If you’re interested in a career in finance, one area that is always in demand is accounting. Everyone needs accounting services or skills at some point over their lives. Yet many people shy away from accounting jobs because they don’t have a bachelor’s degree in accounting or aren’t a CPA. Here is a look at some accounting career options at various ends of the spectrum.
What is Accounting?
Accounting is a professional service broadly charged with maintaining proper financial accounts. Accounting associates prepare, file and audit accounts and records for a variety of people and organizations. Accountants make sure their clients taxes are prepared correctly and paid on time to the proper authority. They must also stay up to date with frequent changes in accounting laws and codes.
What are the Different Careers in Accounting?
Accounting clerks execute various tasks for larger organizations and have more specialized responsibilities. The tasks include data entry of business transactions. They may work on specific areas of a company’s finances, such as a designated accounts receivables clerk, tasked with keeping track of overdue invoices, determining interest charges and collection efforts.
Audit clerks dig into financial statements and ledgers a little closer, checking for computation errors and imbalances. They also ensure that statements are properly categorized and coded. They assist the accountants with the preparation of the statements for reporting.
The compensation is on the lower end for bookkeepers, accounting and audit clerks but increased regulations have put a major emphasis on proper and accurate record keeping in the wake of various scandals and crises. The fines and penalties an organization faces for improper record keeping are stiff, and should keep bookkeepers and clerks in demand for the foreseeable future.
Bookkeepers prepare and check financial records and statements for various organizations. These include financial statements, transactions other documentation. Many of the former tasks of bookkeepers and clerks are becoming computerized so working with spreadsheets and different accounting programs is becoming standard.
Many small businesses use bookkeepers to keep track of expenses incurred throughout a project, including receipts and inventory levels. Bookkeepers also help with purchasing and payroll duties.
Tax Examiners and Collectors
Tax examiners and collectors work for a government organization and are tasked with examining tax returns for compliance with tax codes and laws and determine taxes owed. When necessary, they will contact taxpayers, conduct audits and oversee collections for overdue tax payments. Government budget cuts may temper the growth in these positions in the future as the job outlook is expected to decline 4% over the next decade.1
Accountants are professionals who prepare tax filings and other reporting documents. There is currently strong demand for accounting services-the unemployment rate for accountants is just 3.6%, according to US News.2
Public accountants prepare the taxes for individuals, small businesses and publicly traded companies. Examples include basic personal filings at HR Block, a dress shop with multiple locations, and a spinoff for a mutli-national corporation. Public accountants, especially when serving publicly traded corporations, often have extensive training due to the multitude of tax complexities in business. With regulations including Sarbanes-Oxley and Dodd-Frank, the scrutiny over accounting for publicly traded companies should continue to keep public accountants in high demand.
Many strive to become Certified Public Accountants (CPAs), the highest designation for public accountants. CPAs undergo rigorous qualifiers both academically and ethically. Although it can vary by state, CPAs typically must have completed at least 150 hours of relevant coursework, adequate work experience and successfully passed the grueling CPA exam. They also adhere to strict ethical guidelines. Signing off on documents as a CPA provides a level of confidence that the document or statement is accurate and in compliance. In fact, the Securities and Exchange Commission, SEC, requires that all filings be signed by a CPA.
Managerial accountants work internally for their employer. Their job is to help the company be as cost-efficient as possible. These include cost analyses and budgeting. Managerial accountants may be internal auditors that investigate embezzlement and fraud within a company.
Between the IRS, SEC, FBI and GAO, the government is a very large employer in the field of accounting. Many government accountants work for the Internal Revenue Service, IRS, and are tasked with making sure citizens and organizations are in compliance with tax laws and codes. Government accountants don’t just audit the public. The Government Accountability Office, GAO and the CBO, Congressional Budget Office examines and audits other areas of government.3
Tax examiners, collectors and revenue agents work inside the IRS and perform many of these duties. Tax collectors and revenue agents of the IRS have the authority to garnish wages or impose liens on taxpayer property for non-compliance. Sometimes, tax matters can be very complicated. For example, there has been some uncertainty about whether Yahoo’s proposed spinoff of Chinese consumer giant Alibaba will be considered a tax free spin-off or a sale. The ruling will have significant consequences for many stakeholders.
The SEC and FBI’s accountants are a little more specialized and experienced. They often recruit the services of forensic accountants when investigating suspicious financial activity. Forensic accountants are specialized, tasked with locating and stopping fraud.
What are the Required Skills and Credentials for Accounting?
Proficiency in math is obviously essential, but problem solving skills are equally as important. Working in accounting requires that employees be detail-oriented because a small mistake can mean large fines. Also, being proficient with software, spreadsheets and databases is also expected since computerization has taken over the field. There may be travel time if conducting field audits or visiting clients at their place of business.
Maybe most important is integrity. There are many different accounting standards which brings the temptation for creative or aggressive accounting procedures, many times to reach a profit goal. So much so, that the SEC requires all filings to be signed by a CPA. Sarbanes-Oxley also requires the CEO and CFO to sign off on many documents and filings, with the possibility of penalty for misrepresentation.
For bookkeepers, accounting and audit clerks, a high school diploma or associates degree may be acceptable. Many software programs assist with bookkeeping today but the most important thing to understand is the client and the client’s needs and goals. A software program simply can’t do that. Your job should provide adequate on-site training.
To work in a government position in accounting you may not need a bachelor’s degree, as long as other requirements are met. But to be a tax examiner or revenue agent at the IRS, you’ll likely need a bachelor’s degree.
To work in the private sector, further education is becoming highly preferred, including a Master’s degree in Accounting or taking the CPA exam. This will broaden your career options. The extra year of Master’s level education might actually be required because you’ll need to have logged 150 hours of coursework to sit for the CPA exam, depending on your state.
What is the Compensation in Accounting?
Compensation levels in accounting vary depending on your title. On the lower end, bookkeepers, accounting and audit clerks have a median salary of $35,170 according to the BLS.4 The pay reflects the lower education requirements. Tax collectors and examiners, often working for the government, had median pay of $50,440.5 The median annual salary for an accountant was $65,080 in 2013, according to the Bureau of Labor Statistics (BLS) 6. The top 10% of accountants often earn above $100,000 per year.
To get these higher paying positions consider getting an advanced degree or a designation such as the CPA. Some CPAs become members of Board of Directors, who now have more rigorous requirements for the Board regarding financial competency. Others become consultants and advisors for public companies, also furthering compensation which leads to a higher CPA salary.
How do I Become an Accountant?
There are many different paths you can take for a career in accounting. As with any career, the more you invest in yourself through continuing education, the more desirable you’ll be for employers.
Target the largest employers of accountants. If you are looking for more entry level accounting positions such as bookkeeping and clerks, seek out payroll service or tax prep companies. Many government accounting positions require an associates or bachelor’s degree.
Many accounting professionals, especially those with advanced degrees such as a Master’s in Accounting or CPAs, gravitate towards the private sector. Finance and insurance companies hire the most accountants in the private sector so lean towards getting interviews and networking in those circles.7 Also look at the Big 4 accounting firms-KPMG, Ernst & Young, Deloitte and Price WaterhouseCooper. These firms are tasked with auditing financial statements for many publicly traded companies but are branching into consulting and other services.