The Skills Bookkeepers Can Transfer Into a Career as a CPA
The general public often uses the term “bookkeeper” and “accountant” interchangeably, and for good reason. As business and financial industry professionals know, even though bookkeeping and accounting consist of very distinct professional services, those services are still deeply intertwined, particularly in smaller organizations. Well-kept books, or financial records, are not only a bookkeeper’s primary responsible, they’re essential to accountants, whether in a corporate, individual, non-profit or government setting. Further, most accountants conduct at least some bookkeeping, while some bookkeepers also conduct financial accounting.
The chief difference between bookkeeping and accounting is functional. While bookkeepers document financial transactions and data, such as costs, revenues, checks written/received, and invoices, accountants process and analyze financial transactions and may also recommend process- and profit-improvement strategies to management. Seasoned bookkeepers employed by smaller organizations that elect not to hire an accountant usually conduct at least some basic accounting themselves.
Certified public accountants, licensed through a state Board of Accountancy, typically manage all the financial documentation a company is required to disclose to the public. CPA’s provide arguably the most complex of the many and varied professional services accountants offer. According to the U.S. Bureau of Labor Statistics (BLS), those services are also the most attractive to employers.
Not only can CPA’s expect to command top employment prospects in the coming years, the BLS projects, they can also anticipate top salaries in their field as the economy recovers and major U.S. industries, particularly business and finance, continue globalizing.
The average CPA salary is particularly attractive when compared with the average bookkeeper’s. For instance, the 2015 Robert Half International Salary Guide suggests a base rate of $ 38,500 – $ 57,250 for bookkeepers, regardless of employer’s size or employee’s term of professional service. For public accountants, the lowest salary recommendation, suggested only for those with up to 1 year professional experience and provide audit/assurance services at a small firm, is $ 43,250 – $ 53,750.
At the other extreme, the guide’s top suggested salary for a CPA in 2015, recommended for a senior manager or director providing tax services at a large firm, clocks in at $112,000 – $ 183,000. It doesn’t take a financial expert to understand the meaning of those numbers.
That said, bookkeepers interested in enhancing their employment, earnings, and job security prospects by earning CPA certification are best served by thoroughly exploring regional and local employment and salary data and conditions, as national data are not always directly reflective of local conditions. Bookkeepers seeking to transition into a career as a CPA should also explore the educational and professional requirements necessary for licensure in their home states.
The first step for bookkeepers who do decide to pursue a stable and rewarding career as a CPA is education. Forty-six states and the District of Columbia require 150 credit hours of college education in order to sit for the national, four-part Uniform CPA Exam. Because 120 credit hours is the standard for bachelor’s degree candidates, 150 credits amount to a Master’s degree in accounting, although an advanced degree is not technically required. Some states also require professional experience prior to certification, and almost all require continuing professional education (CPE) credit for licensure renewal.
The Uniform CPA Exam, conducted in four parts and created and scored by the American Institute of Certified Public Accountants (AICPA), is extremely difficult. Qualification for a seat alone is an accomplishment. The difficulty of the CPA Exam is widely acknowledged, and at least 500 hours of study and review are recommended prior to sitting for the exam. Multiple resources exist to help today’s CPA candidate prep for the exam, including online CPA Review Courses offered by numerous educational establishments. CPA candidates are advised to consider their program and financial options carefully before enrolling.
Readers who read this article also read: Tips On Becoming a CPA & What Is the Difference Between Applying for the CPA Exam and for Licensure.