How To Become An Accountant ~ Step by Step
There are no surefire steps about how to become an Accountant, however there are general guidelines that one should reasonably take before embarking on a journey to becoming an accountant.
- Step 1: Understand what an accountant is, and what the different types of accountants are
- Step 2: Talk to a few accountants for advice and tips on breaking into the field
- Step 3: Understand potential education and training requirements
- Step 4: Decide if you would like to pursue additional certifications such as becoming a CPA or CFE
- Step 5: Make sure your personality and skill aptitude is a good fit
- Step 6: Understand the job market and what you need to do to navigate it
Step 1: What Is An Accountant? What Does an Accountant Do?
An Accountant is a person who analyzes and prepares financial reports that record a company's financial activities. They compute taxes, develop record keeping systems and report about the financial standings of an organization. They process and examine information using various computer programs. Accountants also inspect financial statements to ensure they comply with laws and regulations.
They examine account books for efficiency, this may include analyzing budgets and comparing the budget to the actual costs. In doing this, they may develop ways to reduce costs and increase revenues.
There are many different types of accountants including:
- Auditor: Accountants who work for a larger corporation to ensure all the records and reports are accurate.They analyze a companies financial operations and assess risk.
- Staff Accountant: Also work for a corporation or company managing accounts receivable and payable, process payroll and other day to day operations.
- Tax accountants: Specialize in the legal aspect of tax preparation. As opposed to a CPA, a tax accountant may be certified as an Enrolled Agent (EA). An EA is the only professional recognized by the government to represent individuals if they have an issue with the IRS.
- Forensic accountants: Investigate financial crimes such as embezzlement, securities fraud and bankruptcies
- Public accountants: An accountant who typically works for themselves or an accounting firm and gives advice about financial planning and tax preparation. In order to prepare taxes the individual must be a Certified Public Accountant (CPA).
Which type of accountant do you want to become?!
Step 2: Talk to a few accountants for advice on breaking into the field
We asked the Head of Accounting of USA at Xero, Amy Vetter what were some difficulties and hurdles involved with breaking into the field of accounting. In her own words she expressed that becoming an accountant means becoming an accelerator of change. What does this mean for you? Read on to hear more great insights from Amy.
Today's generation of young accountants have the world at their fingertips...quite literally. Their ability to leverage technology to its fullest extent means less time spent crunching numbers and more time available for what matters: helping clients understand and be proactive with their financial information in real time. It's a rewarding opportunity to help small businesses thrive. Becoming an accountant means becoming an accelerator of change. It takes hard work and dedication, but coupled with the right tech tools and resources, you can make a real difference in the life of your client. With you as their partner, clients can get out from the business of doing business to focus on their true passion.
Click To Tweet!
- Amy Vetter, Global Vice President and Head of Accounting of USA,@ Xero
Step 3: Accountant Education Requirements & Accounting Degrees
Most accountant and auditor positions require at least a bachelor’s degree in accounting or a related field. And some employers may even prefer to hire applicants who have a master’s degree, either in accounting or in business administration with a concentration in accounting.[ii] Accounting bachelor’s degrees typically help students develop the foundations they need to shine in this field. According to ONET, regarding the level of education that may be required:
- 79% Indicated a Bachelors Degree is required
- 5% Indicated an Associates Degree is required
- 5% Indicated a Masters Degree is required
What Will You Learn With An Accounting Degree?
Associates Degree in Accounting
Accounting degrees online at the Associates level are offered in many different varieties. You might see an Associates in Accounting, A.A.S. in Accounting (Associate of Applied Science in Accounting), Associate of Applied Science Degree in Business – Concentration in Accounting Administration, Associates of Science and Accounting, or an Associate of Science – Accounting Specialist.
Classes in Associates degree programs may cover some or all of the following subjects.
- Principles and theories of accounting
- Analyzing and interpreting numbers
- Create financial reports and schedules
- Communicate and network in the business world
- Use models, data, and metrics to make decisions
- Basics of government regulations and taxes
- Operate accounting software and other technological tools
Those who have earned an Associates Degree may qualify for junior accounting positions. They may then advance to accounting positions by demonstrating their on-the job know-how.
Bachelors Degree in Accounting
Online accounting degrees at the bachelors level may be billed as a Bachelors Bachelor of Science in Accounting (BS in Accounting), BA/Accounting (Bachelor of Arts in Accounting), Public Accounting Bachelor’s, or a Bachelor of Business Administration in Accounting, to name a few possible program titles.
Coursework may include the following.
- Analytical, technical, and conceptual fundamentals of Accounting
- Fundamental accounting principles and procedures
- Technology tools used in Accounting
- Analysis of complex accounting problems
- How accounting influences business decisions
Most people in accountant or auditor roles need to have at least a bachelors degree in Accounting or a related field.
Masters Degree in Accounting
Online accounting degree programs for Masters students may have names such as a Masters MS in Accounting, Master of Accounting, Master of Accountancy (MAcc), or an MBA Accounting.
The MAcc is generally designed for working accounting professionals. The American Institute of CPAs calls the MAcc the most dominant degree for accountants at the graduate level. Masters in Accounting programs train students to (hopefully!) pass the CPA and CMA exams.
Classes may focus on topics such as:
- Business Management Theory
- Principles of Advanced Accounting
- Financial Reporting
- Management Control and Auditing
- Regulatory Policy
- Ethics of Accounting
Some employers may prefer to hire employees who have degrees in accounting or business administration with a concentration in accounting.
Doctorate Degree in Accounting
Looking to earn an accountant degree online at the PhD level? You may see programs offering a Doctorate of Business Administration (DBA) – Advanced Accounting, or a DBA in Advanced Accounting.
These advanced classes might include topics such as:
- How accounting is related to overall business strategic practices and performance
- Analyze financial statements and fiscal spending
- Study fiscal practices: budgeting, profit analysis, cost management and performance assessment
- Principles of Taxation
- Global accounting
Step 4: Accounting Certifications
Do I need to be certified to become an accountant?
No, certification is not a requirement, however it does improve job prospects. Many accountants do decide to pursue a license as a certified public accountant. CPAs generally have a higher earning potential than accountants.[ii]
In addition to improving job prospects and increasing earning potential, the CPA certification is considered the most prestigious and most versatile. You will often hear it referenced as the “gold-standard” qualification in the accounting profession. Achieving CPA certification immensely opens up opportunities in other fields, sometimes even on an international level. Other certifications in the accounting realm can also be extremely valuable as one chooses their particular focus within the broad field of accounting. Stock up on credentials. The return will be immeasurable.
Click To Tweet!
- Thomas Rogowski - Senior Business Development Director at Roger CPA Review
What is the difference between an Accountant and CPA? Are there additional training requirements to become a CPA?
CPAs are able to review financial statements and conduct audits, while accountants are not. According to the Bureau of Labor Statistics, all accountants who file reports with the Securities and Exchange Commission (SEC) are required to be Certified Public Accountants (CPAs). In order to become a CPA you must first pass a national exam and meet other state requirements. For example, almost all states require CPA candidates to complete 150 semester hours of college coursework to be certified, which is 30 hours more than the usual 4-year bachelor’s degree.[ii]
Are there additional accounting certifications?
While a CPA may be one of the more commonly known accounting certifications, there are several other options to consider including:
- Certified Management Account (CMA): Offered by the Institute of Management Accountants. This certification among other things, indicates mastery of financial planning and professional ethics.
- Certified Fraud Examiner (CFE): Offered by the Association of Certified Fraud Examiners. This certification an individual understands complex information about financial transactions and forensic methods.
- Enrolled Agent (EA): This is not a certification but rather a status granted by the US Department of Treasury. Gaining this status involves an extensive exam on the Internal Revenue Code (or specific work experience with the IRS) as well as a background check.
- Certified Internal Auditor (CIA): Offered by the Institute of Internal Auditors. A certification in this area designates familiar practice with internal auditing as well as risk management.
Step 5: What Skill Do You Need to Become an Accountant?
As reported by O*NET, these traits are ranked as either extremely or very important to the day to day life of an Accountant[i]
Other basic and important skills for an accountant would include:
- Ability to correctly solve mathematical problems
- Able to quickly do basic math such as addition and multiplication
- Quickly able to process large amounts of information to make critical decisions
Do accountants need to be tech savvy?
An accountant may not need to be tech savvy per se, but working with computers is an very important component of being an accountant. At the very least, there are software skills that an individual will need to know or learn. Some software might be proprietary to an employer. However, some common accounting software includes ATX Total Accounting Office, Intuit QuickBooks, Sage cPAClient Checkbook, and Summit Software Summit Biofuels Accounting. Accountants also use a variety of tax preparation, database reporting and document management software including ATX Total Tax Office, ADP Super Report Writer, and Accutract to name a few.
Step 6: Accounting Salary Potential & Job Outlook
What does an accountant earn?
According to the BLS, the 2015 median annual wage for an Accountant is $67,190! The BLS also tells us that the lowest 10th percentile makes an average of $41,400 and the highest 90th percentile makes $118,930.[iii]
Top States with the Highest Salary Averages[iv]
|Top States for Salary||Lowest 10th% Salary||Highest 90th% Salary|
|District of Columbia||$49,980||$134,640|
What are the job prospects for an accountant? How many account firms are there in the US?
According to the US Census Bureau in 2006 there were 106,636 accounting firms operating in the US employing a whopping 1,356,770 people. Surprisingly, small business reign supreme in this space as the largest segment of accounting firms employed up to only 4 employees - this accounted for 74,622 of the total firms. Though the greater number of firms had less than 4 employees, the largest number of people, 686,546, worked for firms that employed 500 or more employees.
Are accounting jobs expected to grow?
Yes! Accounting positions are expected to grow faster than average (as compared to all other occupations) from 2014 to 2024 at 11%. Over the course of 10 years the total number of accounting jobs is expected to grow to 1,475,100. That is an increase of 142,400 positions. Of course it is not realistic to expect that each of the next 10 years will produce an equal amount of jobs, but if we were to assume that for a moment, that is an average of 14,240 jobs each year. [v] Where specifically might these jobs tend to pop up? Well, the areas with the highest employment level are (in order): [iii]
- New York-Jersey City-White Plains, NY-NJ Metropolitan Division
- Los Angeles-Long Beach-Glendale, CA Metropolitan Division
- Houston-The Woodlands-Sugar Land, TX
- Chicago-Naperville-Arlington Heights, IL Metropolitan Division
- Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Division
- Dallas-Plano-Irving, TX Metropolitan Division
- Atlanta-Sandy Springs-Roswell, GA
- Boston-Cambridge-Newton, MA NECTA Division
- Denver-Aurora-Lakewood, CO
- Minneapolis-St. Paul-Bloomington, MN-WI
Understand enough about how to become an accountant? What about how to find a job as an accountant?
There are several steps one might take to find a job as an accountant.
- Step 1: Work your contacts. If you are not on LinkedIn, create a profile immediately and reach out to connect with everyone you know
- Step 2: Understand the job market. What keywords and titles can you search for related to becoming an Accountant? When on the search boards you may want to include these types of job titles: Accountant, Accounting Manager, Accounting Officer, Accounting Supervisor, Business Analyst, Certified Public Accountant (CPA), Cost Accountant, Financial Reporting Accountant, General Accountant, Staff Accountant.
- Step 3: When you find a job you are interested in, go to LinkedIn to figure out who you might know a the prospective company
Fun Facts! Celebrities that studied Accounting
You hung in there and read all our tips on how to become an accountant, now it is time for some fun facts! AccountingToday.com came up with a list of 10 celebrity's, who either have accounting degrees or studied accounting before becoming famous, here's a sampling of that list:
- Mick Jagger: reportedly studied accounting and finance at the London School of Economics for a year before leaving to fully commit to his musical side project
- Bob Newhart: after his service in the Korean War and a brief stint in law school, comedy legend Bob Newhart got a job as an accountant for manufacturer United States Gypsum.
- John Grisham:Author of best-selling book "The Firm" has a BS degree in accounting from Mississippi State University and considered becoming a tax lawyer, before committing to his other pursuits
[i] O*NET | [ii] bls.gov | [iii] bls.gov/oes | [iv] BLS Salary Data | [v] bls.gov/ooh Job information sourced from O*NET