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Types Of Accounting Jobs
When you think of an accountant, a generic image may pop into your head of someone surrounded by paperwork, ledgers, spreadsheets, calculators, and a variety of other things that we associate with this number-centric career.
But truth be told, not all accountants work in the same sort of generic environment that we expect or which we assume they work in.
The field of accounting has a number of subfields that are equally important in the successful operation of a business or organization. The types of accounting jobs that exist are forensic accounting, tax accounting, bookkeeping, auditing, and investment accounting, to name a few.
In all these jobs that exist, the common factor is innate and acquired skills that an individual is required to have to successfully fulfill their duties. They are required, above all, to have honesty and integrity as the primary role of an accountant is to closely assess the flow of money in an organization.
Additionally, they are required to have a keen sense of detail, be extremely good with numbers, and be able to work in a variety of different environments, which could often be extremely stressful.
Perhaps these qualities describe you and you are hoping to pursue a career in accounting. Well, read on to find out what your options are and how you would go about pursuing these roles within the field of accounting.
What Is Accounting?
Before we delve into the different types of accounting that exist, let us look at what exactly accounting is.
Accounting is quite straightforward in that it is the act of dealing with financial transactions. These transactions can involve a sale or purchase of a product or service, can involve a direct exchange of cash, or it can even involve an exchange of assets that hold a monetary value.
But accountancy is not just carried out in businesses and organizations, but also for an individual's personal finances. We all know the importance of finances. Without it, none can survive in this world. So, in a world where income and expenses need to closely be monitored because survival is dependent on them, we need people who are meticulous at recording these finances.
In businesses, every transaction counts. It is therefore of utmost importance to have someone dedicated to assessing each and every transaction and making sure that all figures are accurate.
Why Are Accountants Needed?
Accountants play a valuable role, not just in monitoring every transaction and making sure that companies don't run at a loss, but they are also there to ensure compliance, compile, interpret, and translate financial data to all stakeholders, and provide sound financial advice to the organizations thus ensuring profitability for the future.
But before we look at the value of accountants in companies and organizations of different sizes, let us first look at the value of an accountant to an individual or a small business owner.
We know the importance and the value of money in a large corporation, but as important as it is to a large company, it is just as important for an individual. From doing your personal taxes to monitoring your own budget and expenses, finances are important to the individual as they are to a business.
If a person is unable to handle, manage, or monitor their own finances, they may employ the services of an accountant to assist them in managing their finances. This is especially true for people who are working full-time jobs and who may have side hustles, and finding the time to manage their finances, no matter how important it is, is just not feasible.
This becomes even more complicated when an individual owns a small business as well. It is at this point where an accountant will offer their expertise in business and personal tax and will allow the individual the opportunity to separate business assets from personal assets. Accountants will also provide individuals with advice on investment opportunities.
Now, within larger businesses is where the value of accountants is more obviously seen. They help large corporations and organizations keep track of income and expenditure which can comprise multiple transactions within a day. The accountants are responsible for monitoring each transaction over a month and compiling and assessing the data for accuracy.
They are also responsible for making sure that businesses adhere to and comply with state and federal laws, which include but are not limited to taxes and other important aspects that are business related. Through the collected and collated data, accountants are able to present information to all of the members within a company which will impact investment and business decisions.
Accountants can therefore be employed for a company where their sole focus will be the finances of the company, or they can work in an accounting firm where their services are offered to companies, and they work with more than one organization at a time.
Developments In The Field of Accounting
The thing about numbers is that they are pretty standard. While there may be many ways to assess and interpret numerical data, there will always be right and wrong answers when adding and subtracting numbers. This means that accounting in itself doesn't have much variation.
However, this does not mean that there are no prospects for developments within the field of accounting. While the methodology and the way accounting practices are conducted may remain consistent, the new developments in the field have been most prominently seen in technological trends and digital advancements.
The most notable trends that have emerged within accounting as of late have been automated accounting processes, cloud-based processes, data analysis and forecasting tools that have been developed, digital software accounting solutions, and an increase in AI prominence in the field of accounting.
With the development of these digital tools and the ease that they create, there has also been a development in digital security aspects to safeguard the data that these programs deal with, which is extremely sensitive financial data.
Now that you have some background on accounting and the role that accountants play, let us look at the different types of accounting jobs that exist and which may be the best fit for you.
Tax accountants play a unique role in the accounting process. While they may not be a business accountant who is employed by a company or a personal accountant, they often analyze and assess the information compiled by these accountants to ensure compliance with statutory and federal law.
Tax accountants can work on both sides of the coin: either with companies or individuals to ensure that their taxes and their tax returns meet requirements, or they can work with the government and the IRS to ensure that people have correctly completed their submitted returns.
While most people can submit their tax returns without much help, others who have extremely diverse financial and investment portfolios, and businesses that operate across countries will need the assistance of a tax accountant.
According to the U.S. Bureau of Labor Statistics (BLS), tax preparers, which exclude accountants and auditors, earn an average annual salary of $51,080.
To be a tax accountant, you would need to have a bachelor's or a master's degree in accounting, and you would need to be a certified public accountant.
Forensic accountants need to have a knack for investigation. They need to be able to uncover and compile information that can be presented in court if need be. Forensic accountants play the role of investigating anything that doesn't look quite right or smells a bit fishy in the financial statements of individuals, small businesses, or large corporations.
They investigate fraud which can encompass a wide array of misdemeanors, from tax fraud to misleading investors and stakeholders. They are basically detectives and need to have a keen understanding, not just of accounting processes, but of the law as well.
From money laundering to tax evasion, forensic accountants see it all.
The BLS states that accountants and auditors earn a median annual salary of $77,250 and to practice as a forensic psychologist, you would need to be a CPA, as well as have an appropriate degree in accounting, with coursework in criminal justice or forensic sciences.
Bookkeepers play an important role in that they are responsible for recording all the financial transactions that take place within an organization. They are responsible for all the financial accounts, they record all the monies that come in or go out of the business, and they are responsible for recording debits and credits into ledgers.
They produce the financial statements and any other financial reports that are needed by a company. They present the financials of a company or an individual to the accountants who compile these details into data that can be interpreted by stakeholders in the company.
According to the BLS, bookkeepers, accountants, and auditing clerks earn a median annual salary of $45,560, and while they may require some post-secondary or college qualification, most of the training they will acquire comes from on-the-job training.
Once accountants and bookkeepers have compiled and recorded all the financial data of an organization, an auditor, who has eagle eyes and a knack for determining accuracy will come in to assess the books and ledgers of the organization.
They will be checking for accuracy, they will check the current accounting systems and practices that are in place, they will organize and maintain the financial records, and they will provide advice and recommendations that a company could use to improve financial processes.
Most auditors are hired from external auditing firms to maintain objectivity when assessing the books of a company.
As an individual, you may know how hard it is to create and stick to a budget. Now imagine how difficult it must be to create and stick to a budget for a company that is so large, it is not bound by country borders. That in itself seems like an overwhelming task, which is why companies hire the services of budget analysts that help them devise and stick to budgets.
It is not as simple as allocating finances to different divisions, but it includes checking the current income and the projected income of a company and allocating the appropriate funds to different divisions within the company.
According to the BLS, budget analysts earn a median annual salary of $79,940 and require a bachelor's degree to practice in this role.
A chief financial officer (CFO) is the highest corporate role that is responsible for overseeing and managing all financial aspects of an organization. As a CFO you are in charge of all elements of financial record keeping.
From cash flow to budgets and stakeholder relations, you are responsible for managing and working with bookkeepers, accountants, and auditors in the company. There is a heavy weight on the shoulders of CFOs as they need to maintain the finances, and ultimately the financial successes, of a company.
According to the BLS, top executives which include CFOs earn a median annual salary of $98,980 and financial managers earn a median annual salary of $131,710. Individuals in these roles are required to have a bachelor's degree at the very least, in the appropriate field. This means that CFOs would be required to have a bachelor's degree in financial management, accounting, or in a related field, and they are required to have at least five years of direct experience.
When you think of an accountant and all the roles and duties that they are required to fulfill, you may be imagining the role of a certified public accountant (CPA). CPAs are accountants who are experts in financial analysis, taxes, and financial record keeping and interpretation.
They serve as financial advisors, and they oversee all accounting processes within a company or organization.
CPAs are licensed by their state's Board of Accountants.
Accounts Payable And Accounts Receivable
Those who are in charge of accounts payable are accounting clerks who oversee and ensure that all outgoing payments are made on time and that they are accurate. They make sure the company employees, creditors, and suppliers are paid on time. They are also in charge of keeping accurate and detailed records of all payments and they require focus to make sure that the company doesn't lose money unnecessarily.
Accounts receivable specialists are clerks who process, track, and take a note of all outstanding bills, receive all monetary collections, and follow up with debtors and customers to ensure that payment is received on time. They record all debtors and outstanding amounts, and they are responsible for calculating and recording accumulated interest.
Working in finance and investments, investment accountants usually work in brokerages and asset management firms to familiarize themselves with profitable investment opportunities that include but are not limited to, property investments, stocks and bonds, currencies, minerals and metals, vehicles, businesses, organizations, and even cryptocurrencies.
It is the role of investment accountants to ensure that their clients adhere to state and federal laws and that their clients remain tax compliant when it comes to submitting tax returns when they have active investments.
Do I Need To Choose An Area Of Focus In Accounting?
Given the multitude of roles you could fulfill in the field of accounting, it is important to choose a field that you would prefer to focus on. This will also influence the type of coursework you will take during your undergraduate and graduate degree programs.
For example, if you are hoping to pursue a career as a forensic accountant, you would need to have an understanding not only of accounting but also of criminal justice. If you are hoping to become an investment accountant, you would need to be familiar with stock markets as well as accounting practices related to these stock markets.
Is Accounting Stressful?
In short, it can be assumed that every role and career that an individual pursues is stressful to some extent. With a high level of responsibility, being an accountant is quite a stressful job.
If you have an eye for detail, or if you are passionate and good at working with numbers, and if you are hoping to add valuable insight into a company, being an accountant may be the best fit for you. If so, you can take comfort in knowing that there is a wide variety of career options within the field from which you can choose.
There is no doubt that you will find the perfect fit for yourself.
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