Posted by Accountemps on Saturday, January 2, 2016 - 09:30 | Follow me
Whether you’re a new graduate or looking to change gears in your career, you’ve likely considered the choice: Public accounting or private accounting?
The answer depends on the type of work you see yourself doing, as well as your personality traits and career goals.
Private, or corporate, accountants are employed by individual companies. Public accountants work for companies that provide accounting services to others. While public accountants gain experience working with a variety of businesses, corporate accountants become accounting experts in their specific companies and industries.
Curious about salaries and hiring for public accounting jobs? Fast-forward to here.
If you're weighing the prospects of public vs. private accounting, take a look at the summary below, and then dive deeper to explore the differences and similarities.
Education and certifications required
An accounting or finance degree is essential for entrants into both private and public accounting. Public accountants must also become CPAs and obtain their certified public accountant license. While private accountants are not required to be CPAs, certifications can boost their salary potential and show a commitment to the standards and ethics required by their state board of accountancy.
Job experience and knowledge
In general, because public accountants work with multiple clients, they must be able to analyze accounting systems and business functions to determine whether a business is running efficiently. Private accountants must have a deeper understanding of accounting transactions within their specific industry, including payroll, accounts payable, reporting and billing.
Work environment: 40 hours or 40-plus hours
Billable hours are the focus for public accountants, and 40-plus-hour workweeks are often the result. Public accountants may work with many types of companies, which provides them with diverse experience. These companies can be spread throughout the region or country, so frequent travel is often necessary. Alternately, private accountants work for single companies and can typically expect something closer to the standard 9-to-5 workday with much less required travel.
Personality traits and work environments
Because their roles can involve traveling and working with so many different clients, public accountants must have sharp soft skills. They must be willing to adapt quickly to changing work environments due to frequently working remotely. They also need to develop non-accounting skills, such as written communication skills, for varied client interaction.
Private accounting jobs work well for individuals who desire a “home base” and who can communicate well with coworkers. Private accountants must also have the desire to specialize in a particular industry.
Long-term goals and career paths
The career plan for public accountants is relatively straightforward. Most begin their careers as entry-level staff accountants. Then after a few years they may advance to senior accountant positions and eventually assume management or even partnership roles at their firms. Private accountants follow similar career paths, often starting as entry-level staff accountants before rising to managerial or, in some instances, CFO roles. Private accountants also attain a high level of industry specialization as they progress through their careers.
Job outlook and salary comparisons
According to Robert Half's latest Salary Guide, the hiring outlook for public and private accounting is strong. Candidates with three or more years of experience are in demand, but companies are also hiring new graduates.
Salaries are generally higher in public accounting, but private accounting firms are increasingly offering additional benefits, such as bonuses, stock options and pensions, to compete for qualified candidates.
In private accounting, the starting salary for entry-level general accountants ranges from $44,250 to $59,500 in 2017, depending on the size of the company. That's a 3.8 percent increase from 2016.
Public accountants in audit/assurance services can expect entry-level salaries ranging from $50,000 to $73,500 in small to large companies in 2017. That's up 4 percent from the year before.
Regardless of whether you choose to enter public or private accounting, remember that lots of accounting professionals work in both sectors at some point during their careers. While the general consensus is that starting out in public accounting to gain a wide base of experience is a smart choice, many accountants begin in private accounting and enjoy long, successful careers.
Don't want to miss our hot-off-the-press career insights? Subscribe to the Accountemps blog.
Editor's note: This post was originally published in January 2015 and was updated recently to reflect information from the new Salary Guide.