So, you know all you need to know about potential careers and have your sights set on accounting.
Accounting is a necessary practice for all types of businesses and organizations. Accountants cover a wide range of types of clients and work.
After familiarizing yourself with the industry and learning some of the basic accounting principles, you have a decision to make: do you want your career to be in public or private accounting?
Private vs public accounting
Public accountants comprise mainly of certified public accountants (CPAs) and work for large firms for external clients. Private accountants work internally at specific companies to manage their finances and provide essential guidance on operations.
Exploring private vs public accounting
In a versatile field like accounting, a number of different work opportunities arise for professionals. Below, we examine how the day-to-day and overall responsibilities of public accountants compare to those of private accountants.
Public accountants go through a bit more of a robust training regimen than private accountants. They are trained to know all aspects of, and how to prepare financial statements, such as a balance sheet. A public accountant will need to learn to take a holistic look at a client’s full financial profile when evaluating a company’s accounting systems. Essentially, a public accountant should be fully equipped to find all the evidence they need to determine whether a company is running effectively.
Private accountants have fewer training requirements, as their day-to-day responsibilities are fewer in variety and will typically revolve around specific accounting transactions within a business. Private accountants only need to be trained for the individual responsibilities they own at their companies.
Almost all public accountants will need to fulfill the CPA requirements. This means needing a bachelor’s or associate’s degree, work experience, and to have passed the CPA exam.
Private accountants will not need to fulfill these requirements, although having a CPA license can give a private accountant an advantage when in the job market.
Work hours and deadlines
It’s no secret that public accounting can include long hours, a taxing travel schedule, and tight deadlines. If you are a skilled worker under varying conditions and high-pressure situations, there is a lot that you can contribute to a company through being a public accountant. The height of the public accounting grind comes during “busy season,” which is January-March for auditors and into April for accountants that focus on tax. This season increases work hours long into the night and, at times, weekends. Time management skills are necessary for the long hours during these periods, which are rewarded with a return to standard or sometimes even shorter hours during the summer.
Private accounting also can vary in intensity and work hours. At the end of the quarter, hours begin to pick up and the looming deadline of having financial information prepared can create a stressful period for the end of each of the four quarters in the corporate calendar. However, as far as day-to-day work is concerned, private accounting features a relatively stable schedule for most of the year and no or close to no business travel. In terms of work hours and deadlines, private accounting is the more stable choice compared to public accounting.
Public accountants can come into their position with little accounting experience and try to advance their way through their firms. They typically begin as auditors, and can work towards being audit managers and eventually partners. There is also ample opportunity to specialize, especially in tax. Public accountants can also specialize in areas such as forensic accounting or consulting.
Private accountants typically enter their positions with a bit more experience, sometimes coming from a public accounting firm. A private accountant may not be able to move up the ladder as quickly as an accountant in a public firm, however they are able to do so in private accounting without a CPA license. There are also fewer areas for private accountants to specialize, as they have their hands in all areas of a company’s financial responsibilities.
An important aspect of comparing these two fields of accounting is recognizing that whichever area of accounting you choose, it doesn’t have to be permanent. There are many examples of private accountants obtaining jobs at public firms and pursuing a CPA license. On the other hand, a popular choice for public accountants that may feel a bit worn out by the consistent travel and tight deadlines of public accounting is to find a position as a private accountant that can offer them stability and comfort.
Which is right for you?
After reading through the differences between public and private accounting, you probably have a few thoughts regarding where you’ll like to start out as an accountant. If you have a solid accounting education or training background, or are willing to put in the time to get one, you should be able to thrive in either area of accounting.