An accountant is a professional who performs accounting functions such as audits or financial statement analysis. Accountants can either work internally for a specific company, known as a private accountant, or externally for an accounting firm, known as a public accountant. The primary job responsibilities of an accountant include recording financial transactions, conducting audits, analyzing costs, taxes and various financial documents.
What Does an Accountant Do?
Accountants have a wide range of responsibilities, but these are some of the most common tasks they perform:
- Prepare and examine financial records and statements
- Ensure accurate and timely financial reporting and compliance with laws and regulations
- Analyze financial information to provide guidance and recommendations
- Provide tax planning services and prepare tax returns
- Audit financial documents and assess financial operations
- Advise on budgeting and cost containment strategies
- Manage budgets and forecasts
- Report on the financial standing of an individual or organization
- Work on analyzing costs, revenues, financial commitments and obligations
Essentially, an accountant’s main role is to process and communicate financial information in an accurate and timely manner. This helps individuals and organizations understand their financial position and make informed business decisions.
What are the Different Types of Accounting?
There are several different types of accounting that accountants may specialize in:
- Financial accounting – focuses on preparing and presenting financial statements for external users, such as investors and creditors.
- Management accounting – provides financial information and analysis to help managers make decisions within a company.
- Tax accounting – specializes in tax compliance and tax planning for individuals and businesses.
- Auditing – verifies the accuracy and relevance of a company’s financial statements and accounting records.
- Forensic accounting – investigates suspected fraud or financial irregularities.
- Public accounting – provides accounting services to clients as an independent accountant or through an accounting firm.
While all accountants deal with financial data, their specific roles and job duties can vary significantly depending on their area of expertise.
What Skills Does an Accountant Need?
To be successful as an accountant, there are certain skills and qualities that are extremely helpful:
- Analytical skills – accountants must analyze large amounts of financial data to spot trends, inconsistencies and opportunities.
- Attention to detail – strong attention to detail is critical for avoiding errors.
- Math skills – accountants need to have strong math skills for tasks like auditing records, forecasting and budgeting.
- Communication skills – accountants must explain financial information clearly to clients, executives and government agencies.
- Computer skills – knowledge of accounting, auditing and spreadsheet software is a must.
- Ethics – accountants must demonstrate integrity, objectivity and confidentiality.
- Time management – accountants often work under tight deadlines and must manage their time efficiently.
What Are the Education Requirements to Become an Accountant?
The education required to become an accountant varies slightly depending on the specific career path. But in general:
- A bachelor’s degree in accounting or finance is the minimum requirement for most accountant positions.
- Nearly all accountants choose to pursue certification, such as the Certified Public Accountant (CPA) credential.
- A master’s degree, such as a Master of Business Administration (MBA), is recommended for accountants who want to pursue high-level leadership roles.
So in summary, a bachelor’s degree is essential, certification is highly encouraged and a master’s degree can be advantageous for career advancement.
What Are the Steps to Become an Accountant?
If you want to become an accountant, you would typically follow these key steps:
- Earn a bachelor’s degree – Complete a bachelor’s program in accounting, finance or a related field.
- Obtain your CPA license – Pass the four-part Uniform CPA Examination and meet other licensing requirements.
- Gain work experience – Consider completing an internship while in school. Most states require 1-2 years of work experience under a licensed CPA to obtain your full license.
- Earn a master’s degree (optional) – A master’s opens up additional job opportunities, including management roles.
- Maintain your CPA license – Requirements include completing continuing education credits and paying membership fees to your State Board of Accountancy.
What Are the Benefits of Being an Accountant?
Some of the great perks and advantages of an accounting career include:
- Excellent job prospects – Accounting is a stable, in-demand career with strong growth predictions.
- High earning potential – The median salary for accountants is nearly $73,000/year, with top earners making over $125,000.
- Valuable certification – A CPA license signals expertise, boosts job prospects and increases pay.
- Transferable skills – Accountants gain analytical, communication and leadership abilities valued across industries.
- Ability to specialize – You can focus on your preferred area of accounting, such as taxes, auditing or forensics.
- Opportunities for advancement – Accountants can progress into managerial roles or become partners in firms.
Overall, accounting offers a stable, rewarding career with great growth, salary and advancement opportunities.
What Are the Challenges of an Accounting Career?
Though accounting has many advantages, there are also some potential downsides to consider, such as:
- Long hours – Accountants can work over 40 hours/week during busy seasons, such as tax time.
- Stress – Deadlines, audits and attention to detail create pressure.
- Continuing education – Ongoing certification requirements mean new skills and knowledge must be learned.
- Travel – Public accountants may travel frequently to audit clients on-site.
- Irregular hours – Overnight shifts and weekends may be needed to close the books during reporting periods.
However, work schedules and environments can vary significantly between companies, industries and even different times of year. Many accountants work normal 9-5 schedules most of the time.
What Are Examples of Accounting Careers and Job Titles?
Some examples of job titles for professional accountants include:
- Staff Accountant
- Junior Accountant
- Senior Accountant
- CPA – Certified Public Accountant
- Auditor
- Cost Accountant
- Tax Accountant
- Forensic Accountant
- Financial Analyst
- Management Accountant
- Controller
- Chief Financial Officer (CFO)
Entry-level positions like staff accountant or junior accountant require a bachelor’s degree to get started. From there, accountants can advance into senior roles, management and executive-level positions with additional certification and experience.
How Much Do Accountants Earn?
According to the U.S. Bureau of Labor Statistics, the median annual salary for accountants and auditors is $73,560. However, salaries can vary considerably based on these factors:
- Experience level – entry-level salaries start around $45,000, while senior accountants can earn over $120,000.
- Industry – accountants working in finance, insurance and higher education tend to have the highest pay.
- CPA certification – having an active CPA license typically results in a 5-15% boost in salary.
- Position and employer – corporate accountants and those working for large firms earn more than public sector roles.
- Geographic location – accountants in major metro areas like New York City and San Francisco earn 10-20% more than the national median.
Overall though, accounting salaries are quite lucrative, especially for CPAs, senior managers/executives and accountants with specialized expertise like forensic accounting.
Average Accountant Salaries by Position
Job Title | Average Salary Range |
---|---|
Entry Level Accountant | $45,000 – $60,000 |
Staff Accountant | $50,000 – $70,000 |
Senior Accountant | $65,000 – $90,000 |
Accounting Manager | $85,000 – $115,000 |
Controller | $90,000 – $150,000 |
CFO | $125,000 – $300,000+ |
What Industries Employ the Most Accountants?
Accountants work in nearly every industry, but some sectors employ more accounting professionals than others. Top industries for accountants include:
- Finance and insurance – 29% of accountants work here. This includes banks, investment firms and insurance companies.
- Management of companies & enterprises – 10% of accountants. Corporate accountants working at the companies themselves.
- Manufacturing – 8%. Accountants in the manufacturing industry.
- Government – 8%. Local, state and federal government agencies all employ accountants.
- Health care and social assistance – 7% of accountants. Hospitals, doctors offices, nursing homes and other health care providers need accountants.
- Retail trade – 5% of accountants. Work for retailers like department stores, grocery stores, car dealerships, etc.
However, accountants have the flexibility to work in almost any industry they choose based on their interests and skills.
Percentage of Accountants by Industry
Industry | Percentage of Accountants |
---|---|
Finance and insurance | 29% |
Professional, scientific, and technical services | 14% |
Management of companies and enterprises | 10% |
Manufacturing | 8% |
Government | 8% |
Health care and social assistance | 7% |
Retail trade | 5% |
Should I Become an Accountant? Evaluating the Pros and Cons
Deciding whether to pursue a career as an accountant comes down to weighing the positive factors against the negative or challenging aspects:
Pros of Being an Accountant
- High earning potential, especially for CPAs and auditors
- Strong job prospects – accounting is a growing, stable career
- Valuable credentials like CPA certification
- Opportunities for leadership roles and career advancement
- Ability to work in many industries and specialties
- Intellectually challenging work with problems to solve
Cons of Being an Accountant
- Long hours may be needed during peak times
- Can be high-pressure due to strict deadlines and standards
- Continuing education requirements to maintain certification
- Possible extensive travel for public accountants/auditors
- Relatively solitary or independent work
- Limited direct interaction with customers or the larger public
Overall, a career as an accountant offers a great deal of stability, earning potential and opportunities for growth. For those with strong math, ethics, attention to detail and analytical abilities, accounting can be a very rewarding profession.
Conclusion
In summary, accountants are business professionals who analyze, record, summarize and report on financial information for individuals and organizations. Though some view accounting as unexciting “number crunching,” accountants play a key role in helping companies and clients make wise business decisions through their financial expertise and insights.
Pursuing a career as an accountant requires significant education and licensing, usually a bachelor’s degree at minimum paired with a Certified Public Accountant certification. However, this investment in qualifications pays off through strong job prospects, excellent salaries, career advancement and intellectual challenges.
Common accounting careers include public accountants, private/corporate accountants, auditors, tax accountants, forensic accountants and management accountants. With in-demand skills and valuable credentials, accountants can work in nearly any industry they choose to pursue their professional passions and earn a stable living.