You’re looking out over the holiday horizon and breathing a sigh of relief. 2016 jumped on you like a cheetah on a sick antelope, and you’re ready to shake this whole thing off and start fresh. Even so, you’ve got worries. Namely, that time is just an illusion, meaning the trauma of “this year” will continue into the future regardless of our naming conventions. That’s an issue.
More addressable, perhaps, is your current job. The one you either hate or are interested in mixing up a bit in the New Year. I’ve got good news – not about the “time being an illusion created by man’s desire for order” thing, that’s just going to keep haunting you.
On the job front, 2017 could be the perfect time to make the jump to accounting. In this piece, we’ll talk about what being an accountant entails, how to become an accountant, and what the future looks like for the field. So stand up and toss that murderous cat off your back – it’s time to talk about a new life.
What do accountants do all day?
You’re going to need to like math. That’s step one to having a positive experience as an accountant. What accountants do all day is math of one sort or another. There’s more to the job than just addition and subtraction – actually, a lot of it is multiplication – but math is the backbone on which the field of accounting is structured.
As long as there has been commerce, there’s been a need for keeping track of things. How many sheep you raise next year is largely dependent on how many you sold this year. Add on concerns about the cost of raising sheep, the amount of money you owe some fancy-pants lord for selling the sheep, and the amount of cash you’ve stuffed in your local bank – probably a guild- or church-based system – and you’ve got a huge amount of information to track.
Double-entry accounting, which is accounting as we know it, was developed in the 15th century by Luca Pacioli. He created a system that tracked the basic accounting equation – “Assets = Equity + Liabilities.” Fast forward a few hundred years, and this is still the system that drives accounting today.
If you’re just focused on making those numbers add up, you’re usually referred to as a bookkeeper. Besides having a name that has three double-letters in a row, bookkeepers are the folks focused on making the numbers balance out. If you’ve ever worked in retail, you’ve done a very small amount of this job when you balanced your register at the end of a shift. Make sure the cash and credits entered is equal to the receipts you’ve got.
Accountants take the business to the next step. They use the data that’s generated in daily operations to figure out how the business should be run and to make reports that inform the business owners. In our sheep example, a bookkeeper is the one making sure the $1 spent ended up as a $1-worth of feed each day. The accountant is the one telling the landowner how much profit they made and how many sheep they should buy next year based on the last three years of sheep sales.
The reporting trifecta
For the past century or so, accountants have been focused on generating three reports for businesses. The first is the profit and loss statement, also called an income statement. Next, a balance sheet that shows how the business’s property and cash changed over the course of the year. Finally, the statement of cash flows, which helps businesses understand if it’s actually making money.
These reports are considered the bedrock of financial analysis, and they go a long way toward making tax season and regulatory compliance a simple process. Because of that, accountants have typically spent time making these things after ensuring that the numbers entered by a business are accurate.
You see how I slipped that little line in – “ensuring that the numbers entered by a business are accurate?” That’s actually a huge part of what accountants have been doing. Businesses are notoriously bad at keeping track of what they spend, what they spend it on, and what money they make off the back of those expenses.
While the reports are pretty straightforward to make, assuring that the underlying data is accurate can take an immense amount of time. That’s changing, which is changing the role of the accountant in business, but we’ll get to that in a minute.
How to become an accountant
So if you like working with businesses and you like numbers and you still think accounting is for you, how do you actually make your dream a reality?
First, you’ll need some sort of education. Depending on what kind of accounting you want to do, this can take a couple forms. If you’re planning to work for a large corporation as a staff member in the finance department, you’ll probably want to do some college-level coursework. Your company may want a certification, but it also may not care.
If you want to work for an accounting firm and work with a variety of clients, you’ll probably want to become a CPA – certified public accountant. That means having a specific number of higher education accounting hours under your belt. This requirement varies by state, so you may need just 30ish hours in accounting, or you may need a BA, as well.
Even if you end up without needing to become a CPA, you’ll likely want to get some sort of certification in the future. These range from the broad to the specific and from the simple to the complex. Robert Half put together a list of accounting certifications along with their requirements that can be helpful when considering your next move.
Depending on your existing skills, education, and career goals, making the move to accounting can take anywhere from one to six years. As an example, consider Capterra’s home state of Virginia. If you want to take the Virginia CPA exam, you’ll need 120 semester hours of education, a BA or higher degree, and an accounting concentration equivalent to 24 semester hours of accounting and business coursework (48 hours total). As a comparison, in Maryland, you only need 30 hours of coursework.
There’s no short answer to your individual scenario, and before you go spending time and money on courses, be sure to talk to someone who can guide you down the right path.
The future of accounting
By the time you’re actually set up as an accountant, the world is going to look very different. I don’t care if it takes you one year or one decade. Things are changing so quickly that what accountants do right now is unlikely to remain fixed for much longer.
Accounting technology has given accountants more time to work on things that add genuine value to their clients’ businesses. Remember when we talked about verifying the work that bookkeepers and business owners put in and how much time that can take? Software is changing that.
New software options can learn what kinds of expenses you’re generating and automatically tag them so that clients introduce fewer human error elements. You can also have banks automatically sync with accounting software, and some systems can even flag just the potential errors, letting accountants manage by exception.
With all that work being done on the backend, accountants have more time to give over to reporting, forecasting, and planning. The accountant of the future is going to look more and more like a consultant, giving expert advice on financial matters.
You’ll be the person that comes along with the plan to save and make money, not just the person who does the taxes and hands over the reports. It’s an exciting time to get into accounting, in short.
If you’re looking for more on the future of accounting, check out my pieces on prepping for the future of accounting and how to account like a consultant. Good luck in 2017, I’m sure that cheetah’s just going to give up in January.
Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.