Private accounting is a great career choice for those who want to have their own business and be their own boss. There are many benefits to choosing this career path, such as the ability to set your own hours and work from home. However, there are also some challenges that come with being a private accountant, such as having to wear many hats and taking on additional responsibilities. If you’re thinking about becoming a private accountant, here’s what you need to know.
1. What Is Private Accounting?
Private accounting is a relatively new term for an old job. It covers the same ground as bookkeeping and accountancy, but it focuses on smaller business operations where at least one of the owners spends more time than not involved in the business activity and therefore has a good working knowledge of its financial goings-on. Private accounting is then the art of keeping the books, maintaining financial records, and advising clients on whether or not a certain activity is advisable or not, for small businesses that are owner-operated.
2. What Does a Private Accountant Do?
A private accountant typically does the following three things:
- Keeps financial records for businesses, ranging from simple to complex. This includes keeping track of all incoming and outgoing monies, balancing ledgers every month, reconciling bank statements on a monthly or quarterly basis, preparing invoices, recording income and expenses into account software, etc.
- Provides financial advice to the business owner, which typically involves recommending better ways for the business owner to increase profits. The goal of private accounting is to help the client save money or make more money through strategic planning involving one or both of these two things: minimizing expenses and maximizing income.
- Prepares federal, state, local, and other tax returns for all types of businesses, including sole proprietorships, corporations, and partnerships.
3. How to Become a Private Accountant?
The good news is that you don’t need a Master’s degree to become a private accountant. You can complete all of the necessary training to be a bookkeeper and an accountant through online courses, certifications, and apprenticeships.
Online accounting courses: The first step in becoming a private accountant is to get your CPA certification. While you can get your CPA certification by going to college and working for several years, you can also get it through an online course. These courses typically take about a year to complete and cost anywhere from $3,000 to-5,000. Once you’ve completed these courses and passed the exam, you can apply to be a certified public accountant and work as a bookkeeper for several years.
Bookkeeping certification: Once you’ve purchased the CPA study materials and completed your CPA courses, you can start looking for online bookkeeping classes. These classes typically cost around $500 and take anywhere between three to six months to complete. Once you’re done with it, you can either keep it as a side business or use it as a stepping stone to becoming a private accountant.
Apprenticeship: The third option, and the one we recommend, is apprenticeship. An apprenticeship means you work for free for an experienced bookkeeper or accountant. You learn the ropes of the trade that way and even get paid during your time there. Then, once you learn enough, you can set up your own business and start working as a private accountant.
4. What Skills Do You Need to Become a Private Accountant?
If you’re thinking about becoming a private accountant, here are some of the essential skills that might help you become one.
- Good at math: Just to clarify, good at math doesn’t mean being able to solve mathematical equations faster than Einstein could. It simply means your brain is wired for numbers, and you can easily keep track of amounts in your head.
- Detail-oriented: The ability to focus on small details is essential when it comes to bookkeeping and accounting. That’s why you should be meticulous when it comes to keeping track of things down to the smallest detail because even a single penny could mean big losses in the long run if not accounted for precisely.
- Good communication skills: Being able to communicate well is essential when it comes to working with small business owners or individuals. You will be their guide in understanding how much money they are making or losing every month, so you need good communication skills to help them understand your point effectively.
- Quick learner: Since there are always new things to learn when it comes to bookkeeping and accounting, you need to be someone who learns new things quickly. If not, then working in this field would be very frustrating because information constantly changes with technology advancing every day.
- Business-savvy: As a private accountant, being business savvy is absolutely essential. You have to know how to market yourself, what are the best accounting software to use, how to make your clients comfortable with you, and more. That’s why it’s critical for aspiring accountants to have business knowledge before entering this field.
5. How Much Does a Private Accountant Make?
The income of an accountant depends on several factors, including their location, years of experience, and the type of industry they work in. On average, a bookkeeper with some experience can make anywhere from $35000 to $80000 annually. Accounting income, on the other hand, ranges from $45000 to $100000 generally. So you can see the difference in career income between bookkeeping and accounting is big. However, if you’re thinking about becoming a private accountant, it’s important to know that you won’t start working for this amount immediately – it takes years of experience before you can get to this level.
6. What Is the Job Outlook for Accountants?
The job outlook for accountants and auditors is expected to grow on average 11 percent in the next ten years. The government is also expected to hire more than 5 million accountants and auditors by 2022 to keep track of areas that need improvement and to help businesses follow the right steps to success. According to the BLS, the salary outlook for accountants and auditors is expected to grow steadily in the coming years.
7. What Does a Typical Day Look Like for a Private Accountant?
A typical day as a private accountant is not very different from that of accounting and bookkeeping. You typically check your email first thing in the morning, follow up on client questions and concerns, calculate their expenses and revenue for the month, do tax work if necessary. As you can see, there’s nothing really special about being a private accountant – it’s more of the same things you do as a bookkeeper and an accountant. You just do it for a smaller group like one company or individual, and that’s why you call yourself a private accountant.
8. What Is the Difference Between a Public Accountant and a Private Accountant?
While both jobs involve accounting, there are some key differences between them. A public accountant works for the government and tends to focus on financial statements such as balance sheets and income statements that show businesses or organizations’ financial status. At the same time, a private accountant works for small business owners or individuals and focuses on the financial records of their companies.
9. Where Do Private Accountants Work?
A private accountant can work in different places. They usually work from home, from their own office, or from a local coffee shop. If they have an established practice, then they will rent a commercial space to serve as their office.
Some of the top recruiting firms for a private accountant include:
- Robert Half, www.roberthalf.com
- Kelly Services, www.kellyservices.com
- Accountemps, www.accountemps.com
- Aerotek, www.aerotek.com
- Performing Gp, http://performinggp.com/careers/
- Accounting Principals, www.accountingprincipals.com
10. Private Accountants or Bookkeepers
While an important distinction is often made between a “bookkeeper” and a “private accountant,” they essentially do similar jobs: keeping records and reporting them to whoever needs to know, either an owner of a business or the government. The difference lies in what type of business they are keeping records for, which determines how much money is involved and whether or not tax returns need to be filed.
Bookkeepers specialize in working with small businesses that typically earn less than $2 million per year and don’t require them to file tax returns or payroll reports to government agencies. Private accountants work with a wide range of businesses, from sole proprietorships making less than $50,000 per year up to corporations and partnerships earning more than $2 million per year. They are also responsible for filing all necessary tax documents on behalf of the business owner(s).
Private accounting v interaction with their clients, whereas a public accountant typically works in an office environment. Public accountants also work for CPA firms, which are companies that provide tax. public accounting
Many people are familiar with the term “public accountant” but not so much with the term “private accountant.” The main difference is that a private accountant has more one-on-one interactions with their clients, whereas a public accountant typically works in an office environment. Public accountants also work for CPA firms, which are companies that provide tax.
11. Best Colleges to Study Private Accountancy
Some of the best colleges to study private accountancy include:
Queen Mary College (London, England)
Queen Mary College is located in the heart of London. The college offers undergraduate courses leading to an Honours Degree or BSc (Hons) in Economics and Business Administration with accountancy as a major subject. This includes the option to specialize in Financial Services and Accountancy.
University of Surrey (Guilford, England)
The University of Surrey has recently opened an Institute for Excellence in Private Sector Accounting. It is the only university in Britain to offer a degree in this subject. The course includes modules on company law, taxation; financial reporting; strategy and business planning; management accounts, audit and assurance, estate planning, and taxation.
University of Glasgow (Glasgow, Scotland)
The University of Glasgow was ranked as the 8th top university for accountancy in Britain, according to the 2009 Guardian University Guide. The uni offers a large number of undergraduate courses that include Accounting and Financial Management, Commercial Law with Accountancy, and Economics and Business Administration with Accountancy.
University of East Anglia (Norwich, England)
The University of East Anglia offers a range of courses that includes Accounting and Financial Management; Commercial Law with Accountancy; Economics and Business Administration with Accountancy; International Professional Qualification in Accountancy. The university also has an MSc in Taxation.
Manchester Metropolitan University (Manchester, England)
Manchester Metropolitan University offers BSc (Hons) degrees in Accounting; Business and Public Management; Economics, Politics, and Sociology; Financial Management. Many of the courses offer a module that deals with private sector accounting and financial analysis.
12. Online Courses to Study Private Accountancy
If you are interested in learning more about private accountancy, there are many online courses that teach basic accounting. Some websites to check out include:
The Complete Introduction To Accounting and Finance by Udemy
This course includes modules on accounts receivable, general ledger, payroll, and monthly financial statements.
Accounting in 60 Minutes – A Brief Introduction by Udemy
This course includes modules on the different types of accounts that are used in an accounting system, basics of debit and credit, preparing a post-closing trial balance.
Fundamentals of Accounting Specialization by Coursera
This course includes modules on double-entry accounting systems, accounting for equity investments, financial statement analysis, accrual accounting, and income recognition.
Accounting Essentials by Edx
This course includes modules on accounting information systems, financial statement analysis, accounting for leases, introduction to managerial accounting.
Working as a private accountant is a great way to start or further your career in the accounting field. With the right training and experience, you can work your way up to becoming a CPA and have an even more successful career. We hope this article has helped you learn more about what it takes to become a private accountant and that you feel encouraged to pursue this path. Are there any other questions you have about becoming a private accountant? Let us know in the comments below!