Every business, no matter how big or small, needs to stay on top of its finances. Profit and loss sheets, or P&Ls, are basic summaries of the money that businesses obtain and spend, but financial records can become much more complex. Even small companies have multifaceted investments and revenue streams. They often also have debts and other considerations, all of which frequently require a financial professional to manage.
Bookkeepers, accountants, and certified public accountants (CPAs) are all involved in the same basic activity: assisting individuals and companies with their finances, helping them stay on track and informed regarding the financial state of their professional or personal investments. Despite some basic similarities, these positions have different functions, and many specific duties set them apart from one another. Accountants and CPAs are especially similar, separated by certification and one key aspect of their work. Continue reading to learn more about CPAs and accountants, what they do, the skills they possess, and how their responsibilities differ.
Accountants and CPAs Defined
All CPAs are accountants, but not all accountants are CPAs. CPAs are accountants who have gone through special training, certification, and licensure to be able to file tax returns with the government and represent their clients in financial matters. Accountants who are not CPAs know how to help businesses examine their financial statements, keep track of their money, manage payments and billing, and handle other financial duties. Without a CPA designation, however, accountants can’t file tax returns or otherwise consult on tax matters in any state. Aspiring CPAs often earn an advanced degree, such as Maryville University’s online Master of Science in Accounting, which prepares them for the complexities of accounting, such as at a Fortune 500 company, though many organizations can benefit from a CPA’s expertise.
Accountant Essential Skills
Accountants must have several skills to succeed in any business environment. After graduating with a bachelor’s degree, they need to make sure they’re equipped to handle the following:
- Management of financial data: Accountants must be comfortable working with large amounts of financial data in spreadsheets, charts, and other forms. They also must possess computer skills to maintain and utilize digital databases via different software programs.
- Advice and analysis: Accountants often need to provide financial advice to their bosses or management teams. Especially in smaller companies that don’t employ many financial professionals, CEOs might call on accountants to explain a business’s financial state in detail and advise on different courses of action.
- Reporting compliance: Accountants must operate within certain parameters, making sure they are compliant with regulations when it comes to reporting income, expenses, and other financial matters. In the event of an audit, accountants need to be able to answer questions or clear up any discrepancies.
- Finance report preparation: Accounts prepare financial reports for submission on an annual or quarterly basis. They often include investors or board members in these conversations, updating them on the company’s inner workings. Accountants frequently learn specialized software that enables them to prepare these reports.
CPA Essential Skills
As the most highly trained and knowledgeable of all accountants, CPAs develop a skill set that builds on accounting skills and expands their opportunities. No matter where they work, CPAs must possess abilities in the following areas:
- Accounting and business concepts: CPAs need to see the big picture when it comes to their businesses or clients, including their goals and financial plans. In turn, they better understand their role in the company and can manage their money in a way that makes sense for each client.
- Research, analytics, and problem-solving: CPAs must be ready to do hours of research, diving into files and documents to solve problems without clearly defined steps. This often requires creativity and problem-solving abilities.
- Communication: CPAs must be able to communicate with clients and management to better understand their projects and problems. They also must be able to explain potential issues.
- Project management: CPAs often work in teams or lead groups of accountants. They are able to delegate responsibilities and help others navigate problems.
- Ethical standards: CPAs must maintain high ethical standards, especially since some violations of federal law can come with prison time. CPAs ensure their clients adhere to legal and ethical standards and report those who refuse to do so.
Job Market for Accountants and CPAs
According to the U.S. Bureau of Labor Statistics, there were 1.4 million accountants and auditors working in the United States as of May 2018. The BLS reported the median annual salary for those professionals was $70,500 per year, with the bottom 10% earning approximately $43,650 and the top 10% earning as much as $122,840 each year. Factors that may affect an accountant’s salary include that person’s education, experience, and geographic location. The industry that paid the highest median annual salary was finance and insurance ($74,690), followed by management of companies and enterprises ($73,180); accounting, tax preparation, bookkeeping, and payroll services ($70,640); and the government ($68,420).
The BLS expects the job market for accountants and auditors to grow by 6% between 2018 and 2028, slightly faster than the overall growth rate for all jobs (5%). That growth equates to 90,700 new jobs in the next 10 years. Of that number, about 8,900 will be in management, scientific, and technical services, marking a 21.5% increase in that industry. Another 7,700 will be in healthcare and social assistance, a 14.3% increase.
How an MS in Accounting Can Help
Accountants and bookkeepers who want to earn their CPA certification can benefit from a graduate degree program that specifically prepares them for the CPA exam with courses on advanced accounting regulation, advanced financial accounting and reporting, and more. Armed with such a degree, accountants and CPAs are able to navigate all sorts of financial situations that might arise in a variety of industries and in businesses. Explore how Maryville University’s online Master of Science in Accounting, featuring Becker CPA exam preparation courses, can help you advance your career.
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