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One of the great things about choosing accounting as a career field is the number of opportunities available to those with accounting skills.
Every company in the world needs some level of accounting help, as do many individuals.
There are even opportunities outside of the main bubble that people think of as “accounting” which I will discuss in another post. Here I’m going to talk about the different positions accountants in Public Accounting. Then in the next post I’ll talk about the positions available within companies (often referred to as “Private Accounting” or “industry”).
Private vs. Public Accounting
In general, accountants fall into one of two groups: they either work in-house for a company or work in public accounting.
Working in public accounting usually means the person work for an accounting firm that serves a client base that might include businesses, individuals, and government entities. An independent bookkeeper could be considered to be in “public accounting” because they’re offering accounting services to the public. Usually these firms offer tax, audit, outsourced accounting/bookkeeping, or other consulting services. They are trusted third-party advisors of their clients.
“Private” or “industry” accountants work for one specific company.
The roles that people serve in each group varies quite a bit, but there is also some overlap. This article will focus on Public Accounting.
Depending on the size of a public accounting firm, these positions might overlap or not even exist. Public accounting firms are usually structured as a hierarchy and use an apprenticeship model to develop their staff. So these positions tend to be the same whether the firm offers audit, tax, or other consulting services.
Not every firm has these, but a firm that offers outsourced accounting or bookkeeping services will often employ bookkeepers. This person could also have the title of associate or staff accountant. They may or may not have formal accounting education like an accounting degree.
This is a great position for someone starting out in accounting because it really lets you get some hardcore accounting skills while being mentored by a CPA if you’re at a CPA firm. It’s also a great opportunity to develop different communication skills because you’ll probably be communicating with a variety of clients as well as your employer.
And then of course there is the independent bookkeeper who is running the show themselves, which is still considered public accounting. Being an independent bookkeeper is one of the biggest opportunities right now for people who are looking to start a business they can run from home without too much financial investment.
Staff Accountant or Associate
Most associates at accounting firms are working on tax or audit work for clients. They will usually have an accounting degree and may or may not have their CPA license.
A bookkeeper and an associate could be filling the same roles if the associate provides client accounting services, but often this is more of a tax or audit role. In college, accounting students are usually steered to choosing either “tax or audit.” When I was in school, everyone was always asking each other “tax or audit? Tax or audit?” It’s kind of funny, especially because there are so many other opportunities and paths out there! More on this in a later post.
In the associate role, an accountant will be handling most of the data processing. For tax clients, this means entering data into the tax software, and for audit clients it means aggregating data from various client documents and entering it into audit software to be analyzed.
At a small firm, there might not be managers, and the associates may just report to partners. Medium-sized firms will distinguish between Associates, Managers, and Partners, and the largest firms will add a couple of other roles in the middle such as Senior Associate or Senior Manager.
A manager probably has the most context on the different aspects of an engagement. They are the main day-to-day point person working on a project and oversee one or more associates. While a partner is responsible for keeping tabs on all of his or her client relationships at once, the manager is usually working on fewer engagements and therefore maintains a deeper knowledge of what’s going on. It’s up to the manager to keep the partner updated on the status of the work and any important developments.
The partner at an accounting firm is one of the owners and has ultimate responsibility for their client relationships. Sometimes people who have the normal duties of a partner but are not owners or licensed CPAs will be referred to as a Principal or Director. If the firm is organized and registered as a Certified Public Accounting firm, the partners who own the firm will be licensed CPAs.
Partners need to generate business for the firm by bringing in new clients or offering additional services to existing clients. They are also the people who review and give the final sign-off on a client’s work, especially an audit or tax return. In a smaller firm they might be doing a lot of the heavy lifting themselves, but in larger firms that is delegated to teams of managers and associates.
So, usually the way it goes is a fresh accounting grad will start as an associate, and as they gain experience, they will move into a senior associate or manager position. Here they are given more responsibility over the engagement and develop leadership skills while overseeing and reviewing the work of associates. Once they are deemed to have enough experience and skill — and can find and manage client relationships and make money for the firm — they may be offered the chance to buy into the firm as a partner.