As someone pursuing a career in accounting, one big decision you’ll face is whether you should get into public accounting or private accounting. But what exactly are the differences between the two?
Private accountants are directly employed by a company or business. Because of this, private accountants are also sometimes referred to as corporate accountants. Public accountants basically serve as an independent third party. They often work for accounting firms which may work with many different types of clients. A public accountant can find themselves working with individual people, the government, non-profit organizations, or businesses in a variety of industries.
Beyond the clients involved, there are quite a few other significant differences between public and private accounting. Both types have their advantages, but which one is best for you all comes down to your personality, working style, and career goals.
Accountants are in high demand — period. But whether you go into public or private accounting can make a big difference in how many hours you work and the type of work you do. If you like consistency and routine in your life, private accounting might be best for you. Since private accountants work for one company at a time, their schedules are more consistent. Working with only one company also means private accountants don’t encounter the diverse amount of situations public accountants do.
For public accountants, the goal is to get in as many billable hours as you can. Because of this, they typically work more than the customary 40 hours per week. Public accountants also work with a wide variety of clients handling many different tasks. While this is interesting for some, others think it’s stressful. The fact that public accountants can work with many different clients means they can spend more time commuting and travelling.
Education and Certifications
Regardless of whether you choose to work in public or private accounting, you will need a degree in accounting. If you’re leaning toward public accounting, you will also need to pass the CPA exam. Becoming a CPA isn’t a requirement to work in private accounting, but passing the CPA exam could still benefit your career. Some companies will pay higher salaries to private accountants with a CPA license since it shows they have a high level of knowledge and dedication to the field.
Both types of accountants are both paid well, but public accountants tend to earn more than private accountants. Robert Half says that in 2017, the average salary for entry-level public accounting positions at small to large firms was $50,000-$73,500 On the other hand, entry-level salaries for private accountants typically ranged between $44,250 and $59,500.
Long-Term Career Goals
What do you hope to do with your career in the long run? Public accountants can work their way up to management positions, become partners at accounting firms, or start their own firms. Private accountants can have a similar career trajectory, although some progress to being CFOs. If you’d like to specialize in working in a particular industry, private accounting would give you the best opportunity to do so.
Regardless of which path you choose to start out on, remember you don’t necessarily have to stay there. Many people decide to change paths later in their careers. Some start out in public for the variety of learning experiences it offers, but move into private for a more consistent schedule. Others might decide to switch from private to public for a better salary. It’s all simply a matter of what works best for you.