3 Key Accounting Roles
Do you need an accountant for your small business? Absolutely. Every business needs dedicated accounting support. That’s because accounting includes everything from record keeping and taxes to financial planning and regulatory compliance. A strong accounting system helps you organize and understand your company’s financial state, including:
- Government requirements: Tax filings, compliance documents, and audits
- Reporting: Annual reports, quarterly financial reports
- Big picture: Analysis of company financials
- Decision-making: Weighing of company growth decisions
There are three types of accounting help your company can hire: clerks, accountants, and CPAs. All levels of accounting professionals should have a firm grasp of several basic skills, such as communication, mathematics, critical thinking, and data management. While they share similarities, there are important distinctions based on educational requirements, duties, and compensation.
Accounting clerks perform administrative financial tasks such as entering transactions into accounting software, sending invoices to customers, and administering employee payroll. Depending on the extent of their role, some clerks may also act as bookkeepers. At a minimum, clerks need a high school diploma to qualify for entry-level positions, but most companies now require additional education and on-the-job training. Clerks are typically the lowest level of accounting help that you can find, and they work under the supervision of professional accountants.
Compensation for clerks varies widely based on education and experience. According to the Bureau of Labor Statistics (BLS), the median pay for an accounting clerk is $42,410 annually. Entry-level clerks with little to no experience and minimum education earn less than $27,050 per year, while clerks with significant experience and/or bachelor’s degrees can earn $63,900 yearly.
By contrast, accountants take charge of financial records with a focused eye on ensuring that all transactions meet business and legal standards along the way. They’re specially trained to perform functions such as calculating taxes and filing returns; preparing and explaining financial reports; and advising businesses on ways to reduce costs, increase profits, and streamline money procedures. Depending on the size of your company, senior accountants may manage other accountants or accounting clerks.
A bachelor's degree in accounting or business is the typical minimum requirement to enter the profession, and some accountants may have master's degrees in accounting or business administration. Certifications from national organizations, such as the Institute of Management Accountants, may be required depending on if the accountant wishes to specialize in a particular discipline.
According to the BLS, accountants earn a median salary of $73,560 per year. However, entry-level accountants might earn less than $45,220, while senior accountants have an earnings potential of up to $128,680 per year.
Certified public accountants (CPAs) are licensed by the state board of accountancy to perform the highest level of financial recording and disclosure. These professionals often act as department heads in corporations and take responsibility for an organization's overall financial dealings, regardless of who performs them. Accountants who file with the Securities and Exchange Commission are required to have their CPA license.
CPAs must have at least a bachelor’s degree in accounting, and many have their master’s in accounting. The path toward earning this credential usually requires relevant work experience, verified by a licensed CPA. (In Utah, that means at least one year of accounting experience.) But arguably the most important part is that CPA candidates sit for—and pass—the Uniform Certified Public Accountant examination. CPAs are also licensed by their state’s board of accountancy, and depending on location, additional exams, such as the AICPA Ethics Exam, may be required.
Not surprisingly, CPAs earn the highest salaries in accounting. According to PayScale, CPAs average $69,733 annually. Entry-level CPAs earn about $55,099 per year, while the most senior CPAs earn up to $116,000 annually. If you want a CPA to head the financial division of your corporation—such as a CFO or VP of finance—expect to dish out even more. PayScale shows an average salary of $151,931!