A day in the life of an Accountant
A DAY IN LIFE OF AN ACCOUNTANT
Question: ‘Why does someone become an actuary?’
Answer: ‘Because they find accountancy too exciting!’
An old joke, that you have probably heard before and I fear it is probably more insulting about accountants than actuaries, who are seen as slightly mysterious figures, who are brilliant and whose work we don’t really understand anyway.
But as the economy crumbles and those titans of industry, the highly paid bankers, hedge fund managers, derivatives dealers and merger and acquisition specialists to name a few, are now more reviled than revered, it is a career in accountancy, that I am hearing on more and more students lips.
So, the question is, whether it really is as boring as generally perceived or is there more to it? The answer is, of course, it is what you make of it.
At Cameron Baum, Chartered Accountants, we are considered a small firm as a result of our being a two partner firm and our experience is very different from the ‘big boys’ such as PriceWaterhouse or Deloittes, but nevertheless, the range of work and variety of problems we encounter and solutions we offer, can hardly be called boring.
Below are a series of short scenarios, that we encounter on a regular basis and at the end of this, see if you think we are really as grey as they say.
(all characters and stories are fictitious and are only illustrative)
Scenario 1
Client: ‘ Hi, I think I may have problem, can you help?’
Accountant: ‘ Sure. What’s wrong?’
Client: ‘ I have had an inspection from HM Revenue, PAYE visit and they think I owe them £100,000 in tax arrears. Something about self employed people really being employed’.
Accountant: ‘ We come across this all the time and I am sure we can help’.
The result: The l;iabiltiy is reduced to £5,000, including interest and penalties.
Scenario 2
Client ‘The bank have been on the phone and they want to withdraw their overdraft facility. Can you help?’
Accountant: ‘ What reason have they given?’
Client: ‘Well, we have exceeded the limit a few times recently and they want to know why and I am so overworked trying to keep this business going, that I am not sure myself.’
Accountant: ‘ The first thing is not to panic. I will come over and take a look at your management accounts, which I know your bookkeeper maintains on your accounting system, then we can start to get a picture of what has been happening. Do you have list of trade debtors and creditors?
Client: ‘Yes, but I rarely look at them. I just watch the bank and if it’s OK, then things are fine.’
Accountant: ‘ I know,, but when things are not fine, what then?.
Client: ‘I call you!’.
Accountant:’ Once we have seen the trading results and the debtors/creditors position, we can then start to put together some management accounts and a profit and loss and cash flow forecast, to map out the next few months and see where we are going. Can I see you later today?’
‘Sure. I feel better already’.
Scenario 3
Client: ‘I want to get rid of a member of staff and I intend to sack her this afternoon. Can you work out her final pay?’
Accountant: ‘ Why are you sacking her?’.
Client: ‘Her work has dropped off and I don’t like her anyway and since she has only worked here a few weeks, she’s going first!’.
Accountant: ‘Just wait a moment. Although wrongful dismissal claims are not valid in the first year, you can still get done for discrimination. You need to go through the correct process, or else risk an Industrial Tribunal and possible unlimited penalties, if they find against you.’.
Client’ I am fed with all this legislation. Can you deal with this for me?’.
Accountant:’No problem; I will manage the process for you.’
Client: ‘ Great. Thanks.’
Scenario 4
Accountant’ I thought I would give you a call and see how thing s are going’.
Client’ Great. I have managed to let out my flat in Spain and I sold a couple of flats that I have had in Docklands’.
Accountants; ‘Aha! These investments are all news to me. I don’t remember them being on your tax Return’.
Client: ‘Of course not; the foreign property has nothing to do with the Revenue and the flats in Docklands just covered the mortgage payments’.
Accountant: ‘I am afraid your are wrong on both counts. Since you are domiciled in the UK and live here your foreign earnings are very much of interest to the Revenue and
You will have to declare the rental income and expenses. Furthermore, you still needed to declare your rental income, even if there was no profit. I will need you to gather together the income and expenses since you bought these properties and we can take it form there’.
Client’ Thank for nothing. I suddenly; don’t feel so great!’.
Scenario 5
Client: ‘I am thinking of purchasing a new business will fit perfectly into mine and I want you to take a look at it’.
Accountant: Great; I look forward to it. Are you buying the company or the business?’.
Client ’Not sure. Why?’
Accountant: ‘There are considerable tax advantages to the latter and far less risk, as you don’t know what’s lurking in the company’s past’
Client: ‘ That’s why I’ve got you’. When you go and take a look at it?’.
Accountant: ‘ We can start next week; let’s have lunch and see what’s involved’.
Client:’OK – but you are paying!’.
These are just a small sample of the myriad of issues that e are faced with every day.
Still thin accountancy is boring?