In Warren Buffett's words, accounting is the "language of business." In our experience recruiting accountants for positions in the UK, we've realized this is true. But for readers to make their pick on whether accounting is a lucrative option is a whole different ball game. To help simplify the process, we at HireIQ have compiled our opinions on the pros and cons of picking accounting as a career.
Before we jump into accounting in 2022, let's cover our bases with some "need-to-know" points. Many advantages and disadvantages of being an accountant rely on understanding just what an accountant is and how that role changes.
Accounting sectors: Industry vs. Practice
In Accounting, going into practice is shorthand for employment with an accounting firm. These act as external agencies that juggle the accounting needs of multiple clients. Firms vary in size, from one-person operations to giant multinationals. The Big Four are the largest of these: KPMG, PwC, Deloitte, and EY.
Large firms bring various clients to the newly qualified accountant with different financial requirements. This leads to a wealth of work experience and adds a range of skills to the CV. It also defines career progression as accountants specializing in tax, audit, mergers & acquisitions (M&A), or advisory fields. Hence, it’s no surprise that most new accountants start their careers with an accounting firm, which provides structure and a group of more experienced colleagues to help newcomers.
However, committing to a life in practice in one of the larger firms can be a double-edged sword. Once an accountant has reached the managerial level within a larger firm, they would have acquired an industry-ready CV.
- Transitioning to industry positions often command higher salaries. But, more importantly, they unlock new and exciting career opportunities with strategic impact.
- Working in practice, accountants have to deal externally with the finances of client businesses. However, accounting firms don't interact with clients beyond their balance sheets and financial services.
- On the other side of the ledger, industry accountants work in-house for a single company. The role necessitates a more "hands-on" approach to the business. This is especially true for small companies, where accounting can be a one-person department.
For the business-minded, a role in the industry provides a unique advantage - the chance to get involved with the company, learn how a business operates, and (at higher levels) influence the company's direction.
Career paths by sector
As you might have guessed, accountants in industry and practice have different career pathways. In practice, it is usual to expect two years at each level in the hierarchy - although the highest rungs of the firm can pose an unbreakable ceiling.
While industry positions plot a similar course, with corresponding promotions and even identical titles, the roles and responsibilities can differ. Ultimately, it may be a matter of personality, ambition, or convenience that leads to the path you pick.
Non–Chartered prospective accountants are employed as "Associates." Graduates begin as entry-level associates, passing exams and gaining technical experience on the job. Having passed the requisite exams, associates will progress to "Senior Associates."
After four years on the standard graduate-entry pathway, those initial associates graduate to fully fledged Chartered Accountants (providing they pass their exams). Finally, the newly minted accountants are promoted to "Assistant Managers." This involves greater responsibility and a corresponding pay increase; Assistant Managers can expect to earn £45k in the UK or $54k in the USA (pre-bonus).
The next step for the Manager is where many accountants decide to make the change to the industry. Competition is fierce for the following promotions of "Director" and "Partner" in larger firms. But by contrast, qualified managers are in demand for high financial positions in businesses globally, as they are well-versed in external advisory, tax, and audit roles.
For accountants who pick the industry path, their decision comes at the cost of eschewing the clear-cut and streamlining career goals and milestones. Promotions come at similar levels and with similar responsibilities, but with some idiosyncratic obstacles.
The standard path for an accountant who chooses industry is to start as an assistant, become an analyst, then an accountant of various levels, right through until they reach the level of Financial Manager.
As previously stated, the in-house accountant can wear many hats, depending on the size of the business in question. As a result, there is a lack of variety vis-à-vis clientele and workload, with many companies requiring the same services annually. In contrast, for those interested in more diversity, in-house recruiting roles allow professionals to work with various departments to source talent for different business needs.
After Financial Manager is the coveted Chief Financial Officer (CFO) position. The CFO is, in some ways, a departure from true accounting, being more of a leadership position. It involves taking an active part in establishing the business trajectory.
Pro-tip: There are no hard and fast rules for accounting - however, the one guiding principle is that it’s always better to expand your CV. Staying in the same job, performing the same skills, year on year, won’t show employers you can rise to new challenges. On the other hand, professionals who focus on gaining experience and exposure by working in multiple firms under different capacities have impeccable CVs, resulting in better opportunities. This remains as true in 2022 as it had in 2002.
Pre-2022 accounting trends
- Demand for accountants has been a "top five" problem for firms since 2015. COVID only highlighted how badly this segment needs fixing for businesses to stay afloat.
- Technology's disruptive, innovative effect has been gaining steam for years, affecting departments of all sizes. However, COVID only fastened the process with the applied social distancing norms and work-from-home schedules at the time.
- Increased automation has slowly replaced the mundane, lower-level "number-crunching" tasks to enable accountants to focus on other high-impact, revenue-driven tasks.
- The rising tides of insufficient talent and technological advancements changed accountancy at every level. The decrease in talented professionals has forced companies to push accountants towards more value-based analytical, advisory and oversight positions.
- For management, accountants' roles increasingly deal with the interpretation and communication of data, as well as information systemization (the creation of new management systems to streamline accounting data impactful for management.)
Impact of COVID
COVID accelerated the trend in technology. Like other professions, Accounting saw the widespread adoption of cloud-based and virtual meeting software. In addition, businesses had to change old models overnight with the advent of working from home (WFM). Cloud-based technologies, in particular, have left the most radical mark on Accounting in 2022.
The primary concerns for accountants who secure their jobs vary by the department size they end up working alongside. For the smaller PAOs (Professional Accounting Organisations) of 1 - 2 people, keeping up to date with technology can be a struggle. We’ve seen this in follow-up interviews with accountants and reiterated in recent industry-wide surveys.
Disadvantages present unevenly among workplaces. If you’re considering being an accountant or swapping firms, be aware that the advantages and disadvantages vary with the type of accounting (practice vs. industry) as well as the size of the corporation.
The rise of technology and automation in the accounting space
For the past five years, technology has remained a top 5 concern with one-person PAOs. Yet, when it comes to technology, many believe they are between a rock and a hard place.
Traditional accounting software is on-premise, meaning someone needs physical access to the computer. However, with the new remote work conditions and flexible working hours, businesses need to be more responsive to these expanded business requirements.
For on-premise software, that response comes at a price involving the purchase of multiple licenses for different sites. But this can be an expensive ordeal. The alternative is cloud-based accounting software. The cloud isn't simply a place to store data. It is instead a PAO's access to cutting-edge solutions at an affordable cost.
A one-person PAO using the same on-premise software for 20 years may find switching difficult. In a larger team, software roadblocks can be easier to manage - thanks to tech-savvy colleagues. A hidden downside, even for larger teams, is that newcomers who work-from-home may find it hard or embarrassing to ask for help consistently.
The rise of automation, machine learning, and distributed software are impossible to ignore. In response, an American firm employing over 250 accountants has decided to pivot its business model.
“Our profession is changing and surviving. Thus we are now focusing on making the transition to becoming strategic and consultative.” - Dave Stonesife (Managing Partner; Herbein & Co).
The future of accounting and automation
For accountants who adapt, there are opportunities to expand beyond the traditional roles of accountancy into more strategic and advisory capacities. In addition, more and more employers desire operational ability with at least one cloud-based service.
The trends of 2022, accelerated by COVID, are changing the nature of accounting. The future may be automated, but unlike other sectors, this trend puts accountants in even greater demand. Interpretation and advice will be crucial to navigating the river of accounting data that springs from automated software.
However, just because the machines are coming does not mean there is no future for traditional accounting. Indeed, the rise in cyber-security threats makes it paramount that audit and tax professionals are there to spot irregularities.
Supply & demand of accountants
As the infographic in the above folds emphasizes, there are simply insufficient accountants for all business needs. Like technology, this can be both a positive and a negative.
Tracey Golden, previous chair of AICPA, said she believes '... we are facing a talent shortage that is unlike any other I have seen in my career.'
This resonates with us. Here at HireIQ, we recruit accountants for positions in Northern Ireland, UK. Unfortunately, over the last five years, we've seen how career opportunities have far outstripped the number of qualified accountants.
There remains, in 2022, a PR crisis for accountants portrayed as shackled to their desks, crunching numbers with no role other than shuffling files into a drawer. This has to change.
Recent events that stirred the accounting ecosystem
It’s a mistake to assume accountants are immune to the wider world of 2022 geopolitics.
This leads to the first downside of being an accountant. Despite being the furthest career from a politician, accountants across the globe grapple with regulatory changes in their respective nations.
In America, Accounting and Tax implications from the COVID stimulus led to shifting through roughly 5,500 pages of new provisions. For our clients in the UK, the 2022 Northern Ireland [NI] Protocol Bill has had considerable consequences for VAT. Ripples from the political ecosphere are reaching accountants from Beijing, Boston, and Belfast.
The impact of post-COVID work settings in the Accounting setup
The single greatest accounting change in 2022 we noticed, as recruiters, is the scope and variety of in-office, remote-working, and hybrid models. We first saw this with larger clients seeking candidates who could work entirely from home but were also required to periodically “check in.”
A concern moving forward is that only the younger candidates would be willing to use the technology implicit in the role. However, clients of all ages apply and thrive in these positions. In addition, accountants have well received the flexibility - with many choosing a hybrid system that works for them.
There has never been a better time to get into accounting for young graduates, prospective accountants, or anyone considering a career change. It promises a financially rewarding career with clear, upwards progression in an industry which highly values your skill set.
For many, the dull and repetitive work stereotype prevents them from considering it an option. Accounting does still require methodical and detail-oriented people. However, automation and cloud computing are already consigning those stereotypes to last year’s tax receipt. A clear advantage for accountants in 2022 is using technology to bypass repetitive work.