When Kathleen Downs, a vice president with Robert Half Finance & Accounting, talks to job seekers about the accounting career path, she emphasizes the important choice to be made between public accounting and private accounting. It involves considerations about personality traits, long-term goals, salary aspirations, work environments and job outlooks.
"If you want to work for an individual company in a specific industry, you should go into corporate — also called private or management — accounting," she says, touching on the basics. "If you want to work for a company that provides accounting services to others and gain experience working with a variety of businesses, that would be public accounting."
The demand is great for both types of accounting, with salaries on the rise in 2018. Whether you’re a new graduate entering the workforce for the first time, or you’re considering a career change, here’s what you need to know about the fields of public accounting and private accounting.
Variety vs. consistency in accounting jobs
The daily routine can vary quite a bit between public and private accounting.
"Public accounting jobs involve variety, long work hours and sometimes frequent travel," Downs says. "Public accountants need to have the ability to work in an ever-changing environment from day to day, the ability to learn quickly and a willingness not to have a ‘home,’ so to speak.”
Public accountants provide auditing, tax, forensic accounting, advisory and consulting services. The largest accounting firms are the Big Four — Deloitte, Ernst and Young, KPMG and PWC. Tax season is the busiest time of the year for public accountants who handle personal income taxes.
Corporate or private accounting jobs, on the other hand, tend to have a more consistent work schedule with less travel and better work-life balance. Accountants with fiscal or calendar-year reporting schedules experience crunch times at quarterly closes and year-end.
“If you want to dig in and learn one industry and go to the same desk every day, private accounting will be what makes you happy,” Downs says.
Career advancement — to partner or CFO
The career path for a public accountant is fairly straightforward. You typically begin in an entry-level accounting position as a staff accountant. After several years, you are likely to advance to a role as a senior accountant before moving up to a managerial position. Ultimately, you may rise to a coveted position as partner.
Similarly, private accountants will also start their careers in entry-level staff accountant positions and typically move up into managerial roles over the years. The CFO is the top of the ladder in private accounting. Taking the CFO career path can be even more challenging than becoming a partner in a CPA firm. Changing industries as a corporate accountant can also be formidable, but it can be done.
Salaries and hiring outlook
Public accounting salaries are generally higher than private accounting salaries, although both fields are well compensated. The hiring outlook for both public and private accounting is strong. Candidates with three or more years of experience are in demand, but companies are also hiring new graduates.
The best way to compare salaries is with the 2018 Robert Half Salary Guide. In private accounting, the midpoint salary for entry-level general accountants is $45,000. Public accountants in audit/assurance services with up to one year of experience can expect a midpoint salary of $46,000.
Salaries for senior managers/directors in tax services at public accounting firms are $132,000 at the midpoint. For a tax manager in corporate accounting, the estimated midpoint salary is $104,000, and for a tax director, $135,000.
What is the midpoint? That's the level in which candidates have average experience with the necessary skills to meet the job requirements, and the role may be in an industry where competition for talent is moderate. The salaries listed in the Salary Guide reflect starting pay and are based on actual placements throughout the United States, as well as an analysis of the demand for the role, the supply of talent and other market conditions. Bonuses and benefits are not taken into account.
Education, licenses and certificates
In terms of education, you should earn your bachelor's degree in accounting, finance or business to work in public or private accounting. For CPA jobs, you need to pass one of the most rigorous professional credential examinations.
While private accountants are not required to hold finance and accounting certifications, there are several, including the CPA, that can boost your salary potential and show your commitment to the standards and ethics required by your state board of accountancy.
"Your CPA license will be a valuable asset, even if you ultimately pursue a career as a corporate accountant," says Downs. “Plan to get your CPA early in your career. It will forever pay dividends in terms of promotions and opening doors for new opportunities. And once you get the CPA, do not ever let it go inactive.”
More advice for those starting out
Downs advises new graduates to begin their careers in public accounting, as the experience will build a strong foundation for the remainder of their accounting careers. Among the advantages are the opportunity to work with prestigious clients, to travel, and to get training and career development. After several years in public accounting, some will decide they prefer the work-life balance or industry specialization that corporate accounting offers.
Of course, some new graduates won’t begin their careers in public accounting for a variety of reasons — and that’s OK too. “If you don’t want the travel or the hours, then find a company that is large enough to provide a fairly constant learning challenge and varied responsibilities,” says Downs.
Either way, accountants can enjoy long and successful careers, whether they choose a career path in public accounting or private accounting.
Ready to take a closer look at public or private accounting opportunities in your area?
Kathleen Downs, a vice president with Robert Half Finance & Accounting, started with the company in 2000. Before that, she was CEO of a recreation/retail/education organization in Bonn, Germany. Kathleen is actively involved with a number of professional organizations within the finance and accounting field and sits on several not-for-profit boards.