Differences between a Chartered Accountant and an Accountant?
Chartered Accountants discussed by Hayvenhursts Chartered Accountants
A Chartered Accountant gives you advice and trustworthy information about your businesses financial records and status. They can be involved in financial reporting, taxation, auditing, forensic accounting, corporate finance, business recovery and insolvency. They will support you with accounting systems and processes and will work alongside you and your business to drive your business forward, bringing skills of strategic forecasting along with expertise in finance, accountancy, auditing and taxation which is essential to each and every business in today’s climate.
CA stands for Chartered Accountant and it is one of the most coveted professional degrees in the world. To qualify as a Chartered Accountant, you qualify with a specialised bachelor’s degree in accounting, followed by a Certificate in the Theory of Accounting (CTA) which is offered as a postgraduate honours degree, or as a postgraduate diploma dependent on the university attended.
Chartered Accountants work in a wide spectrum of roles; financial controllers, directors through to chief executives. They work in a wide range of business sectors; Business and Industry, Financial Services, Practice, Public Sector, Private Sector, Private Equity and so on.
What is the difference between a Chartered Accountant and an Accountant?
A Chartered Accountant has to complete post-graduate honours or diploma degree and following this have had 3-year’s work experience alongside a Chartered Accountant expert who will mentor them through their 3-year work experience. Chartered are experts in the field of accounting, finance and business compared to an accountant which is more of a transactional financial role.
A Chartered Accountant will have a membership in either the Institute of Chartered Accountants (ICAEW) or the Association of Chartered Certified Accountants (ACCA). These organisations only allow membership after the necessary financial and accountancy qualifications have been gained and after their 3-years of work experience has been undertaken.
In theory, anyone can call themselves an accountant if they have been on a basic accountancy course or diploma, regardless of the qualification and their experience. An accountant often specialises in one accountancy area such as; tax and VAT submissions or payroll which they transact in real-time compared to a Chartered Accountant who will give business advice and information for current and future financial aspects.
A Chartered Accountant will have a broad understanding of your business, its needs and how it can become more financially stable and profitable.
What does a Chartered Accountant do?
A Chartered Accountant focuses on providing accurate records of all financial transactions for an individual or business and they tend to work with commercial businesses such as larger non-profit organisations, corporations and e-commerce or industrial sectors.
Chartered Accountants who work in practice provide financial services and advice to businesses which can include; auditing, taxation, accounting, financial analysis, risk management, financial structures and much more.
Chartered Accountants will:
- Work as key senior managers or alongside senior managers and decision-makers within a business, steering it in the right strategic direction, solving problems and implementing change
- Report on the financial performance of a company to impact and direct key business decisions and strategies
- Be trusted advisors, supporting as a consultant or as a practising partner
- Work in a wide range of business sectors and in a broad spectrum of roles, from financial controllers and directors to chief executives
- Advise on a range of day-to-day financial aspects and reporting, preparing corporate and personal tax statements and formulate tax strategies including financial choice, how to plan and manage a merger or acquisition, deferral of taxes, when to expense items and so on
- Plan and manage business audits which include; checking accounting ledgers and financial statements within businesses including processes, manual, automatic and random real-time auditing
- Budget planning, negotiation and analysis, managing an organisation’s current and future financial plans, working alongside marketing, operations, new business, service and HR. They will manage and or participate in decisions about budgeting alongside a businesses’ financial analysis
- Conduct risk analysis for companies to make investment decisions in the future.
A Chartered Accountants role is varied and will change day by day in line with a businesses’ needs. They could be participating in important financial decisions involving mergers and acquisitions, or visiting a customer or supplier to set up a new account and discuss business. A Chartered Accountant has to have a good understanding of both accounting, finance and business and be flexible in the services they offer to align with a businesses’ needs, whether they work for a company directly or if they work within a practice offering services to businesses as they need them.
What does an Accountant do?
Accountants work in the public and private sectors and their main responsibility is to take care of the daily financial transactions for a company or business. Their responsibilities can include; incoming earnings to outgoing payments. They can be responsible for a company’s payroll and tax deductions, paying suppliers, implementing cash, cheque and electronic payments, P&L, preparing tax returns and reconciling the books at year end. An accountant’s duties may also vary depending on what type of accountant they are, for example; the duties of a tax accountant are very different from a general accountant. They may also do some analysis of data and use it to prepare financial reports for tax, VAT, payroll, expenses and balance sheets.
The requirements of an accountant are to give an exact and ongoing record of the financial transactions of an individual or business that they work within, or for, if they work within an accountancy practice.
What is the difference between a Chartered Accountant and a Management Accountant?
A Chartered Accountant and a Management Accountant often get confused when talking about accountancy roles and responsibilities. Both the roles have an influence on a businesses’ financial direction, however, a Management Accountant would normally work directly for a business, whereby a Chartered Accountant would work for a practice that works for and alongside the business.
A Management Accountant will normally be responsible for the financial status of a business as well as managing the finance team within to achieve the businesses’ financial KPI’s. They would be responsible for performance management of the financial team as well as strategic and risk management. A Management Accountant would have the same qualifications and experience as a Chartered Accountant and in addition, have people management experience and responsibilities as well.
A Chartered Accountant will know and understand the business they work for and be able to prepare its financial reports as well as give them advice and guidance for increasing their profit, reducing spend, tax advice, budgets, analysis, company restructures, audits and so on. A Chartered Accountant can work in any sector; private businesses, non-profit organisations and in the public sector.
A management accountant works directly for and within a company, compared to a Chartered Accountant who would work for a Chartered Accountant practice and work alongside many different businesses offering financial guidance, advice, analysis and financial reporting.
A management accountant will have autonomy within a business working directly for them and will have much more influence on the decisions that are made, compared to a Chartered Accountant who will know and understand the business, however, give recommendations and advice for the business to base their decisions on.
What is the difference between a Chartered Accountant and an Auditor?
A Chartered Accountant and an Auditor are both responsible for the accounting processes of a company, however, an auditor is normally responsible for reviewing the work of the accountant as well as the rest of the business.
Auditors are often professionals that work for a business on an ad hoc basis when they need a financial audit completed, or they will work for the business periodically throughout the year.
An auditor would normally have no financial connections to the company to ensure the findings and advice they give is completely impartial.
- An auditor usually performs quarterly or annual accounting audits and work. Auditors are often brought into a company after an internal or external assessment, or if a specific situation has happened such as suspected fraud or malpractice
- The work performed by Chartered Accountants is governed by international accounting standards, however, an auditors’ work is regulated by auditing standards
- Chartered Accountants are a requirement for every business whether directly employed by them or if they work for a practice alongside the company, compared to an auditor which is an optional role or requirement and a way a business uses to improve its policies and processes
- Chartered Accountants create financial statements for a company at year-end and these show the financial situation of a business and how well they have performed throughout the year compared to previous years for profit and loss. An auditor will audit the financial statements and determine their accuracy
What services does a Chartered Accountant offer?
Chartered Accountants who work in practice provide professional financial services to businesses which include; auditing, taxation, accounting, financial analysis, risk management and advice on financial structures. A good and professional Chartered Accountancy Business will take time to learn about and understand your business so they can work alongside you to better it financially.
What benefit is there for your business having a Chartered Accountant?
A Chartered Accountant will help and advise you on many aspects of your business however big or small it is. Having a dedicated Chartered Accountancy firm that you work with regularly ensures they have a good understanding of your business, its operation and its financial status. Every business is different and a good Chartered Accountancy firm will adapt their services to meet the needs of your business and will help you plan and make changes for the future.
Using a Chartered Accountant gives you the assurance that the advice you are receiving is both accurate and informed as they must comply with professional development standards, ensuring their knowledge and skills are always up-to-date. A businesses’ financial requirements often change and the rules and regulations are often complicated and confusing if you don’t have a financial background, therefore, a Chartered Accountant will always give you comprehendible information which is up to date.
Regulated by Professional Bodies
A Chartered Accountant is a professionally qualified individual that is bound by a code of ethics and professional standards. They will have set policies and procedures in place, professional indemnity insurance, complaints and disciplinary procedures as well as undergoing regular monitoring of compliance and quality reviews of their professional practice, giving you peace of mind that their advice and guidance is accurate, measured and monitored.
Chartered Accountants have to have the necessary Chartered Accountant qualifications, been mentored and worked for a wide range of different clients across a range of industries for 3-years before they can legally practice on their own. The qualifications and training builds acute business awareness and strong personal judgement gained from the valuable experience of working with high-performing businesses as well as those under financial pressures.
Chartered Accountants are bound by a code of ethics to uphold a set of professional principles as set out by the ICAEW, in summary: Chartered Accountants are expected to demonstrate the highest standards of professional conduct and to take into consideration the public interest. Ethical behaviour by Chartered Accountants plays a vital role in ensuring public trust in financial reporting and business practices and upholding the reputation of the accountancy profession. A professional and practising Chartered Accountant means demonstrating a commitment to maintaining and developing professional standards, to give you the peace of mind that yours or your businesses financial interests are always put first.
Grow your Business
Using a Chartered Accountant offers your business a huge range of benefits from their business knowledge, advice and financial experience and expertise. A Chartered Accountant who spends time to learn about your business and work alongside you can help you make changes to aid its growth and make it more profitable whilst advising you on financial risks.
What are the risks of not using a qualified Chartered Accountant?
Poor accountancy can have a huge impact on the financial stability of your business as well as raise unwanted attention from HMRC so finding the right Chartered Accountant for you and your business is crucial. False accounting is a criminal offence and can result in imprisonment for business owners who are responsible and accountable for their accounting practices and standards.
What is the ICAEW?
ICAEW is a world-leading professional membership organisation that promotes, develops and supports over 181,500 chartered accountants and students worldwide. They provide qualifications and professional development, share their knowledge, insight and technical expertise, and protect the quality and integrity of the accountancy and finance profession.
When to use a chartered accountant
When you work with an experienced and professional Chartered Accountant you will have the peace of mind that you are working with someone who has extensive business and financial experience in a variety of sectors and financial statuses.
Whether your businesses or personal financial situation is complicated or your understanding of financial systems and processes is limited then finding a Chartered Accountant that you trust and work alongside is crucial. Whether you are a start-up business, you have been in operation for years, are a small or large business then a Chartered Accountant will advise you on the financial management of your business, help you with business plans for growth and profitability. If you are a start-up business they can help you form your financial strategy when you’re creating your business plans, as well as supporting you with budget planning and analysis to set you up from day one.
Working with and alongside a chartered accountant who knows and understands your business will give you peace of mind and the assurance that your financial matters and processes are being handled competently and efficiently.
What should you do when you are looking for a Chartered Accountant?
- Ask for recommendations from other local businesses or your business network
- Search for a Chartered Accountant through the Institute of Chartered Accountants (ICAEW) or the Association of Chartered Certified Accountants (ACCA)
- Determine how much experience they have in your industry
- Ask for a list of all of the accountant’s services and meet with them to discuss them and how they can help your business
- Determine how you and your Chartered Accountant will communicate, how often and for what services
- Ask how you will be invoiced for each of their services
- Ask about any contract you would have with them relating to their services, contract length and costs
Why is it important to use a Chartered Accountant as a start-up business?
When first setting up a business a good Chartered Accountant will help you develop your business plan, create bookkeeping systems, process and procedures, provide efficient tax handling processes for filing annual tax returns and company accounts. As a business owner, you are responsible and accountable for your accounting practices and standards, false accounting is a criminal offence and can result in imprisonment so having the advice and support of a financial expert is advisable and will set you up for long term success.
Why is it important to use a Chartered Accountant for a long-standing business?
A Chartered Accountant can take a comprehensive assessment of your finances, give you advice on all types of financial matters and create forecasts through the year to keep your business in a healthy and prosperous state.
What are the benefits of using a Chartered Accountant if you have a Commercial Property or Properties?
If you have a business which buys and rents commercial property, or you do this as an individual then you are liable for various taxes and it is important to understand what is necessary when accounting for it. An experienced Chartered Accountant will ensure that you are fully aware of what is expected of you in terms of your taxes and the policies and procedures you need to follow for your accounting.
How can a Chartered Accountant help you with your personal tax?
Often people think to use a Chartered Accountant for business finances, however, they can help you and advise you on your personal finances as well.
- It can save you a huge amount of time
- It can reduce your tax liability
- It can prevent you from receiving tax penalties and fines
- It can help you grow your finances
- It can help and guide you on what you can do with your pension, pensions and other personal tax considerations including inheritance tax
- It will remove your tax worries
How can a Chartered Accountant help you with VAT?
VAT (Value Added Tax) is one of the most complex taxes which needs careful financial analysis and planning to ensure that your business doesn’t under or overpay. A Chartered Accountant will work with you to guide you through the always increasing and changing VAT legislation. They will advise you how to minimise the risk of problems with HMRC and can help in the negotiations if any disputes happen.
About Hayvenhursts Chartered Accountant Services
We offer a personal and professional service focused on the needs of each individual client, business and, or family.
Our service to you is built on our ability to understand what you want to achieve in the short, medium and long term and this means that we are by your side when you need us. We have the experience to refine and distil the key consequences of business decisions and we are always thinking and advising you about your tax position.
Whether you are a new ‘start-up’ business looking for an accountant for the first time or an established business looking for more from your accountant then we believe we can provide you with the best accountancy services in South Wales and the surrounding areas. We believe in developing an understanding of our client’s business, needs and goals and offer the personal services of a local accountant, with the infrastructure and experience of a large national accountancy practice.
Choosing an accountant is an important decision and you need to find one that matches your needs, you feel comfortable with, can trust and whose fees are fair. You can call us at Hayvenhursts whenever you need help or advice without the fear of being charged every time you make a phone call.
We want you to feel comfortable to pick up the phone to us whenever you need to and for whatever you want. You will always receive good, honest, sound and understandable advice and we will work with you in the way that suits you; in person, on the phone or online.
Here are some of the services we offer:
- Accounts Preparation
- Bank Accounts
- Book-keeping Healthcheck
- Business Growth
- Business Healthcheck
- Business Plans
- Business Valuations
- Commercial Property
- Company Formation
- Company Secretarial
- Contractors and IR35
- Inheritance Tax Planning
- Management Accounts & Information
- Management Systems
- PAYE Healthcheck
- Payroll & PAYE Returns
- Personal Tax
- Property Tax
- Raising Finance
- Reduce your SRA Audit Costs
- Registered Office
- Strategic Planning
- Tax Disputes
- Tax Enquiries & investigations
- Tax Planning
- Tax Returns & Self-Assessment
- VAT Healthcheck
- VAT Planning & Disputes
- VAT Registration
- VAT Returns
You can read our really helpful Frequently Asked Questions here:https://hayvenhursts.co.uk/why-us/faq/ which will help you understand many of the financial queries or questions you may have.
Contact us today on 02920 777 756 and we will answer any questions you have or we can arrange for one of our Chartered Accountant experts to call you or come out and see you at a time convenient to you.