Essential accounting skills include strong attention to detail and an understanding of financial statements. When writing your accounting resume, skills should be a priority: you want to convey an in-depth knowledge of accounting principles and proven reliability and adaptability. But, what skills do you need for accounting resumes? Read on to find out!
Must-Have Skill for Accountants: GAAP
“GAAP” stands for generally accepted accounting principles — these are the guidelines that all public accountants in the United States must follow. Specifically, GAAP principles are the rules, regulations, and standards surrounding the world of public financial reporting.
Understanding the principles of GAAP is one of the most crucial skills needed for accounting careers. While mastery of GAAP is a requirement for certified public accountants (CPAs) and auditors, many private companies also adhere to GAAP standards. GAAP helps keep accountancy transparent, standardized, and consistent, and ensures the accurate comparison of accounting data between companies.
The three main parts of GAAP are:
- Basic accounting principles, which seek to keep currency units standard, sort transactions accurately, and keep reporting timeframes clear.
- The Financial Accounting Standards Board (FASB), which routinely updates rules to ensure companies and organizations are utilizing best practices.
- Accepted industry practices, which outline the guidelines for various industries. For example, banks have different ways of reporting financial information than small businesses because the nature of the work is entirely different.
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Top Technical Accounting Skills
Accounting careers involve crunching numbers and keeping financial data organized. Many crucial accounting skills for resumes are hard skills, or those that can be learned or taught, since employers want to see that you’re well-versed in the mathematical and analytical tasks required for this job.
Some important technical accounting skills to include are:
- Account balancing: Whether it involves balancing your personal checkbook or managing the incoming and outgoing money for a large business, knowing how to balance accounts is vital for an accountant.
- Project management: Depending on the size of the company, an accountant may be working fairly independently, which means they’ll need to manage their own projects effectively to keep everything running. Even in large corporations, though, knowing how to break down a big project and keep it on track is an invaluable skill.
- Financial reporting: Reporting a company’s finances is a key aspect of being an accountant. This skill set includes knowing how to read financial statements, compile the data needed to create new statements, and convey the information. The most important financial statements accountants create and analyze include cash flow statements, income statements, and balance sheets.
- Modeling data: Accountants may need to create models to help project future financial performance or develop budgets. It’s important to understand how to model data, usually in Excel, in a clear and concise way.
- Analytical thinking: Analytical skills allow an accountant to solve complex problems, find creative solutions, and analyze data effectively.
- Written communication: An important part of an accountant’s job is reporting financial information, so writing skills are vital. Accountancy can also involve some technical writing, including memos, summaries of analysis, and letters.
- Tax documentation: Accountants are often responsible for preparing and filing tax documents for their clients, so knowing the ins and outs of the various tax forms is critical. Knowing the tax documents also requires understanding tax codes.
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Accountants often use accounting and financial software to compile and analyze data. Beyond a basic level of computer literacy, familiarity with the following computer programs is useful:
- Excel: creating spreadsheets and data modeling
- PowerPoint: disseminating information
- QuickBooks: accounting software for small to medium-sized companies
- Xero: cloud-based accounting software for small to medium-sized companies
- Sage: software for accounting, payroll, tracking transactions, and human resources
- FreshBooks: accounting software for small to medium-sized companies
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Calculations and Formulas
In an accountant’s day-to-day work, they utilize specific formulas and calculations, including:
- Current ratio formula: The current ratio measures a company’s ability to pay short-term commitments, such as debts. The formula involves dividing the company’s current assets by its current liabilities.
- Quick ratio formula: The quick ratio, also known as the acid-test ratio, is used to measure if a company can use its quick assets, cash, or near-liquid assets to cancel out any current liabilities, such as debts. The formula requires dividing any current assets that can be liquified (turned into cash) by the company’s current liabilities.
- The accounting equation: The accounting equation shows the relationship between a company’s assets, liabilities, and equity, which form the basis for bookkeeping. Assets are equal to a company’s liabilities plus equity.
- Profit margin formulas: Profit margins are vital for determining if a business is generating enough profits to survive and can inform budget decisions.
- Net working capital (NWC) formula: NWC is a calculation that helps accountants understand how well a business can handle its current debts or liabilities.
- The debt ratio: Debt ratios describe a company’s financial health by comparing its total debt to total assets.
- Asset turnover ratio: The asset turnover ratio shows how well a company leverages its assets to generate profits.
- EBITDA: Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a measure of corporate profitability and is especially useful for certified management accountants (CMAs).
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Important Accounting Soft Skills
While employers want to know an accountant can do the day-to-day financial reporting and analysis, they also want to find someone who’s a great team member and coworker. You need a variety of soft skills in accounting to be able to work and communicate effectively with others. Some of the most vital soft skills accountants need include:
Particularly for an accounting manager, skills as a leader are essential. Leadership skills can help you progress at work and rise through the ranks regardless of your role or industry. Accountants must be able to take charge of their work, hold themselves and their teams accountable for mistakes, and make firm decisions — all hallmarks of a great leader.
Attention to Detail
A lot is resting on an accountant’s shoulders: inaccurate reporting in financial statements or tax documents could devastate a business. So, having a sharp eye and careful attention to detail is crucial for an accountant.
The information accountants handle every day is highly sensitive, and the work often includes tight deadlines. It’s important for an accountant to always be dependable, reliable, and trustworthy.
The needs of a business can change quickly — companies can grow or shrink instantly. Accountants must stay adaptable so they can keep up with any changes the company may have. Additionally, with regular updates to rules set by the FASB, accountants need adaptability skills to avoid getting too set in old ways of working.
Accountants are responsible for many documents, statements, files, and spreadsheets. Strong organizational skills are key to keeping on top of everything and ensuring nothing slips through the cracks.
>>MORE: Learn how to choose the best accounting career path.
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4 Resume Tips for Accounting Skills
While you need to have the right accounting skills to succeed, you also need to know how to showcase those skills on your resume. Here are some tips for the best ways to include your accounting skills on your resume.
1. Use Specific Examples
If you have practical experience balancing accounts, using the current ratio formula, or in leadership roles, give those examples within your work or internship experience section to demonstrate your abilities.
2. Mention Certifications and Coursework
If you have a certified public accountant (CPA) license or have taken courses specifically for tax accountancy, mention that! These things help show the employer your expertise and experience in the field.
3. Highlight Skills Rather Than Your Degree
Although a bachelor’s degree is necessary, your major may be less important. If you’ve been acing CPA practice exams or helping your uncle’s small business file its taxes for years, your major may be irrelevant as long as you have the needed skills.
4. Utilize Your Cover Letter
If you don’t have any work or internship experience in accounting but know you have the skills to succeed, use your cover letter to explain this. Even if you have experience, your cover letter is a great place to talk about your passion for accounting and to show off certain skills, like attention to detail and written communication.
For more guidance on the job application process, explore our Job Application Basics series below. This five-part series will show you how to increase your chances of getting hired. Start with the intro, then check out all five parts:
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