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 — with salaries on the rise — for both types of accounting. Whether you’re entering the workforce for the first time or considering a career change, here’s what you need to know about the fields of public accounting and private accounting.
Two very different daily routines
Top accounting graduates often take positions at large public accounting firms, including the Big Four — Deloitte, Ernst and Young, KPMG, and PWC. Public accountants provide auditing, tax, forensic accounting, and advisory and consulting services.
But according to the 2022 Robert Half Salary Guide for Accounting and Finance Professionals, a lack of work-life balance is prompting some workers to leave even if they’ve been at the firm for less than a year. This can make for more opportunities for job seekers.
"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."
Corporate or private accounting jobs tend to have a more consistent work schedule with less travel. And as businesses comply with new regulations and complete system implementations, they’re hiring more staff and senior accountants, financial analysts, and payroll professionals.
To attract these candidates, many employers in this arena offer flexible scheduling and telecommuting options.
“If you want to dig in, learn one industry and go to the same desk every day, a private accounting career path will be what makes you happy,” Downs says.
Salaries and hiring outlook
In both public and private accounting, professionals are well compensated, the hiring outlook is strong and the talent shortages they face are expected to continue into 2020.
To compare salaries, see what the Salary Guide has to say about more than 190 accounting and finance jobs. In private accounting, for example, the salary midpoint (or median national salary) for entry-level general accountants in their first year is $48,500. Public accountants in audit/assurance services with up to one year of experience can expect a midpoint salary of $48,750.
For a tax manager in corporate accounting, the midpoint salary is $109,500, and for a tax director, $142,250. Salaries for senior managers/directors in tax services at public accounting firms are $136,750 at the midpoint.
The midpoint is 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. 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 either public or private accounting. For CPA jobs, you need to pass one of the most rigorous professional credential examinations in the business.
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.”
Accounting career paths 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’re 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 normally 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, though that 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.
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 opportunities to work with prestigious clients, travel, and get training and career development.
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.
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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.