According to Tulane University, over 300,000 accountants have left their jobs while the number of students entering college to study accounting is declining and the Bureau of Labor and Statistics (BLS) is forecasting a 6% increase in job demand for the accounting profession.
What do these conflicting numbers mean for people currently in the accounting and tax profession and what does it mean for students considering going to college for accounting?
We dive into some of the considerations that you should consider about the career field of accounting. First we’ll start with the most important topic, how much does it pay?
How much do Accountants Make?
The amount accountants make can vary greatly depending on years of experience, profession, and niche. A staff accountant fresh out of college with a bachelors degree can expect to make $60,00 to $80,000. A lot will depend on the size of the employer and type of work being done. Big 4 audit firms and large corporations will generally pay higher than smaller locally owned businesses.
Other parts of the profession, such as a Payroll Specialist, Accounts Payable Clerk, Accounts Receivable Clerk may earn significantly less while a CFO, Treasury Manger or Corporate Controller could expect to earn significantly more and easily clear a 6 figure income.
How does Accountant Pay Compare to Other Professions?
The median income for Accountants comes in middle of the pack when compared to other professions that require a 4 year bachelors degree. More technical science fields tend to pay more, such as Biologists, and Mechanical Engineers. Creative fields such as Communications and Graphic Design tend to pay less, but can also have significant upside as a freelancer.
The following table lists out some common professions along with the required college degree and 2023 median income.
What do Accountants Do all Day?
The stereotypical accountant spends most of their day staring at a couple of computer monitors full of Microsoft Excel Spreadsheets. While there is some truth to this, and we have definitely spent our share of time looking over spreadsheets, an accountant’s job is actually quite varied.
In an average day a corporate accountant or financial analyst could be asked to assist in preparing reports for C-Suite level Executives, perform ad hoc data analysis, act as a trusted advisor and numbers expert to other departments, as well as communicate financial results and work on various reporting or process improvement projects.
If it sounds like a lot, it’s because it is. The accounting skill set goes well beyond debits and credits. They are often experts in communication, financial data, and everything in between.
Large Fortune 500 companies may employee thousands of accountants accross the globe. In these scenarios, jobs are more narrowly defined. There is less variety, and people are expected to be experts in a specific area.
Accountants working at smaller companies are typically expected to know a little bit about a lot. Some will also expect their accounting staff, or CFO to assist in HR, Payroll, Treasury Management, IT, or other semi-related and unrelated areas.
Trends Changing the Accounting Profession
The accounting profession of five years ago is not the same as it is today, and it will look radically different by the time someone considering a career in the field today graduates college and starts their first job.
These are some of the macro trends that we see impacting the accounting profession today, and will drive a change in the overall profession.
The increasing use of technology: Technology is changing the way that accountants work. Accounting software is making it easier for accountants to automate tasks and produce reports. Artificial intelligence (AI) is being used to develop new tools that can help accountants with tasks such as data analysis and fraud detection.
The growing importance of data analytics: Data analytics is becoming increasingly important for businesses and the accounting profession. Companies are constantly collecting increasing amounts of transactional data, and accountants are expected to be a trusted advisor. Accountants increasingly use data analytics and machine learning techniques to identify trends, make predictions, and improve decision-making.
The need for specialized skills: The accounting profession is becoming more specialized. Accountants who want to be successful will need to develop specialized skills in areas such as tax planning, financial analysis, communication, consulting, data analysis, and business intelligence.
The changing regulatory environment: The regulatory environment is constantly changing. Accountants will need to stay up-to-date on changes in regulations in order to provide accurate and compliant advice to their clients. Reporting requirements are moving beyond audited financials to include Environmental, Social, and Governance (ESG) reporting.
Do Accountants Work Long Hours?
Yes, sometimes accountants are required to work long hours. This is especially true at the beginning of each month when they’re closing the books, but times are changing.
The labor shortages of recent years have shifted some bargaining power from corporates back to workers. This means that people have been able to achieve higher pay raises than they historically have, and that companies are less able to require workers to work long exhausting hours.
While there’s no guarantee that you’ll never have to work over 40 hours a week and things vary time to time, and company to company, the overall trend is to make it easier to have a better work-life balance.
We’re optimistic that productivity gains brought by advances in AI and Accounting Technology will also reduce the amount of hours are required to complete the same tasks. At the same time we’re reminded that economists and futurists have been predicting that great productivity gains will reduce the amount of time people need to work, but as Americans we constantly find new ways to fill our times with creative new work tasks.
What Does the Future of Accounting Look Like?
Accounting will become more intertwined with data analysis, business intelligence and computer science.
The traditional role of accounting will still exist. Most of accounting curriculum in college is based around teaching people how debits and credits flow into general ledgers and trial balances. Also how accountants will learn how transactions roll up to income statements, balance sheets, and cash flow statements.
Each one of these steps may have a level of nuance on what the appropriate treatment is to accurately record the economic impact of various transactions. Judgement will be required to interpret and understand what your organization is most comfortable on the risk spectrum when there is ambiguity.
That being said, the foundation of knowledge will be applied to different disciplines. For example, a data analyst might build out an AI powered time series forecast model to predict what next year’s sales will be. The model based on previous year’s sales data will require a depth of understanding of the accounting treatment for revenue recognition. In scenarios like these the blending of financial and data analysis knowledge will become more valuable when used together.
Will AI Replace Accountants?
AI will definitely displace some accounting jobs. Transactional account jobs that reply on processing documents like accounts receivable and accounts payable are most at risk. Technologies like Robotic Process Automation (RPA) and Optical Character Recognition (OCR) mostly make this a reality today, it’s just a matter of time until it is more widely addopted.
Emerging technologies such as Chat GPT and Google Bard will be integrated into most software applications over the next several years. This will have a couple of large impacts on the accounting profession.
Chat GPT Will Answer Financial Questions: Microsoft is integrating Chat GPT in Microsoft Excel, Microsoft Power BI and will be fed information from data stored on SharePoint and Azure. This will enable the average person to ask questions about their data and receive insightful answers without having to engage with the accounting department.
Technical Challenges Will Become Less Technical: A huge bottleneck in most organizations is the lack of technical personnel compared to the number of others that require their services. In today’s world if you need to connect to a central database or need help automating a system, your request is prioritized with a number of others and you may or may not receive the assistance that you require in a timely manner.
In the future, software solutions will become much easier to implement and most integration and advanced analytics tasks will not require advanced technical capabilities. This means that accountants will have the contextual knowledge to understand the base data and will have enough technical skills to implement advanced solutions and process improvements on their own.
Should You Become an Accountant?
Yes, the future for accounting is bright. While some lower level jobs are at risk of being automated, we see accounting as a profession that will continue to grow. It’s a great middle ground where accounting can be a platform to take a fundamental understanding of financial data and apply other disciplines like data analysis or business intelligence to it.
While technological changes like Chat GPT and Generative AI will make it easier to apply advanced analytics and machine learning techniques to the data that the accountant is well positioned to understand.
Conclusion
In an environment where the BLS predicts continued demand growth of the accounting profession, and less people entering it, we should expect continued wage growth. At the same time technologies like Chat GPT and Large Language Models (LLM) will make it easier to answer basic questions about financial data, it will also make it easier for accountants to flex their skills into other areas.
Accountants have proven themselves as a resilient bunch able to handle anything from HR, Payroll, Data Analysis, Business Intelligence, and Data Analytics they will be able to adapt to change better than most. At the same time, they will have an edge of understanding financial data at a deeper level than most of their peers.
Technological change will eliminate some jobs and create new ones at the same time. When AI becomes the middle layer between source data and reporting who will audit the AI?