Does Accounting Pay Well? A Detailed Look At Accountant Salaries And Career Prospects
If you’re considering a career in accounting, one of the first questions you probably have is ‘does accounting pay well?’. With salaries averaging $73,560 per year according to the Bureau of Labor Statistics, accounting is generally considered a stable, lucrative career path.
If you’re short on time, here’s a quick answer to your question: Accounting does tend to pay well, especially for CPAs and accountants with specialized skills and certifications. The average salary for accountants and auditors is above the national average, and demand for accounting skills is growing.
In this comprehensive guide, we’ll take an in-depth look at accountant salaries, job growth, work environments, and steps you can take to maximize your earning potential as an accountant.
Average Accountant Salaries
When considering a career in accounting, one of the first questions that comes to mind is how much accountants actually get paid. While salaries can vary depending on factors such as experience, location, and industry, the field of accounting generally offers favorable compensation.
Let’s take a closer look at the average accountant salaries and how they can differ based on various factors.
Entry-Level Salaries
For those just starting their accounting careers, entry-level salaries can provide a solid foundation. According to the Bureau of Labor Statistics (BLS), the median annual wage for accountants and auditors was $71,550 as of May 2020.
However, it’s important to note that this figure can vary depending on factors such as education, certifications, and the specific role within the accounting field.
Salaries by Certification
Obtaining professional certifications in accounting can significantly impact an accountant’s earning potential. For example, Certified Public Accountants (CPAs) tend to earn higher salaries compared to their non-certified counterparts.
According to the BLS, accountants with a CPA designation typically earn around 10% more than those without it. Other certifications such as Certified Management Accountant (CMA) and Certified Internal Auditor (CIA) can also contribute to higher salaries and increased job opportunities.
Salaries by Industry
The industry in which an accountant works can also influence their salary. Some industries, such as finance and insurance, tend to offer higher salaries compared to others. The BLS reports that accountants working in the finance and insurance industry earned a median annual wage of $81,890 as of May 2020.
On the other hand, those working in government agencies or educational services may earn slightly lower salaries. It’s essential for accountants to consider the industry they wish to work in when assessing potential salary prospects.
Salaries by State
Geographic location is another significant factor that can impact accountant salaries. Certain states and regions tend to offer higher wages due to factors such as the cost of living and demand for accounting professionals.
For example, accountants working in states like California, New York, and Massachusetts often earn higher salaries compared to those in other parts of the country. However, it’s also important to consider the cost of living in these areas, as higher salaries may be offset by higher expenses.
Job Outlook and Growth for Accountants
Accounting is a field that offers promising career prospects for individuals with a strong aptitude for numbers and a keen eye for detail. With the increasing complexity of financial regulations and the growing need for accurate financial reporting, the demand for accountants is expected to remain strong in the coming years.
Let’s take a detailed look at the job outlook and growth for accountants.
Accounting Job Growth Nationwide
According to the Bureau of Labor Statistics (BLS), the employment of accountants and auditors is projected to grow 10 percent from 2016 to 2026, faster than the average for all occupations. This growth rate indicates a positive job outlook for individuals pursuing a career in accounting.
With globalization and the expansion of businesses across borders, accountants with expertise in international accounting standards and regulations are in high demand. Additionally, the increasing complexity of tax laws and regulations has created a need for accountants skilled in tax planning and preparation.
Accountants who possess advanced degrees, such as a Master’s in Accounting or a CPA (Certified Public Accountant) certification, are expected to have the best job prospects. These credentials demonstrate a higher level of expertise and are highly valued by employers.
Growth by Specialization
Accounting offers a diverse range of specializations, each with its own unique growth prospects. Here are a few key areas of specialization within the field of accounting:
- Financial Accounting: Accountants specializing in financial accounting play a crucial role in preparing financial statements, analyzing financial data, and ensuring compliance with accounting principles.
The demand for financial accountants is expected to grow as businesses strive for accurate and transparent financial reporting.
- Managerial Accounting: Managerial accountants provide valuable insights to businesses by analyzing financial data and assisting in strategic decision-making. As companies continue to rely on data-driven decision-making, the demand for managerial accountants is expected to grow.
- Auditing: Auditors play a critical role in assessing the financial health and integrity of organizations. With increased scrutiny on corporate governance and the need for transparency, the demand for auditors is expected to remain strong.
- Tax Accounting: Tax accountants specialize in tax planning, preparation, and compliance. With the ever-changing tax landscape and complex tax laws, tax accountants will continue to be in high demand.
It’s important to note that the job outlook and growth for accountants can vary based on factors such as geographical location, industry, and individual qualifications. Staying up-to-date with the latest developments in accounting standards and regulations and continuously improving one’s skills will enhance career prospects in this field.
How to Boost Your Accounting Salary
Get Certified as a CPA
If you want to boost your accounting salary, one of the best ways to do so is by becoming a Certified Public Accountant (CPA). This prestigious certification is highly regarded in the accounting industry and can significantly increase your earning potential.
According to the Bureau of Labor Statistics, accountants and auditors who hold the CPA designation generally earn higher salaries than those without it. So, investing your time and effort into obtaining this certification can be a great career move.
Specialize in a Lucrative Accounting Field
Another way to boost your accounting salary is by specializing in a lucrative accounting field. While general accounting skills are valuable, having expertise in a specific area can make you more marketable to employers and potentially command a higher salary.
For example, specializing in forensic accounting, tax accounting, or financial planning can open up doors to higher-paying job opportunities.
Develop In-Demand Skills
To increase your earning potential in the accounting field, it’s important to stay updated with the latest industry trends and develop in-demand skills. This could include proficiency in financial software programs, data analysis, or even skills in emerging areas such as cryptocurrency accounting.
By staying ahead of the curve and acquiring sought-after skills, you can position yourself as a valuable asset to employers and negotiate a higher salary.
Consider Getting an Advanced Degree
While not always necessary, obtaining an advanced degree in accounting, such as a Master’s degree or an MBA with a concentration in accounting, can give you a competitive edge and potentially lead to higher-paying positions.
According to a study conducted by the American Institute of CPAs, CPAs with a graduate degree earn, on average, 15% more than those with only an undergraduate degree.
Gain Relevant Experience
Experience plays a crucial role in determining your accounting salary. The more experience you have, especially in roles with increasing levels of responsibility, the higher your earning potential. Consider taking on challenging assignments, seeking opportunities for growth within your organization, or even exploring internships or volunteer work to gain valuable experience.
This will not only enhance your skills but also make you a more attractive candidate for higher-paying positions.
Consider Moving to a High-Paying State
Location can have a significant impact on your accounting salary. Salaries can vary greatly depending on the cost of living and demand for accountants in a specific area. Research the highest-paying states for accountants and consider relocating to one of these areas if it aligns with your career goals.
For example, states like New York, California, and Connecticut have consistently been among the top-paying states for accountants.
By following these strategies, you can take steps towards boosting your accounting salary and achieving greater financial success in your career.
Accounting Salaries Compared to Related Fields
Accounting vs Finance
When it comes to comparing accounting and finance, both fields offer promising career prospects and competitive salaries. However, there are some key differences to consider. Accounting primarily focuses on recording and analyzing financial transactions, while finance deals with managing funds and making investment decisions.
According to a study conducted by the Bureau of Labor Statistics, the median annual wage for accountants and auditors in 2020 was $73,560. On the other hand, the median annual wage for financial analysts, a popular role in the finance field, was $83,660.
While finance professionals may have a slightly higher median salary, it’s important to note that accounting offers a wider range of career opportunities. Accountants can work in various industries, including public accounting firms, private corporations, government agencies, and non-profit organizations.
Accounting vs Actuarial Science
Accounting and actuarial science are two distinct fields that both require strong analytical and mathematical skills. Accountants focus on financial reporting and analysis, while actuaries specialize in assessing and managing risk in the insurance industry.
According to the Society of Actuaries, the median salary for entry-level actuaries in the United States is around $67,000. However, as actuaries gain more experience and attain professional certifications, their earning potential increases significantly.
Senior actuaries can earn six-figure salaries, with some even reaching the $200,000 mark.
On the other hand, accountants have a median annual wage of $73,560. Although actuaries may have a higher earning potential in the long run, accounting provides a broader range of career options, as accountants can work in various industries beyond insurance.
Accounting vs Data Analytics
With the rise of big data and technology, data analytics has become an increasingly sought-after field. Both accounting and data analytics require strong analytical skills, but they differ in terms of focus and salary potential.
According to the Bureau of Labor Statistics, the median annual wage for accountants and auditors is $73,560. In comparison, data analysts, who specialize in collecting, analyzing, and interpreting large sets of data, have a median annual wage of $87,780.
While data analysts may have a higher median salary, it’s important to consider the growth potential and demand for accountants. The field of accounting is expected to grow at a steady pace, with a projected 4% increase in employment from 2019 to 2029.
Additionally, accountants can specialize in areas such as forensic accounting, tax accounting, or management accounting, which can further enhance their earning potential.
Job Satisfaction and Work-Life Balance for Accountants
One of the key factors that contribute to overall job satisfaction for accountants is the balance between work and personal life. Maintaining a healthy work-life balance can greatly impact an individual’s happiness and well-being.
Let’s take a closer look at how accountants fare in terms of stress levels, work hours, work settings, remote work options, and opportunities for advancement.
Stress Levels and Work Hours
Accounting can be a demanding profession, with tight deadlines, complex financial regulations, and high stakes involved. However, it is important to note that stress levels and work hours can vary depending on the specific role and industry.
While some accountants may experience periods of intense workloads during tax season or year-end closing, others may have more predictable schedules throughout the year.
According to a survey conducted by the American Institute of Certified Public Accountants (AICPA), 74% of accountants reported moderate to high levels of stress in their jobs. However, it’s worth mentioning that proper time management, effective communication, and a supportive work environment can significantly reduce stress levels and promote work-life balance.
Work Settings and Remote Work Options
Accountants have the option to work in various settings, including public accounting firms, private companies, government agencies, and non-profit organizations. Each work setting offers its own unique advantages and challenges.
For instance, working in a public accounting firm may provide exposure to a wide range of clients and industries, while working in a private company may offer stability and the opportunity to focus on a specific industry.
Moreover, the COVID-19 pandemic has accelerated the adoption of remote work options in many industries, including accounting. This shift has allowed accountants to work from the comfort of their homes, eliminating commuting time and providing more flexibility in managing their work and personal responsibilities.
Opportunities for Advancement
Accounting offers a promising career path with opportunities for advancement. Accountants can pursue professional certifications, such as Certified Public Accountant (CPA), Certified Management Accountant (CMA), or Certified Internal Auditor (CIA), to enhance their credentials and increase their earning potential.
Furthermore, accountants can progress within their organizations by taking on more senior roles, such as financial controller, tax manager, or chief financial officer (CFO). They can also explore opportunities in consulting or start their own accounting firms.
It’s important to note that career advancement often comes with increased responsibilities and may require additional hours of work. However, achieving higher positions in the accounting field can lead to greater job satisfaction, increased earning potential, and a sense of professional accomplishment.
Conclusion
While accounting careers come with their share of stress and long hours, the earning potential is strong, especially for CPAs and accountants with in-demand specializations. With steady job growth on the horizon and abundant opportunities to boost salaries through certifications, skills development, and strategic career moves, accounting remains a stable and lucrative field for those with an aptitude for numbers, analysis, and business operations.
