Using an external accounting offers significant advantages to small and middle-sized enterprises (SMEs) who don’t have the resources to employ full-time in-house staff. However, when choosing an outsourced specialist to take care of your business’s finances, it is crucial that you make an informed decision, as the terms ‘accountant’ and ‘chartered accountant’ are often used interchangeably, and are rarely understood.
In this article, we’ll unravel the differences between accountants and chartered accountants.
What Is An Accountant?
An accountant is a professional who deals with financial matters and assists businesses in managing their financial records.
- Educational Background: While accountants may have studied accounting at a foundation level through programs such as the Association of Accounting Technicians (AAT), there is no formal educational requirement to become an accountant. Many enter the field through professional experience or self-study. As such, accountants are unregulated so their level of service cannot be verified.
- Scope Of Work: Accountants typically handle basic accounting tasks, such as recording business transactions, preparing financial statements, and generating performance reports. They may also specialise in specific areas, for example tax preparation, bookkeeping, or costing, based on their interests and expertise.
- Professional Status: Unlike chartered accountant, accountants are not members of a professional body. The term ‘accountant’ is not protected, meaning anyone can call themselves an accountant without specific qualifications or certifications.
What Is A Chartered Accountant?
A Chartered Accountant, in contrast, is a highly qualified and regulated professional who works in the accounting field. The main differences between an accountant and a Chartered Accountant lie in their qualifications, professional status, and the scope of their expertise. While accountants handle basic accounting functions, chartered accountants are highly qualified professionals who offer a broader spectrum of financial services and are regulated by a professional body:
- Qualifications And Experience: To become a chartered accountant, individuals must pass a series of rigorous examinations and, typically, complete three to five years of practical work experience under the supervision of a qualified professional. This extensive training and education ensure that chartered accountants have a deep understanding of financial principles and regulations and are unlikely to offer unwise or flawed advice to clients.
- Professional Membership: Chartered Accountants are members of a respected professional body the Institute of Chartered Accountants in England and Wales (ICAEW). As members, they must adhere to a strict code of professional conduct which offers confidence to SMEs outsourcing their accounts for the first time.
- Expertise: Chartered accountants possess a broader range of expertise beyond basic accounting. They can provide specialist advice on complex financial matters, such as securing funds for mergers and acquisitions, cashflow forecasting, personal financial planning, and capital restructuring. Their knowledge also extends to strategic financial management.
Contact Us For Expert Advice
At Vanilla Accounting, our team of qualified Chartered Accountants offer a cost-effective solution to all your accounting needs. To find out more, please get in touch today on 0115 647 4510 or send us a message.
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