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Accounting Pluses and Minuses

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Some of the good things about accounting...

Collegial work environment. Public accounting firms, particularly the Big Four firms, tend to hire large classes of newly graduated accountants. Being surrounded by so many people with similar interests and concerns makes acclimation to the firm and the job much more agreeable. It also provides fertile ground for networking opportunities. According to one public accountant, "I started with a class of almost 100 other graduates, and we bonded quickly through all of the training and client work. While most of these people have since left the firm, I still keep in touch with most of them, which is great since they've all fanned out to dozens of interesting companies. I've already turned some of them into clients and am working on many others. The networking opportunity is tremendous."

Skills apply to many functions. A strong knowledge of accounting is applicable across all management functions, including purchasing, manufacturing, wholesaling, retailing, marketing and finance. It provides a base from which to build broad knowledge about virtually all business functions and industries. As the collectors and interpreters of financial information, accountants develop comprehensive knowledge about what is occurring and close relationships with key decision makers, and are increasingly being called upon to offer strategic advice. Senior accountants or controllers are often selected as production or marketing executives because they have acquired in-depth general management skills.

Exposure to different companies. Public accounting offers rapid exposure to a number of different clients and activities, accelerating the attainment of skills and experience. According to one Big Four audit senior who specializes in entertainment industry clients, "I've been with the firm for less than three years, but I've become intimately involved in work for large industry players like Sony, Viacom and Disney, as well as for a good number of smaller entertainment and media companies. Being able to learn about the business of entertainment from the industry's benchmark companies has really sped up my professional development. Few professions would have offered me such a great learning opportunity."

Better hours and less stress than investment banking and management consulting. The hours and travel required by the accounting profession are much less stressful and more predictable than that found in investment banking and consulting. In public accounting, you generally know you'll be very busy for a few months out of the year and then settle in to a manageable 40- to 45-hour workweek, whereas I-bankers and consultants are notorious for regularly pulling 60- to 80-hour weeks (at least) and hopping on planes at a moment's notice. "As hard as I worked as an accountant, my life has truly been swallowed by my I-banking job," says one former auditor who, after attaining an MBA, is now an investment banker. "I pretty much work six days a week, with at least part of my Sunday spent on some work item or another. I actually had a life when I was an auditor -- not anymore."

Hobnobbing with executives. Public accountants spend a great deal of time visiting clients' offices and communicating with senior client personnel. They have a unique opportunity to venture inside some of the world's most successful companies and to interact with high-level client executives such as controllers, CFOs and CEOs. As a result, public accountants gain intimate familiarity with various companies' internal processes and operations as well as increase their network of senior industry contacts. Frequently these senior individuals will offer jobs to the auditors they have dealt with.

...and some of the bad

Lower pay than investment banking and consulting. The more manageable lifestyle has its trade-off: lower pay. On average, starting base salaries in accounting are 15 to 20 percent lower than investment banking or consulting, not including the bonus incentives that can significantly increase a banker's or consultant's overall pay package. According to the same former auditor/current investment banker from above, "I do make a lot more money as an I-banker -- I mean a LOT -- which does make up somewhat for losing my personal life, but it doesn't feel that way all the time. Sometimes it seems that, if you divided my I-banking compensation by the number of hours I spend working, I would be making about minimum wage." Bonus incentives are much smaller in public accounting, if they exist at all. "You'll never become stinkin' rich on an accountant's wage," adds one Big Four tax partner, "but I like to think that, since we are supposed to be conservative and intelligent in matters pertaining to money, we know best how to take care of our money and make it work for us. You will definitely lead a comfortable life."

Many bosses with different priorities. Accountants, particularly public accountants, are usually assigned to multiple projects at any given time and must prioritize and, when needed, learn to say "no." This is particularly true in public accounting, where multiple, simultaneous projects for different clients are commonplace. According to one auditor, juggling projects "has honestly been the hardest part of my job. Forget the clients, they're relatively easy to deal with -- it's the partners on those clients that get you. They all want you to focus on their projects first. On more than one occasion, a partner has screamed my head off, really got down and cursed, because of a perceived ‘lack of focus' on my part. You just have to try to explain your situation, try to demonstrate that you have everything covered and move on." This premium on time management is also present in investment banking and consulting.

Pressure to stay "chargeable." This is one of the subtler, yet highly sensitive parts of being an accountant. Like attorneys, public accountants generally work under billable hour arrangements (meaning they are paid by clients for each hour billed). This means that they must account for every single hour they work and accurately allocate them to each project they work on, whether client-related or otherwise. Being "chargeable" means billing a high percentage of your hours to work performed for paying clients as opposed to non-billable projects. This tracking of billable hours, while often tedious, is absolutely crucial to the profession -- it is the basis for how public accounting firms determine revenues, expenses, profitability, efficiency, performance and a host of other metrics.

With such vital items at stake, timesheets and chargeability are often the subject of much stress and consternation. "Yeah, we can work 60 hours in a week," says one audit senior, "but not all of those hours are chargeable to a client. Some days, you can spend time on a proposal for new business, some time on developing a new product or service and some time on performing general research on a specific issue. All of these activities are important to continued success, but they hurt you because none of them are chargeable to a specific client. In other words, the firm isn't getting paid for this work. While the firm values this non-chargeable work, it doesn't want you doing too much of it -- it wants you out there making money for the firm. So when you find yourself doing this stuff, your chargeability goes down and your performance numbers suffer, which can hurt your reviews, your pay check and ultimately your future at the firm. However, you can't err on the other side either -- you bill too many hours to your clients and you run the risk of going over budget and having the client give you the third degree on why the job is taking you so long. It can be pretty stressful."

Accountants frequently perform back-office work and, as a result, have little decision-making ability. Most financial companies are steered by the front office executives who determine and execute transactions needed to maximize revenue. Accountants are rarely consulted regarding the merits of these decisions, as their job is simply to compute and record the financial impact of these transactions.

Private sector accountants work on the cost side and as a result receive relatively low compensation. In other words, accountants who are performing internal functions do not generate revenue for the company. Typically, in order to command a high salary in the corporate world, an individual needs to generate revenue for the firm. Since most accounting roles are non-revenue generating, accountants' salaries are lower than those in finance careers.