Who is an Accountant
An accountant is a professional who is responsible for a wide variety of financial aspects of a business or an individual. These financial aspects vary from keep financial records, to organizing them, analyzing and interpreting them according to the needs of the client. The job of an accountant has however evolved a lot during last few decades. They are no more just number crunching individuals. Accountants nowadays have to be as good with people as they are with numbers.
For many businesses accountants are what drive business decisions by accurate and orderly analysis of finances. With this, it should not be surprise that job prospects in the field of accountancy are one of the fastest-growing ones, across industries. In fact, according to research by the US Bureau of Labor Statistics employment prospects for accountants and auditors is to grow 7% p.a. from 2020 to 2030.
This surely intimates how lucrative accountancy is as a field of study and from job outlook point of view. You must now be wondering what it takes to become an accountant. If so, the following steps highlight how you too can take a step towards becoming an accountant.
Steps to Becoming An Accountant
This is a detailed list of what you should do to get an entry level job as an accountant and progress further.
1. Earning a Bachelors’ Degree
The first step into becoming an accountant is to get a bachelor’s degree from an accredited university. Many states in the US require that the candidates who wish to attain a CPA have a bachelor’s in the science of accountancy. Though ideal, it is mandatory. There are some states that do not place such a requirement. Either way, you will be required to have studied some of the financial and accountancy subjects.
States that do not mandate a bachelor’s in accountancy might still mandate a certain number of credits in its field. It is best if you check the state requirements for the respective state that you wish to appear for the exam in.
2. Decide whether you want to become an account or a CPA
As evident from the first stipulation, there are different requirements for becoming an accountant and a CPA. This is because while all CPAs are accountants, not all accounts are necessarily qualified CPAs. CPA stands for certified public accountant, but we will elaborate on that later on in this article.
However, it is important to note here that CPAs have to fulfil extra rigorous state requirements to attain the practicing license. In fact some employers who value CPA license even offer bonuses to those employees who have a CPA license. Some firm even offer incentives to on-the-job employees to attain CPA license.
3. Pick a Specialty
Once you have decided whether you want to go for a CPA or with a regular accountancy position, the next step is deciding a specialty. There are many sub-segments to accountancy itself, and it is always better to be an accountant skilled in a specific sector. So carefully contemplate your interests and scope of the specialty you are interested in. The best way to decide for yourself is to analyze what type of accounting you can see yourself doing on a daily basis.
4. Gain relevant or some entry level work experience
Though this is not one of the mandatory requirements, most consider it ideal to gain some real world experience. It is advisable that you gain some experience while earning your bachelor’s degree to give yourself an extra edge. Also having some real world experience and knowledge of accounting can help you fair better in your studies.
5. Sit for the CPA examination
If you are one of the individuals who decide on getting the CPA license, then the next step for you is sitting for the examination. But do so you must not only earn your undergraduate degree but also fulfil the relevant state requirements. As mentioned before, look into what the respective state requires of you before you appear for the CPA exam.
6. Apply for the state licensure
Once you have successfully passed the CPA exam, the next step is to apply for the state license. The steps involved in the application process vary from state to state just like the exam eligibility/ requirements. So must check up with the state authorities regarding the same.
7. Apply for a job
Once all is said and done, the last step of becoming an accounting is to actually look for a job. While most you will have to start at the entry level, some may fair a little better than others based on your educational achievements and prior work experience.
As per the US Bureau of Labor Statistics, the average salary (2020) for an accountant is USD 73,560 p.a. and USD 35.37 per hour.
8. Continue developing via education and study
It is always best to continue you study in the field of accountancy so as to keep growing and staying up to date. Some states even mandate for accountants to continue education/ study for them to keep their license and certification. Given the nature of the job, it is critical that you state up to date with the latest reforms and policies etc.
In addition to this, in certain cases earning a certificate in a specific specialization or getting a master’s degree will definitely be beneficial. This not only gives you an edge, but also helps advance your career and bag a higher salary package.
Following the above mentioned steps will ensure you a career in accountancy. Now let’s have a look at the various degrees in accounting.
Various Accountancy Degrees
Though most of the states require you to earn a bachelor’s degree in accounting/ related field to get an entry level job in the field. It is still not the only options for those seeking an entry in this field. The other degree options worth exploring for a career in accounting are:
1. Associate Degree
Available via both online and offline platforms across institutions, this degree provides students with a solid foundation in accounting. It takes about 1-2 years to complete this degree. It covers a wide spectrum of topics like basic accounting principles, taxation fundamentals, personal finance and payroll accounting.
An associate in accounting and accounting technology is a good way to attain an entry-level position in finance and administration. For example- billing clerk, staff bookkeeper, accounts receivable clerk etc.
If you are not sure about becoming an accountant, then getting an associate degree is a good way to test the waters before enrolling for a bachelor’s program. An associate degree can thus be a stepping stone to a bachelor’s degree. It is however important to note that neither all degrees nor all classes transfer credit-for-credit. So do your research before enrolling for the degree.
2. Bachelor’s degree
This degree is usually offered as- Bachelor of Science. It is a 4 year degree with highly specialized programs to prepare students to work in various parts of the accounting industry.
As mentioned earlier a bachelor’s degree in accounting is a prerequisite for CPA in many states. However there are some states that allow students from degrees in related field to appear of license exams. Either way getting a bachelor’s degree is a must, even for those who not wish to become CPAs but accountants.
For those of you who are sure that you want to become an accountant but are not sure as to which state you will work in, getting a bachelor’s in accounting is best. Other advantages of getting a degree in accounting is that it gives the opportunity to make lasting contacts, for example with instructors, professors, and even students. These connections will help you down the line in establishing a stable career in accounting.
3. Master’s Degree
Master of Accounting, MAcc, is ideal degree for students who looking to either become a CPA or aspire to hold any high-level competitive position in big firms. For students who already have an educational background in accounting, acquiring this degree may take only one year.
However, students without prior education in accounting will have to fulfil a certain number of prerequisite courses before beginning the master’s program. These requirements vary from institution to institution, and hence the time for degree completion varies.
A master’s program will subject students to study advance topics with specialization focus. An alternative to MAcc is an MBA in accounting. While MBA accounting programs focus more on business management and leadership courses, the curriculum is mostly similar to a MAcc.
4. Doctoral Degree
This degree is for those individual who wish to either move into research within accounting or enter academia. Acquiring a PhD typically takes anywhere between 4-5 years of full time study. Just like most doctoral degree, there are 3 components- coursework, dissertation research, and examinations.
Skills you will gain if you wish to pursue a PhD are a deeper understanding of all topics, ability to conduct deep research, think from a psychological perspective etc.
5. Chartered Public Accountant (CPA) Certification/ License
The CPA certification is one of the most widely known and sought after licensure. Gaining a CPA requires individuals to undergo extra hours of study and must pass a comprehensive examination. They are specialists who have thorough knowledge of the field of accounting. And are able to file reports with the SEC and are also able to represent clients before the IRS.
As mentioned before, different states have varied prerequisites for letting candidates appear for a CPA exam. Look into the requirements of your state to attain a CPA.
6. Other certifications and credentials
Even though not everyone necessarily needs to have an accounting license/ certification, there are definitely benefits to having one. Besides a CPA, there are many other certifications and credentials that help enhance careers opportunities.
Certified Management Accountant (CMA)
This is a great option for those seeking to enhance both their finance and managerial skills. To get this certification, candidate must have minimum 2yrs of experience in management accounting. And must pass the examination under Institute of Management Accountants.
Chartered Financial Analyst (CFA)
This is a postgraduate certification offered by the CFA Institute. This certification signifies that the holder is a specialist in investment management. Candidates need to have minimum 3 years of experience, be a part of the local CFA chapter and must pass the three levels of the CFA program to become a CFA charter holder.
Chartered Global management Accountant (CGMA)
This professional management accounting designation began in January 2012. Its aim is to promote science of management accounting globally.
Certified Information Systems Auditor (CISA)
An accountant with minimum 5 years of experience in information systems is eligible for this certification exam, offered by ISACA.
Certified Internal Auditor (CIA)
This certification is specifically beneficial for those who wish to work as an auditor. The Institute of Internal Auditors requires candidates to pass a four part test and have minimum 2years experience as internal auditor.
Certified Payroll Professional (CPP)
Enrolled Agent (EA)
This certification focuses on tax law. Accountants who attain this certification are authorized tax practitioners. It is the highest qualification offered by the IRS, but is a lot less intensive that a CPA.
Careers in Accounting
Aspiring for a career in accounting can land you in many surprising places. Gone are the days when accounting was a boring profession. Today the scope of accountancy careers are vast and interesting. Some of the most common career options when considering a career in accountancy are as follows:
Book-keeping, accounting and auditing clerks
This is one of the basic/ entry-level position in the field of accountancy. These individuals produce and keep financial records for employers (organizations) and check them for accuracy. Usually candidates do not necessarily need a bachelor’s degree to get this kind of a job. The median pay for this position (2020) was at USD 42,410.
Accountant/ Corporate Accountant
An individual with a bachelor’s degree or higher is eligible for this position. These are professionals who prepare and examine financial statements for individuals or businesses. They examine client expenses (costs) and prepare balance sheets. They also help plan budgets and file for tax returns. The average salary for accountant is USD 70,500, and might be higher for corporate accountants.
Anyone with a bachelor’s of science in accounting can get an entry level auditor position. Though they will need specializations/ certification to get higher auditor profiles. The average pay for this profile is USD 70,500 and higher for senior profiles. These professionals examine/ analyse and investigate an organizations’ financial operations. In doing so, they assess the financial risk facing the company and prepare financial statements and strategies accordingly.
A candidate needs a bachelor’s degree to become a budget analyst, and some firms may even require specialist certification. These professionals help businesses/ organizations plant their finances for the best. The media pay for this profile (2020) is USD 78,970.
Tax advisor/ consultant
An accountant with specific/ advanced knowledge of and training in tax law, is a tax advisor/ consultant or even a tax accountant. Individuals or organizations usually hire them to minimize tax liability in keeping with the law. The median pay for this profile is approximately around USD 54,440.
A cost accountant/ estimator is an individual who analyses the expenses of a business. This includes all cost types like materials, labor, production, shipping, and other miscellaneous say-to-say expenses. These professionals collect, analyze and present this data with the aim of improving the respective businesses profitability. They also help management leaders make sound and informed decisions. An individual would need a bachelor’s degree to get this profile, for which median pay is USD 66,610.
Personal financial advisor
An individual will need a bachelor’s degree or higher to bag this profile. These are professionals who analyze their client’s financial situation and help design financial strategies to attain individual client goals. These advisors also research investment options and other opportunities to help clients make decisions for a stable financial future. The average salary for them is USD 89,330.
Management accountant/ analysts
A candidate will require a master’s degree or a CPA certification to get into this position. As the name suggests this is a higher profile, and these professionals work closely with higher executives to make sound business decisions. They also analyze and prepare reports for financial performance of the business and recommend best business growth opportunities. The average pay for these professionals is about USD 87,660.
These are professionals that investigate allegations of fraud, bankruptcy and other financial wrongdoings. They work both independently and with the government to testify in court as witness. They have knowledge of advance data analysis techniques which they use to analyse cases and give their best opinion. Individuals can start out in this field with a bachelor’s degree but will need to acquire special certifications to grow to senior positions.
Some additional career options in the field of accountancy include:
- Business Valuation
- Government finance
- Environmental accounting
- Investment accounting
- Staff accountant
- International accounting
It is clear now that the field of accountancy is quite vast and interesting both from point of view of study as well as employment. Even though the exact amount of time it takes an individual to get a degree varies according to personal discussions. In general, the amount of time it takes to earn a bachelor’s of science in accountancy is about four years. After which an individual can either choose to seek employment, or pursue further study, or do both.