The accountant career path starts by making one, not-so-easy, choice: public accounting or private accounting? This decision involves considerations about personality traits, long-term goals, salary aspirations, work environments and job outlooks.
First, here are the basics. If you want to work for an individual company in a specific industry, you should go into corporate — also called private or management — accounting. But if you'd rather work for a company that provides accounting services to others and gain experience working with a variety of businesses, then public accounting is the right route for you.
The demand is great for both types of accounting, with salaries on the rise in 2017. 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. 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. Tax season is the busiest time of the year for public accountants who handle personal income taxes. Other areas of public accounting are auditing, forensic accounting and advisory services.
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.
Career advancement — to partner or CFO
The career path for a public accountant is fairly straightforward. You typically begin in an entry-level 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 career ladder in private accounting. Advancing to a role as CFO can be even more challenging than becoming a partner in a CPA firm.
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 Robert Half's latest Salary Guide for Finance & Accounting. In private accounting, the starting salary for entry-level general accountants ranges from $41,750 to $51,250 in 2017, depending on the size of the company. Public accountants can expect entry-level salaries ranging from $44,750 to $58,750 in small to large companies in 2017.
Depending on company revenues, CFOs in private accounting can expect a salary range of $142,750 all the way to $312,000 in 2017, an increase of 3.0 per cent from the year before. Salaries for managers at public accounting firms range from $95,750 to $151,750, an increase of 3.2 per cent from 2016.
Education, designations and qualifications
In terms of education, you should earn your bachelor's degree in accounting, finance or business to work in public or private accounting. Public accountants must also obtain a Chartered Professional Accountant designation. The Canadian CPA certification program consists of education, a period of meeting relevant experience requirements, and the Common Final Examination (CFE). This designation will forever pay dividends in terms of promotions and opening doors for new opportunities. Once you get the CPA, do not ever let it go inactive!
While private accountants are not required to hold financial designations, there are several, including the Canadian CPA, that can boost your salary potential and show your commitment to the standards and ethics required by your provincial board of accountancy. Non-designated accountants may face restrictions in their practice like the inability to sign off on audits. A professional accounting designation can improve their employment chances.
More advice for newbies
Many new graduates choose to begin their careers in public accounting. The experience builds 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, our recommendation is to find a company that is large enough to provide a fairly constant learning challenge and varied responsibilities.
Either way, accountants can enjoy long and successful careers, whether they choose a career path in public accounting or private accounting.