There are several types of accounting fields that lead to a stable, recession proof career that has been one of the highest demanded job industries in the United States. Therefore, an accountant’s salary continues to rise each year since companies are looking for skilled accountants to provide accurate financial reporting under federal and state guidelines. In addition, a CPA’s salary is also a highly competitive compensation package because small businesses want to ensure that financial data and taxes are compliant with the IRS. Careers in finance such as financial analysts also work closely with accounting professionals to make sure a company is utilizing its budget efficiently to stay in business. Choosing a career in accounting/finance is a very rewarding career that provides job security and a wealth of knowledge that is an asset to all industries.
Table of Contents
- 1 Best States for Accounting Employment
- 2 What Do Accountants Do?
- 3 Types of Accountants
- 4 Accountant Salary
Best States for Accounting Employment
What Do Accountants Do?
Exactly defining what Accountants do is not an easy task due to the variety of areas of accounting. However having a broad understanding of each type of accounting will help you shape your career path. By seeing examples of each type of accountants, you can see that accountants all share similar skills sets but do different things based on which area the accountant specializes in.
The job duties, prerequisites, and requirements to be an accountant will always vary depending on the accounting field and industry type of an organization. However, most accountants regardless of specialization will have multiple responsibilities. Each duty of an accountant will have a different degree of responsibility as well.
Below is a great description of what it take to become an accountant. This is more of an overview of the daily activities and duties, education, prerequisites, and preferred experience. This generalization will show what is needed to become an accountant. Here are some of the most common questions asked for people interested in pursuing a career as an accountant:
What Does an Accountant Do on a Daily Basis?
An accountant’s duties vary and are determined based on the field accounting the person pursues. In detail, let me explain the basics functions of an accountant. A general accountant can be responsible for preparing accounting information for month to year end closing processes. This may include working with the general ledger, preparation of balance sheets, handling of expense account reconciliations, audit preparation, and helps with journal entry preparation.
How to Become an Accountant
Accountant prerequisites and requirements vary from each state but the basic foundation is a degree in accounting or finance. An associate of science in accounting is also a great start for landing an entry-level accountant position. In addition to education, having prior experience working in accounting & finance is a plus for becoming an accountant. Assistant positions and internships still count as experience for the hiring decision.
Types of Accountants
According to the U.S. Bureau of Labor Statistics in 2014, there is an estimated 1,332,700 working accountant and auditors across the United States. Similar to other workforce industries, accountants can be divided into various fields depending on the area of interest individual workers desire for a future career route. For example, someone may thrive off cost accounting while another person may enjoy working taxes. There are various types of accountants out of the million plus population as stated above. Each type specializes in particular field of accounting and finance. Occasionally, some accountants can specialize in multiple fields at once. In addition, it is also not uncommon for workers in this profession to change fields’ overtime until he or she finds the best fit.
Financial Accountants specialize in the creation of financial reports for an organization. Financial data is the driving force that keeps current and potential investors, senior management, and other external areas notified of an organization’s financial performance. The data produced for external users include financial transactions that are prepared in compliance with General Accepted Accounting Principles or (GAAP). Ultimately, this data is turned into reports that can be by areas such as decision-support.
Accounting Managers focus on the analytic side of finances that are used to make decisions by upper management. In most organizations, each department will have a manager that is responsible for making decisions based on “cost.” Everything that is cost-related can be tied to a targeted goal. This type of accountant provides the financial analysis that managers need to make the necessary adjustments to meet an organization’s overall goals. Opposed to financial accountants, management accountants do not have to adhere to GAAP standards.
Auditing whether financial or internal, focuses on the accuracy of financial reports. These workers are very analytical thinkers and have the ability to discover potential financial errors that can hurt the organization. One of the most important characteristics of an auditor is having the ability to closely examine financial data with an “open-minded” perspective. This is a key element for financial analysis to be in favor of the organization’s well-being opposed to where data originated from. In addition, auditors strongly make sure all financial reports are compliant with GAAP standards to ensure the organization’s financial statements are properly reported.
Accounting Information Systems
Accountants specializing in Accounting Information systems or (AIS) work with the Enterprise Resource Planning Systems (ERP) of an organization. Over the past few years, this area of accounting has grown tremendously due to the increase in technology across organizations. AIS specialist typically have both accounting and information system skills combined. The financial data handled by AIS workers typically is larger quantities of data because of the automation and advanced tools that can be used with technology.
What is an Accountant?
According to the bls.gov, “accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently. The job duties and tasks of an accountant varies upon the area of study. Although all accountants work with financial data, an organization’s purpose in the marketplace can determine the duties that an accountant carries out on a daily basis. Accountants come equipped with a defined set of skills that will support the financial goals of an organization. Therefore, choosing a specific industry with a focus in one of the major accounting areas will give a better perspective of a typical day of an accountant. Lets review the top areas of accounting that workers specialize in:
- Financial Accounting
- Management Accounting
- Accounting Information Systems (AIS)
“Above are great examples of accounting to specialize in”
As mentioned above, the general duties of an accountant vary depending on the accounting field and the purpose of an organization. However, most accountants do share some of the same abilities that include:
- Demonstrated comprehension of accounting and finance
- Demonstrated ability to utilize a personal computer effectively
- Strong verbal and written communication skills
- Detail Oriented
- Ability to work well with others
To show the distinct difference between the common abilities of an accountant, let’s take a look at one of fastest growing areas of accounting. The “accounting information systems specialist” is a person focuses more on the information technology component of accounting. For example, the (AIS) accountant works with the ERP (Enterprise Resource Planning) software that typically integrates other areas of an organization together. The accounting side of the ERP system may include working with accounts payable, accounts receivable & billing, asset management, and the cash/general ledger. This brief description of the accounting information specialist demonstrates “what accountants do,” truly depends on the area of expertise.
Some of highest paid accountants fall into management and senior level accounting. However, higher level accountants come with higher responsibility. An accounting manager oversees financial reporting and how the accounting department functions. This person is responsible for providing financial statements, budget variance analysis, budget preparation tax client assistance, audit client assistance, accounts receivable management, reserve setting, inventory management, and ensures compliance with policies and procedures. As you can see, the accounting manager has numerous responsibilities that well deserved compensation packages. In addition to accounting managers, senior level accountants can also make good salaries. Generally, the senior accountant works right under the accounting manager. This person supports accounting functions, month to year end fiscal year closes, general ledger balance, expense reconciliations, bank account reconciliations, audit preparation, and journal entry preparation.
When recruiters look at applications from potential candidates, having good experience is a big plus. In addition, having a degree in finance or accounting also a per-requisite for most organizations. If you are still in the process of finishing school for accounting or seeking an entry level position, an internship is the perfect start. Networking is a very important part of landing a good job. Getting your foot in the door as an assistant or intern will give you the ability to learn, form relationships, and ultimately get offered a position to start your career.
Today with most companies you will find that the description of an accountant may not disclose salary information. The reason is with most professions the compensation is negotiable and not fixed. Typically there will be a low, mid, and high point for an hourly rate. These hourly rates are based on years of experience and education. Also location and the area of expertise are also factors for determining salaries.
When reviewing the prerequisites and requirements for an accountant, make sure to look for the following facts:
• What does the position require?
• What kind of compensation is offered?
• What are the duties and responsibilities?
“These key factors are imperative to understand prior to accepting a job offer as an accountant”.
Accountants are an essential part for the survival and success of any organization. Accountants make sure that financial reports are delivered to external users that provide insight about the organization’s finances. In addition, these workers ensure that financial data is aligned with the Generally Accepted Accounting Principals (GAAP) and is responsible for information such as account reconciliations, audits, balance sheets, the general ledger, and journal entries that are processed.
If an accountant works with taxes he or she may be responsible for having detailed knowledge of different tax codes and preparation of tax forms such as 990’s, 990 T’s, and 1120’s. On the other hand, a management accountant works closely with senior management by providing more financial analysis to help managers make decisions that are primarily cost driven to meet organizational goals.
An accountant salary depends on factors that include the size of an organization, the geographic area, and the accounting field. For example, an accountant working for a top fortune 500 company can expect to get paid a higher wage compared to an accountant working for a small company in an average city. Additionally, an accountant specializing in management may demand a higher salary than someone that works as a financial accountant that prepares reports.
Accountant Compensation Information from U.S Bureau of Labor Statistics
Good areas that accountants should consider working for are companies in the Fortune 500. Accounting has room for growth in each area and starting with a bigger company at first will open more doors to gain experience which is greatly sought after along with education. The bigger companies in industries such as information technology and oil are always looking for ways to strengthen their overall financial position while remaining compliant to government standards. Therefore, companies in these areas are willing to pay higher wages due to market stability and the potential for higher profits.
How Much do Accountants Make?
According to the Bureau of Labor Statistics, their recent statistics as of 2015 indicate that the average median accountant annual salary was around $67,190 per year or $32.30 per hour. On the lower end, an accountant yearly salary was around $41,400 per year or $19.90 per hour. On the higher end, the highest paid accountants bring in an average of $118,930 per year or $57.18 per hour. Overall, the average pre-tax salary an accountant takes home per month is around $5,599 dollars per month.
An accountant’s compensation is primarily determined by years experience and level of education. In addition, the industry and geographical area also play key roles with the potential amount of dollars earned per year. For instance, working for a top software company makes up one of the highest paying areas but only makes up for a small percentage of accountants. Therefore, an accountant can still make the same salary in a smaller company if the level of expertise and education is sufficient. The range of compensation for accountants also varies depending on which field of accounting the person specializes in. There is good news for fresh graduates of accounting & finance because we are faced with more financial challenges and the need for accountants will continue to grow in the future. In summary, salaries are determined upon a number of factors but this article should give a good idea of what an accountant can expect to make based on the variables that go into calculating overall compensation.
Accountant & Auditor Salaries by State
|State||Employment||Average Hourly Rate||Average Annual Salary|
|District of Columbia||10,860||$44.71||$93,000|