What Financial Accountants Do
Financial accounting is what most people would envision as the field of accounting. Duties include monitoring an organization’s spending and cash flow, preparing financial records and statements, allocating funds to specific departments or projects, conducting internal audits, and ensuring the company is compliant with all regulations. It should not be confused with management accounting, which includes some of the same job duties, but has a more forward-thinking and predictive nature in order to help the organization make sound decisions. Financial accountants only work with hard numbers resulting from events that have happened.
Who would enjoy a career in Financial Accounting?
Financial accountants are first and foremost, good with numbers. Their analytical nature and keen eye for detail helps them identify issues, track expenses, and ensure the books stay balanced. In addition to being skilled at mathematics, comfort with technology is essential, as financial accountants will use a myriad of programs to budget, track, and create reports.
Naturally, being highly organized and having good time management skills are essential too. It’s also worth noting that, although most of a financial accountant’s work will be at his or her desk, being an effective communicator will be beneficial when working with other accountants, business professionals, and reporting to senior staffers or execs. This career tends to appeal most to those who want a finance career, but prefer to have a standard workweek and minimal stress compared to other finance careers such as investment banking.
Who mightn't like the career?
Financial accountants do a lot of repetitive work, so it may not be the ideal choice for someone who needs a lot of variation and physical activity on the job. In some situations, there may also be pressure on the financial accountant to make numbers look a certain way. In which case, those who are unprepared for the pressure and cannot present the numbers as they stand are not going to have positive outcomes in the field.
Lastly, although financial accountants work fewer hours than others in finance might, they also tend to have smaller salaries as a tradeoff, so those who are motivated by money and growth opportunity may prefer a different career.
A bachelor’s degree in a business or accounting-related field is generally the minimum requirement to get into the field. Licenses may be required to work in some jurisdictions, and belonging to a professional organization is beneficial, if not mandated. In these cases, accreditation through a body such as the American Institute of Certified Public Accountants (AICPA), Chartered Institute of Public Finance and Accountancy (CIPFA), Institute of Chartered Accountants in England and Wales (ICAEW), or Association of Chartered Certified Accountants (ACCA) is expected.
Many firms and organizations offer graduate schemes in which individuals can gain working experience while working on an advanced degree. Internships, particularly at large firms, are very competitive. A polished resume and reviewing a company’s expectations prior to an interview are helpful.
Moving into Financial Accounting from another career
Accounting can be a great career switch for anyone who has the knowledge necessary to perform the duties, and sometimes taking a few classes on the side is enough to provide for a smooth transition. “How They Got Here: CPAs Who Joined the Profession Later in Life Reflect on Their Journeys” explores the stories of a buyer in the fashion industry, plumber, sheriff’s deputy, and business consultant who became CPAs later in life. “How to Enter Accounting as a Second Career” and “The Definitive Guide to Accounting as a Second Career” also offer practical tips for those hoping to change careers.
Role: There isn’t a clearly defined career ladder for financial accountants. Some firms may designate junior and senior levels, while others may use traditional titles like analyst and associate. The work of a financial accountant doesn’t generally vary much in any of these positions, though. Professionals will still be tracking expenses and compiling reports, but they may be assigned to work for specific departments or only handle certain tasks.
Data from PayScale concludes that 20% of financial accountants have been on the job for 10-19 years, and 15% have been in the role for 20 or more years, meaning a significant portion of people who get into the field never change careers or attain a different title.
Role: Those who wish to move up the career ladder may move into an accounting manager role. These professionals oversee the accountants, establish systems, improve methods, and handle the hiring, training, and mentoring of employees.
Chief Financial Accountant (CFO)
Role: Although not every accounting manager follows the path to CFO, the executive position is the goal for many. CFOs handle the company’s risk management and oversee financial departments. Their jobs are largely strategic in nature.
Financial accountants do not generally travel unless they reach the executive level.
Financial Accountant: Data from PayScale indicates that base salaries average USD$55,000 in the United States, ₤35,000 in the United Kingdom, CAD$57,000 in Canada, and AU$74,000 in Australia. Overall, there is only a 10-20% gap between entry-level financial accountant salaries and those with 20 or more years of experience, dependent on the region.
Accounting Manager: USD$67,000, £32,000, CAD$67,000, and AU$78,000.
Chief Financial Officer: USD$134,000, CAD$141,000, ₤113,000, AU$166,000.
Bonuses and profit sharing may add as much as one-third to a financial accountant’s salary and are often tied to the performance of the organization.
Why Financial Accountants move on
Most financial accountants stay in the field happily for an extended period of time, if not for life. However, lack of career advancement opportunities and job insecurity may cause some to move on. In these cases, other finance and accounting positions may provide additional mental stimulation and often better pay. For further reading, see “Itching to quit?” and “Master Plan to Quitting My Accounting Job.”