Administrative Accounting Details

Administrative accounting is, essentially, a combination of two vital roles. An administrator (or admin for short) is someone who organizes events, schedules, and plans while keeping track of all of them and making sure they're done smoothly. An accountant is someone who handles financial data, examining them, and producing a valuable analysis regarding the current financial state, previous financial performance, or future financial projections. So an administrative accountant provides valuable analysis on administrative work to increase administrative efficiency while keeping the current data/reports fully functional.

Administrative accountants usually work closely with management or have similar responsibilities to management accountants. Administrative accounting collects all required data, examines it, produces a conclusion, then hands it to the management for further action. An administrative accountant collects a wide variety of data, including financial reports, staff schedules, and inventory reports.

The type of analysis an administrative accountant produces is a current state analysis, which tells a company about their current net worth, how many goods they produce per day, and how many employees they have. Most importantly, they archive all of it. Archiving data is essential since you can use it to analyze and compare data sets. From analyzing that data, you can identify trends or patterns that can affect calculating predicted expenditure and revenue, determining how many staff members your company needs, and even exploring the possibility of manufacturing a new product.

Example of Administrative Accountant

The actual job description of an administrative accountant is determined by the company’s needs and current situation. It’s not always black and white; sometimes you get more accounting work, sometimes you get a lot of analyzing work. And sometimes you’re assigned to assist other accountants. The definition of an administrative accountant only helps to establish a baseline for what you can expect. And even then, you should still take it with a grain of salt.

Administrative accountants should possess a high degree of concentration and focus because they deal with lots of numbers and graphs. A lapse in concentration could cause a misplaced comma that turns one million into one billion. Mistakes like this lead to inaccurate reports that could cause other adverse effects. An administrative accountant needs a positive attitude and great communication skills because they often follow up with other staff to ensure a project is successfully wrapped up.

Here’s a list of a typical administrative accountant duties:

  • Organize staff attendance of future events
  • Creating payroll for staffs and make sure they’re deposited properly
  • Making sure tax is properly calculated in any revenue or expenditure
  • Keeping a proper archive of the company’s financial records
  • Analyzing current or old data to produce a meaningful conclusion
  • Projecting company’s future expenditure and revenue
  • Determining the company’s profitability
  • Managing the company’s inventory records

History of Administrative Accounting

Accounting is a working field derived from writing, mathematics, and money. Historians found the earliest practice of accounting happened in Ancient Mesopotamia (Modern Middle East) dated back as far as 3000 BC. The Arabic empires around Mesopotamia used simple writing to record transactions of traded goods. The Globular Envelope (or Bulla), is a surviving example of early accounting on how ancient civilizations mark the authenticity of their products.

Of course, any history writing is incomplete without The Roman Empire, which is widely regarded as the first biggest, strongest, and wealthiest empire in entire human history. The sheer wealth they had can’t be counted with the simple methods used in Ancient Mesopotamia. They had to expand their methods to include ledgers, which involved an accountant who would record transactions in books to keeping track of them. The ledger technique ensured every citizen was taxed properly, their soldiers were paid in full, and debts were fulfilled in time. The result? A lasting golden age and a huge leap in accountancy practices.

The invention of computers makes ledgers obsolete, and that's a good thing! Computers can count faster and more accurately than any human with a book can. The efficiency that computers bring also drives the growth of corporations. Bigger corporations mean bigger data to organize and challenges to be solved. That's why accounting is now further classified into multiple branches. These include research accounting, education accounting, cost accounting, tax accounting, auditing, government, management, financial, and ultimately administrative accounting.