Public or Private?
Perhaps you’ve been toying with the idea of a career change or you’re about to graduate college. One of the biggest questions I get asked is “should I go work for a firm or work in private industry?” And the answer to that depends on your ambitions, goals, and the lifestyle you want for yourself and your family (or future family). Regardless of your goals, this is an important decision for your career plan if you want to arrive at your plan’s ultimate destination.
The distinction between public and private may appear simple but it can make a big difference on what your life looks like. Here’s a dissection of each to help determine which path is best suited to your goals and lifestyle.
Public Accounting
When we talk about public accounting, we’re referring to organizations where you will work with a range of clients to review and possibly prepare financial documents for an individual or company that is required for financing, buying or selling, or required to disclose to the public. You may work with mergers and acquisitions or tax planning.
Work Environment
The biggest differentiation between public and private is the travel. The work environment in public accounting is less predictable than private. Depending on the firm’s clients, you’ll very likely be required to travel to wherever those clients are located. Many public accountants travel internationally even.
Your work environment will be ever-changing day to day, so you will need the ability to work in an always changing environment, the ability to learn quickly, and suburb communication abilities.
You’ll do your work wherever the client has space for you and you’ll typically be under the pressure of strict deadlines to avoid overages which will lead to long workdays away from home. Some smaller firms may have less travel involved, but you’ll never avoid the deadlines and busy seasons.
What You’ll Do
You’ll most likely choose a specialty such as tax accounting, auditing and assurance, forensic accounting, valuation which comes with a specific set of job duties. If you work for a smaller firm, you may do a mix of duties such as tax and audit depending on the season of work. Your job duties could range from tax planning, to auditing financial statements, and more.
Certifications
Most likely you will be expected to obtain your CPA (certified public accountant). Many firms encourage their new hires to obtain this within year one to two. Most firms will cover the cost of the exam and provide study opportunties, but make no mistake, you will still be expected to work your tail off and meet deadlines in addition to your studies.
You will need your CPA if you are seeking to climb to a manager level. If you make the transition to private industry later in your career, your CPA will provide you a leg up when you go for that Controller opening.
Advancement
Advancement opportunities usually come quicker in public accounting. However, your competition will be fierce and you will need a CPA.
Have you planned your path? We can help.
Private Accounting
Private accountants or managerial accountants are responsible for the financial information of a single company. They prepare financial statements, analyze that data, and prepare management reports for executives to make decisions. Often times, the work of private accountants is reviewed by a public accounting firm.
Work Environment
Although you won’t have busy seasons and most likely you won’t be required to travel much, don’t think you won’t have your share of deadlines and busy times. Depending on the size and sophistication of the company you work at, there’s a chance that you’ll be under tight deadlines every month during closing periods, every quarter close, and every year-end close. However, the business of private is often less than public.
You’ll work for a single company so you can expect to work fairly regular hours in the comfort of your office very similarly to any other office job.
What You’ll Do
You’ll work with internal business partners and managers to compile financial data, create financial statements, and analyze that data to provide recommendations to managers on how to increase financial performance. Your job duties will revolve around management reporting including preparing journal entries, performing reconciliations, and creating management reports.
Certifications
Unlike public accounting, you most likely will not be expected to obtain your CPA. However, it can still be helpful, but plan carefully. It may serve you better if you’re planning on working for a publicly traded organization rather than a privately held one.
If you’re in manufacturing, distribution, or a product based business, you may want to consider a CMA (certified management accountant) certification. CMA’s involve heavy cost accounting and managerial accounting and can give you an edge in certain industries. By some stats, you could earn up to 46% more by having this certification.
Unlike public accounting, you can reach managerial levels without a certification in private industry.
Advancement
Although advancement opportunities may present themselves less frequently compared to public accounting. You can strategically plan to make moves that will advance your career. Most likely you will have to change employers to do so however.