Last updated on April 6th, 2024 at 07:27 pm
Thinking of building a successful career as a financial analyst? That sounds like a good plan. Because finance is one of the most lucrative industries with a wide range of high-paying jobs. Also, the demand for finance professionals is always on the rise across the world.
A professional financial analyst could be a great asset to any company. The role of a financial analyst is to help companies make important financial decisions. You would have to be an expert in interpreting financial statements — such as cash flows, income statements, and balance sheets.
If you love math and are good at analytical thinking, you can become a good financial analyst. For this, you need to be a natural planner, who can make quick decisions by evaluating facts. However, there are certain skills that you would need if you wish to build a successful career here.
And one of them is accounting.
Accounting involves managing financial transactions accurately and generating financial reports. You need to have the ability to maintain account books and prepare financial statements such as profit-and-loss and balance sheets.
Financial statement preparation involves several steps:
Preparing a list of all sales or gross receipts and dividing them into various well-defined categories.
Preparing a list of all expenses and categorizing them accurately.
Reconciling checkbooks and making notes of outstanding items, if any.
Doing all these tasks manually can prove to be cumbersome and time-consuming, especially if you don’t have the experience. Any errors here can affect businesses and even hurt your reputation as a financial analyst.
Easy ways to prepare financial statements
If you are looking for shortcuts, here are two easy ways to ready yourself for financial statement preparation.
Using spreadsheets
Most people use Microsoft Excel to prepare their financial statements. The latest version comes with readymade templates that can make your job easier. There are options to create new templates too, which can be very useful in the long run.
Excel is quite a straightforward application to use. However, financial statement preparation in Excel requires a thorough understanding of accounting.
You will have to build an entire chart of accounts with unique account numbers and account descriptions.
You then have to post transactions using journal entries, after accurately categorizing the amounts into debit and credit columns.
You will also have to create a general ledger that will work as a base for your financial statements.
Using spreadsheets for financial statement preparation requires manual entry, which might lead to errors. And if you are using an older version, you may even run the risk of losing your data. A better alternative would be to purchase accounting software.
Using accounting software
Using an accounting software solution is, by far, the easiest way of preparing financial statements. There are many benefits of using an accounting software system:
Accounting software solutions have readymade templates for ledger accounts that can be directly used.
Posting transactions becomes all the simpler with automatic categorization and calculations.
At any point in time, you can generate any report or financial statement, at the click of a button.
The results are reliable and accurate, with minimal effort from your end.
There are several accounting software solutions readily available in the market. There are also options to get customized software developed as per your requirements. Although these might seem expensive initially, the ease and convenience they bring make your investment worthwhile in the long run.
Building your career as financial analyst
While financial statement preparation is one aspect, there are many things you will have to learn if you want to build a career as financial analyst.
Many institutions and universities offer different certification courses for students who wish to learn financial analysis. Apart from classroom training programs, there are also online courses that you can pursue, right from the comfort of your home.
If you are looking for a holistic learning experience with career services, Imarticus Learning could be your best bet.
Being an award-winning end-tech company, Imarticus Learning offers a step-by-step process to unleash your maximum potential.
Their team of professionals will guide you through your entire career as financial analyst.
Whether you are a freshman trying to build a career or a professional looking at upgrading your skills, you can count on Imarticus Learning.
They empower you with all the tools and resources you would need to achieve your goal.
They also provide one-on-one career coaching, customized mentoring, masterclasses, gamification, simulations, and comprehensive resources.
Imarticus Learning provides access to some of the best educational programs by collaborating with reputed universities and educational institutions.
Being a global company, Imarticus Learning has established centers in most of the well-known cities in India.
Visit their website to learn financial analysis easily and conveniently. Their team of professionals can shape your future and give your career that much-needed boost.
