About Accounting

Any business or enterprise, whether it is large or small is based on accounting. Accounting as defined by the American Association of Accountant is, “the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information.” The American Institute of Certified Public Accountants (AICPA) defines it as, “the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events, which are in part at least, of financial character and interpreting the results thereof.” It is the act of collecting information about the usage of resources which helps in the analysis of trends, cost provisions, billing, or auditing.

Any business whether it is for profit or non-profit, public or private, needs to keep a track of its assets and incomes over a period of time. It gives them an insight into the working of the organization by churning out information by way of reports, calculates and computes all business activities, and passes on this information to the top level executives.

Accounting systems are of two types. The one which is for internal consumption is known as management accounting and its utilization is within the business for the managers, owners/CEO/COO, auditors and employees. This kind of accounting provides a basis by way of which operating decisions are made by the management. The external or financial accounting is to provide information outside the business to entities such as shareholders, banks and vendors who are the creditors of the company, economists, financial analysts or governments. Financial accounting is very structured and follows certain patterns of rules and regulations as it caters to different needs of the people perusing it and is governed in a particular jurisdiction by General Accepted Accounting Principles (GAAP). Other rules that financial accounting is governed by is International Financial Reporting Standards or IFRS or the US GAAP.

Salary and Earnings of an accountant

Years of experience always has an effect on the kind of salary a person receives.

No matter what field the person works in experience will always benefit them in getting a higher pay scale.

The salary and earnings are dependent on a variety of other factors such as which part of accounting the person is associated with, what kind of education and certification that they have, which industry they work in, the geographical location etc.

The average annual salary of a staff accountant is between the ranges of $ 31,194 and $ 56,649 which is inclusive of bonus and profit sharing.

• Years of Experience

§  Experience of less than one year the salary range is between $ 30,685 and $ 51,147 and the hourly wage range is between $ 9.67 and $ 19.86.

§  Experience between one to four years the salary range is between $ 32,691 and $ 53,376 and the hourly wage range is between $ 11.86 and $ 21.85.

§  Experience between five to nine years the salary range is between $ 35,236 and $ 58,832 and an hourly wage range is between $ 14.30 and $ 25.09.

§  Experience between ten to nineteen years the salary range is between $ 36,198 and $ 61,071 and an hourly wage range is between $ 14.24 and $ 26.37.

§  Experience of more than twenty years the salary range is between $ 35,922 and $ 64,393 and an hourly wage range is between $ 15.11 and $ 27.39.

• Industry

§  A staff accountant working in the accounting department of a accounting auditing and tax services gets an annual salary range between $ 33,059 and $ 54,888 and an hourly wage rate between $ 11.87 and $ 24.30.

§  A staff accountant working in the accounting department of manufacturing and distribution gets an annual salary range between $ 34,373 and $ 57,536 and an hourly wage rate between $ 12.50 and $ 21.44.

§  A staff accountant working in the accounting department of a healthcare gets an annual salary range between $ 34,160 and $ 53,791 and an hourly wage rate between $ 13.28 and $ 23.87.

§  A staff accountant working in the accounting department of real estate property management gets an annual salary range between $ 34,777 and $ 53,820 and an hourly wage rate between $ 13.38 and $ 23.20.

§  A staff accountant working in the accounting department of tax and audit services get an annual salary range between $ 34,641 and $ 54,280.

§  A staff accountant working in the accounting department of retail or wholesale distribution gets an annual salary range between $ 34,014 and $ 55,791.

• Salary by Certification

§  A staff accountant having a Certified Public Accountant certificate earns an annual salary range between $ 38,692 and $ 58,087 and an hourly wage rate between $ 13.66 and $ 29.14.

§  A staff accountant holding a Business Certificate gets an annual salary range between $ 31,585 and $ 55,983 and an hourly wage rate between $ 12.38 and $ 24.93.

§  A staff accountant holding a Chartered Accountant certificate gets an annual salary range between $ 35,180 and $ 64,710 and an hourly wage rate between $ 13.70 and $ 24.83.

§  A staff accountant having an Enrolled Agent certificate gets an annual salary range between $ 34,947 and $ 58,490 and an hourly wage rate between $ 10.56 and $ 33.68.

§  A staff accountant having a Certified Management Accountant gets an annual salary range between $ 34,255 and $ 61,277 and an hourly wage rate between $ 16.05 and $ 20.63.

§  A staff accountant holding a Certified Payroll Professional credential gets an annual salary range between $ 43,500 and $ 50213.

§  A staff accountant holding a Bookkeeping certificate gets an annual salary range between $ 40,000 and $ 48,112.

• City

§  A staff accountant in the accounting department in New York, New York gets an annual salary range between $ 35,947 and $ 63,683 and an hourly wage rate between $ 11.10 and $ 25.20.

§  A staff accountant in the accounting department in Chicago, Illinois gets an annual salary range between $ 36,632 and $ 57,485 and an hourly wage rate between $ 10.12 and $ 22.64.

§  A staff accountant in the accounting department in Houston, Texas gets an annual salary range between $ 36,014 and $ 58,509 and an hourly wage rate between $ 11.74 and $ 24.11.

§  A staff accountant in the accounting department in Atlanta, Georgia gets an annual salary range between $ 34,710 and $ 54,320.

§  A staff accountant in the accounting department in Dallas, Texas gets an annual salary range between $ 36,766 and $ 55,182 and an hourly wage rate between $ 13.14 and $ 23.11.

§  A staff accountant in the accounting department in Los Angeles, California  gets an annual salary range between $ 31,983  and $ 59,860 and an hourly wage rate between $ 14.09 and $ 25.07.

§  A staff accountant in the accounting department in Boston, Massachusetts gets an annual salary range between $ 37,360 and $ 56,273.

According to the modern trend there are more females than males working in accounting profession.

The percentile figure for female is 63% to 73% of males.

The female accountants receive an average annual salary within the range of $ 38,282 and $ 49,873 whereas their counterparts the males receive an average annual salary between the range of $ 38,481 and $ 49,406.

They are entitled for the usual benefits or perks in the industry such as 401(k), paid holidays or vacations, paid sick leave, reimbursement towards further education, disability and life insurance, etc.

They also get the common health benefits and 81% said that they receive medical benefits, 62% said that they receive dental benefits, 44% said that they receive benefits towards vision, while 17% said that they do not receive any common health benefits.

Certification and Licensure

There are many credentials that a person can opt for in accounting. The various certificates that a person can opt for are detailed below.

• CPA or Certified Public Accountant – This is the most sought after credential by the employers and hence students opt to get this credential. CPAs are licensed by their State Board of Accountancy. The candidate has to pass a national exam and meet the requirement as laid down by the State to practice can become CPAs.
• CIA or Certified Internal Auditor is granted by the Institute of Internal Auditors and the candidate has to have a bachelor’s degree or its equivalent from  an accredited college or university. Must also have 24 months of internal auditing experience. If a master’s degree holder opts for this then he requires 12 months of internal auditing experience.
• FPC or Fundamental Payroll Certification and CPP or Certified Payroll Professional granted by the American Payroll Association.
• CPB or Certified Public Bookkeeper granted by the National Association of Certified Public Bookkeepers.

There are many more certification options open to candidates choosing accounting with the specialisation in the field of their choice.

Duties and Responsibilities of an Accounting Job

The duties in accounting differ according to the position and title of the person working in it.

It also changes as per the industry that they are working in, the setting that they work in, the employer type that they work for.

The general duties and responsibilities in accounting is described below.

• Preparation of income and expenditure statements, along with the monthly closing and reports on cost accounting.
• Document business transactions and pass entries in general ledgers.
• Following the accounting principles and establishing and maintaining adequate controls.
• Preparation and checking of accounting and other systems reports and monitor them for accuracy and completeness.
• Preparation and checking of accounting documents such as budgets, expenses, revenues, payroll entries, invoices, bills, etc.
• Revenue and expenditure trends to be reviewed and make appropriate budget recommendation ensuring that expenditure is kept in control.
• Explain the policies to vendors, clients and employees regarding invoices and billing.
• Perform bank and account reconciliation to resolve any discrepancy in accounting.
• Maintain the financial data bases both computerised and manual and also recommend and develop new ones or suggest improvements.
• Oversee the feeding and handling of computerised financial data or reports.
• At the time of internal as well as external audit give full cooperation to them to see that the audit goes smoothly and timely.
• Perform any other duties as assigned by the management.

Educational Qualification for an Accountant

The educational qualification of staff in accounting differs according to the size and structure of the organization and the position or the title that they are working in.

• After high school a person who is interested in accounting can take up the college level two years full time study associate degree.
• A person who is aiming for a higher position in a firm can opt for a bachelor’s degree.
• This takes four years to complete while studying full time. A person interested in pursuing a CPA (Certified Public Accountant) qualification will have to go through a bachelor’s degree.
• A bachelor’s degree opens better doors in accounting and a master’s will help in specialising in a particular field of accounting.
• After a bachelor’s degree it will take another year to complete a master’s in a university or college.

Skills and Abilities for an Accountant

• Excellent verbal and written communication skills are required.
• They have to be accomplished in mathematics.
• They must ne analytical, highly organised, and must have the ability for problem solving.
• They not only should have the ability to work alone but their job demands that they also be able to work efficiently and cordially as a team.
• Must have the skill to assimilate information and monitor tasks.
• Must have a tolerance to stress and must be able to work in time bound and pressurised work atmosphere.