My plan is to finish my Bachelor’s in Accounting and work at a regional public firm in Houston or Atlanta for a few years, gain some public accounting experience, and switch over to industry/corporate. I’d like to make at least $60k five years after college.
Let’s just assume I won’t get my CPA and won’t work at the Big 4. I recently asked this question to an accountant with both a CPA and Big 4 experience, and the response I received was:
With only a bachelor’s and no Big 4 experience, the most you can probably hope to make is $45-50k. You’ll likely be in payroll, A/P, or A/R, maybe staff accounting if you’re lucky. And without a CPA license, you will be capping yourself out at a low-level manager position, so your career will peak when you’re 30. From then on you will be competing with people with Big 4 and a CPA license just to keep your job. Don’t expect much job security.
Break this into two questions: CPA license and Big 4.
My $.02 (after 25 years in public accounting), get the CPA license if at all possible, it will always serve you well for the rest of your career. It will offer you much more opportunity and the truth is you never really know where you’ll end up.
As for Big 4, do it if possible. If not, a national, regional or local firm will be fine.
In conclusion, do everything in your power to get a CPA license. Spend a couple years working in public.
It’s hard to say. I know some accountants without CPA licenses who have been very successful financially, but they found their way into very specialized areas. One guy who comes to mind was a sales tax specialist, but he started his career with our state’s sales taxing agency. He then went to Big 4 from there. Another non-CPA buddy became a very deep specialist in escheat accounting (unclaimed property).
Forget the Big 4, but why not at least try to pass the CPA exam and get licensed? At some point you will apply for jobs that say “CPA preferred.” Not to say you won’t get hired, but your competition may have a leg up on you.
The Big 4 thing is ridiculous – depending on where you live, starting salaries for CPAs even at smaller firms is higher than the numbers that your source quoted. Big 4 is great experience but there are hundreds (thousands?) of CPA firms in the country as well as other companies that hire CPAs.
I think it’s iffy to not get your CPA license. It’s not a career dealbreaker; there are plenty of folks even at CPA firms who don’t have it yet, but many of them have policies that essentially say that you need a CPA to promoted to manager.
Your stated career path (public accounting for a few years and then moving to industry) is very popular and it’s a good plan. The only thing I would recommend is to make sure that you put in the time with public accounting before moving. I know a lot of people who did exactly that, and it really does matter how many years or high up you were in the firm when you’re trying to move to a private company. One or two years of experience is good, but what often ends up happening is that you end up getting stuck doing internal audit or the low-ranking clerk positions that you describe. If you put in the time and work your way up to senior associate or manager you are competitive for better/higher positions in industry. It might take 5-7 years instead of 1-2 but I think it’s worthwhile.
If you’re in college now, it’s probably best to seriously consider getting the CPA though. Once you start working, the time commitment for studying for it becomes harder to manage. It’s certainly possible but it’s not as easy as it could be. Is there some reason why you don’t want to get it?
If I don’t get the CPA, then is it true that my career would be capped out at 30 as a senior accountant and I’d lose job security (I wouldn’t mind working as a senior accountant during my entire career, but job security would become a worry)? And how much would I make without Big 4 and CPA?
And I’m going to try to get my CPA, but I’m assuming what would happen if I don’t get it (because not everything in life works out). My question is how my job prospects/security and salary would be w/o the CPA?
Your salary will depend on your area of expertise, what firm you choose to work for, and other factors that we can’t know. There’s no red line that says that non-CPAs can only make $X or that Big Four experience guarantees a premium. I went non-Big Four out of undergrad and I ended up with a higher starting salary than some of my friends who did wind up at KPMG or Deloitte partly because we were working in different areas (I lived in an area with a much higher cost of living) and partly because I was going into a profitable practice that my firm was pouring money into trying to develop. Big Four experience is great, don’t get me wrong, but whoever told you that not starting at Big Four limits you to $50K salary for the rest of your life was over-generalizing.
As far as job security, in my experience that’s not really been a huge factor. The issue may be more with job mobility than with job security. A CPA can work in any accounting or finance-related position (or rather, they’re not automatically barred from any such positions for that). A non-CPA may or may not be eligible for certain positions at many firms. Most professional services firms are addicted to certifications and licenses for bidding practices so when you have a CPA it makes you more somewhat valuable as an employee solely because it helps the firm win more work.
Others may have had different experiences, but in my experience if a firm hires you knowing that you don’t plan to get your CPA license then they’re not going to get automatically canned at age 30. It’s definitely not ideal, but it’s not instantly fatal.
It is not that you can’t succeed or get to a certain income plateau, it is mostly that it is just harder to predict. If you end up in a good company that likes you and your work you can move up the ranks and do well. A CPA is not necessary for private companies But for job hunting and possibly some promotions you could find yourself up against candidates with CPAs and the lack of the credential could limit your options. I agree with the suggestion of trying to get certified.
You’re looking for the easy way. 35 years later, I can tell you there is nothing easy about accounting.
Rewarding, challenging, frustrating…but never easy.
The CPA exam is the price of admission. Do that or expect to be an employee the rest of your life; probably with a government agency. Yes, the pay will cap out fairly quickly unless you become specialized (and what’s easy about that?)
You guys are making it seem like an accounting degree is useless without the CPA. I’m having a hard time believing your pay would cap out at $50k per year if you don’t have those three letters after your name. Keep in mind that only 660,000 people in the US are CPAs, and over 50% of accountants don’t even have CPAs. I’m sure those accountants are doing just fine. And the average salary for an accountant in Houston was $71,850, quite a bit higher than the $50,000 stated. My brother doesn’t even have his CPA yet, and makes $80k in NYC after working 3 years at a public firm. Is the CPA required to succeed in the field? Not necessarily. But I highly recommend getting the CPA. Those three letters after your name will open many doors for you.
@rednecktiger I’m curious, what was the ‘frustrating’ part about your accounting career and what challenges did you face?
@mike0910 I don’t think anyone is saying an accounting degree is useless without a CPA. They are just saying the difference in opportunity between having one and not having one is tremendous so the OP really should invest in obtaining it if possible. Furthermore, we also have to consider where the OP lives because the cost of living varies greatly from place to place so for example if he lives in Georgia, that average salary would be translatable to $60k which based on your other data could mean CPAs make average of $70k and non-CPAs make $50k. It’s just impossible to know with such undetailed data. Furthermore, that $80k salary in NYC is translatable to $46k salary in Georgia. ([Cost of Living](Cost of Living Comparison Between New York, NY, United States And Atlanta, GA, United States))
As for the OP, I think he plans to obtain a CPA but he’s questioning if for some reason he is unable to pass (which 50% of test-takers do) will he be screwed similar to how people who can’t pass the bar exam with a law degree.
You say you would be happy being a senior accountant for your entire career. If so, you may be able to get by without the CPA. I think the evidence shows most people have several CAREERS over a lifetime let alone jobs. CPA exams aren’t something that work out. You study for them and pass them.
As for Big Four- you asked someone who works in Big Four. I worked there and when I did, their mindset was very much the world is flat and when you leave there, life is very dire. Leaving meant you failed. Remember most people in Audit and Tax in Big Four are hired there out of college and have worked nowhere else.