This guide examines what makes a chartered accountant different from a regular accountant. It looks at the education and responsibilities of each job type.
What is An Accountant?
An accountant performs various finance-related tasks for an individual or a single business. This includes financial analysis, bookkeeping, preparing tax-related documents, and so on. They record every financial transaction that an individual/business makes and file these records accordingly.
The main difference between an accountant and a chartered accountant is education. To become an accountant, all you need is an AAT Foundation Certificate in Accounting.
While other qualifications and educational achievements (and work experience) would be appreciated, you can easily get an entry-level accounting job and work your way up with an ATT.
As aforementioned, an accountant maintains financial records on behalf of an individual or a company. They prepare these records for tax purposes and for making financial statements. The role demands high accuracy and impartiality.
When not preparing financial documents for a company’s annual tax returns, an accountant can take on more routine finance-related tasks. For example, they organize salaries and payrolls, issue invoices, pay invoices, and so on.
In larger companies, an accountant may specialize in a specific job role. For example, an accountant can focus on bookkeeping, auditing financial statements, or tax returns.
The cost of regular accountants is far below that of chartered accountants. It would cost you around £25 per hour to hire the services of an accountant temporarily.
In the UK, an accountant is paid £34,839 per year (based on accountant salary data provided by Indeed). So, if you were to hire an accountant full-time, you’d have to pay them a salary near to this figure (depending on the size of your company, location, etc.).
What is a Chartered Accountant?
Chartered accountants take on more advanced tasks and responsibilities than regular accountants do. They can be relied upon to perform more in-depth financial analyses and make fiscal forecasts that you can depend upon. Because of their more advanced capabilities, chartered accountants need more education.
To become a chartered accountant, you need a little more than an AAT Foundation Certificate. You need to first gain an AAT Professional Diploma in Accounting and be qualified with either the ACA or ACCA.
You also need to gain a chartered accountant education from either The Institute of Chartered Accountants in England & Wales (ICAEW), in Scotland (ICAS), or in Ireland (CAI). Courses provided by these institutions include 15 examinations and continued education after you qualify.
To enrol in a chartered accountant course, you need to have at least 450 hours worth of work experience as an accountant. Within that time, you also need to build up a significant portfolio.
Besides education, Professional Indemnity Insurance is a requirement for all practising chartered accountants.
A chartered accountant can perform the jobs of a regular accountant, and also more advanced financial duties. Specifically, they can perform strategic financial and investment planning and business advisory services.
If you’re planning on doing something with lots of financial risks involved – like buying over another company – a chartered accountant will be able to conduct risk analysis. They’d also be able to assess your company’s performance and identify financial and investment opportunities.
Other advanced accounting jobs that a chartered accountant can complete include:
- In-depth cash flow analysis
- Corporate finance advice
- Forensic Accounting
Performing more advanced jobs, a chartered accountant may work more closely with senior members of management as well as company shareholders.
Chartered certified accountants can work for major corporations, high-net-worth individuals, government bodies, and public accounting firms. They may offer specialist accountancy services on a one-time basis to those who need them.
To hire the services of a chartered accountant temporarily, you may have to pay as much as £150 per hour. The professional services provided by chartered accountants are high in demand, and the high price they charge hourly reflects this.
The average annual salary of a chartered accountant is £84, 500 (according to the chartered accountant job profile on Prospects). So, if you were to hire one full-time, you could end up paying £84k per year for their services.
However, the cost of chartered accountants depends on several factors, including the size of your business, your annual turnover, and how many employees you have.
The main difference between an accountant and a chartered one is the education and responsibilities of each. Accountants deal with more basic tasks such as keeping financial records, dealing with payrolls, and so on. Chartered accountants, on the other hand, take on more advanced financial practices.
You should hire a chartered or a regular accountant based on the level of financial management you need.