real life examples I'm going to leave a link to that down in the description below if you're interested to take a look at that so we talked about the daily set of tasks and then we talked about the monthly cycle now we will talk about the seasonal cycle which has to do with tax preparation and the audit now with tax preparation usually what companies do is the outsource that to an outside firm but you as an accountant or in Mike in this case me what I do is I generate reports at the beginning of each year for the prior year and give it to the tax accountants and so these reports are going to be things like sales by state employee payroll by state rental by state and these are important in determining your tax liability in each state and in what we refer to as Nexus and so if you have certain sales that trigger a nexus in a certain state that means you have to file a tax return there and once I have these reports over to the auditors they ask for the finalize or the semi final eyes set of financial statements for the year and they use that to determine your tax liability when they file the extensions usually you file an extension on April 15 and then you file the actual tax return in October 15 I'm talking about obviously the United States other countries have different deadlines and the other component to tax return is going to be the filing of the actual tax return on October 15 and so once we are getting close to October 15 we've already finalized the financial statements for the prior year and we usually send the set of financials to the tax accountants by the end of September or so they will use that to file or prepare the final tax return which we will then sign off on and then file with the IRS and then each individual state that we have to file in now the other big part of the seasonal type work is the audit and so the audit is a major component of the life of an accountant usually when you work for a company the company goes through an annual audit by an external auditor that comes in looks at the books and records and issues an opinion that will say that whether the financial statements represent fairly the financial or the economical condition of the company and so basically that audit has to do with the auditor going through your financial statements and then asking for support for items on the financial statements and then they can issue an opinion and so basically it begins with a list of items so the auditor usually comes in around February or March to begin examining the prior year the ask for a set of reports and then we go ahead and provide this report to them they make selections based on materiality and based on other audit methodology and send us the list of items that they are selecting and want a support for so for example for payroll if d select certain items of payroll the support will be the payroll register if it's a vendor expense then the support would be the actual invoice from the vendor and so on and so forth and so that's the audit and that's the other piece of the seasonal type work that I have to do and as I mentioned at the beginning of the video I'm gonna tell you the things that I enjoy the most about being an accountant as well as the things that I'd read and just find it really hard to wake up in the morning in the days that I have to do let's begin with the things that I like and the things like the most are gonna be more strategic in nature and that's that's one of the things we talked about and the monthly cycle of the work is the KPI measurement and so the KPI measurement was making sure that the business is performing as you expect it to perform and these are things like measuring the gross margin the cost of customer acquisition day sales outstanding and things like that I enjoyed that a lot as well as analyzing the financial statements and comparing you know actual performance to budgets or comparing the period to prior periods and finding where we are performing well and where we're not performing well and providing commentary on that and then the things that I dislike the most are gonna be the things that are related to taxes and audits and the reason is for taxes I don't have a strong enough background to understand it and for me when it's something that I don't really understand or get that well I with and I fear it and then I end up disliking it with an audit I understand audit I came out from an audit background so I know audit very well I'm you know tailoring and all the program and the methodology so I understand it that's not why I dislike it I really get it it's just that an order - really intrusive and it comes in at auditors usually come in and ask for so many questions or support and things that they need for the audit and that's why I just like it and so I hope you enjoyed this video and I hope that you learn something from it I hope it helps you if you're for example deciding on a major in college whether you should major in accounting or not I hope this gave you sort of an idea on what I have to do now I'm speaking from a controller perspective that's what I do today but in my journey to becoming a controller I've worked as an accountant and a senior and all the other positions and so I've done all of these things that I talked about today and I hope that you understand now the things that I enjoy and the things that I dislike and that gives you an idea as well about the work and if this video was helpful please consider sharing it was someone else that might benefit from it and if you haven't subscribed already Channel please subscribe so that you don't miss out on any of the that I put out weekly and I'll see you in the next one [Music] you