There comes a time in the life of most public accountants when they think about transitioning from public accounting to industry. In this article we are going to briefly touch on the difference between public accounting and industry and what to think about when considering making the move.
Public Accounting vs. Industry
If you already work in finance or accounting you probably already know the difference between Public Accounting and Industry (also sometimes called corporate accounting, private accounting, or managerial accounting). But let’s do a quick explanation.
Working Public Accounting is working at a firm who provides accounting services to companies. Typically, in public accounting, accountants will work for the Big 4 (KPMG, PWC, Deloitte, or E&Y), some other national firm, or a regional or local firm. These jobs cut across all different areas, audit, tax, advisory, and more. You will most likely be required to have a CPA to work in a Big 4 company.
Jobs in Public Accounting, especially the Big 4, are known to be a grind. They are long hours and sometimes mind-numbing work, but there is a fast career progression to management levels and a big payoff for those that make it to partner. Public Accounting positions have great exit opportunities into industry.
Industry / Private / Managerial Accounting
Accounting jobs in industry is a very broad category. These are jobs working in the finance or accounting department of companies of all different sizes from Amazon or Google down to small companies who are run by a solo accountant, and everything in between! The work content varies greatly but it spans from cost accountant to to Chief Financial Officer
Because “industry” has so much breadth, there are a variety of different salaries, work/life balances, and responsibilities. Sometimes a CPA is required for these positions but more often it is preferred, but not required.
Comparing Public vs. Private
Public Accounting offers a great early trajectory for an accountant. There is a defined path at most firms to progress through promotions and get pay raises (something like staff > senior > manager > senior manager > partner). Most firms are competitive and require a lot of hours, but that compounds the learning process and forces your development along. The problem in public accounting is that somewhere along the way it can become difficult or political to continue to be promoted
Industry is a less defined path in the early years and can be sometimes difficult to differentiate yourself and there isn’t the same urgency and competition that pulls a young accountant along in their development. However, once an accountant is 5-10 years along in their career, the trajectory can be easier in industry, and often there is much more breadth in the opportunities available.
Work / Life Balance
Public accounting is pretty well known as a grind. There are late nights, busy times, travel, and an endless supply of work.
Industry work/life balance depends on the company and the job. As mentioned, there is tremendous breadth in the types of jobs out there, but generally there is better work / life balance and a more predictable schedule in Industry
Working in public accounting has a relatively defined scheduled pay increases along with promotions and in the early years accelerates compensation faster than industry.
Jobs in industry have a lot of variation, but generally after a few years you can “cash out” into an industry job where you make more money. The big questions is when to do that. Typically the longer you stay in public, the better that “cash out” is.
Who you work for
In public accounting, you have dual allegiances. You work for both your company and a client. However, often people who work in public accounting feel a little like a person with no country. You work for a company that provides a service (and a necessary one) and a client that you temporarily work for… but you don’t really feel changes to the company.
Working in industry you are aligned to company and you often have equity/options in the company which more closely aligns your compensation with how well the company does. What you do can actually have a real impact and you feel the fruits of your labor.
Is it time to leave public accounting?
If you get the itch to leave public accounting, it is important to step back and really think about what you want out of your career and what is important to you.
What do you want? Sit down and ask yourself some questions like:
- What goals do you have for 5 or 10 years in the future? Do you want to be a partner? Do you want to be a Chief Accounting Officer or Chief Financial Officer? Or do you just want to work on interesting things and you don’t care about titles or advancement?
- What type of company do you want to work at? Do you want to work at a non-profit? A giant Fortune 500 company? A company or industry that aligns with something you are interested in or passionate about? Do you like being at a service provider and essentially consulting? Or do you want to work in a business?
- What type of work do you want to do? Tax? Audit? Advisory? M&A? Controller? Or do you want to switch into more of a corporate finance or FP&A type of position?
- What type of flexibility do you need? Do you want to work remote or in-person? Do you want a hybrid arrangement? How much travel do you want to do?
- What about work / life balance and your personal life? Do you want more time for yourself to explore interests or hobbies? Do you want to move around or stay in one place? How many hours per day or per week are you willing to work? Are you okay with working late nights? Are you planning to start a family?
Write these down and spend some time thinking about it.
The case for leaving public accounting
In general, people are pretty happy when moving form public to industry. But that said, most of those people wouldn’t get to where they wanted to go if they didn’t start in public accounting. Public accounting is perhaps the best way to build up a solid accounting foundation and position yourself for big roles and a nice salary. Here are the biggest reasons to consider a switch
- Diversity of job options … There are jobs in accounting, controllership, fp&a, business development / corporate development, internal audit, and much more.
- Compensation … If you play it right, there is usually a pay bump when you leave public accounting
- Work more aligned with a company … you only have one ‘client’ in industry and often your compensation and performance are linked with that company.
- Work / Life balance … in general, there is better quality of life outside of public accounting
Do some homework and get ready
If you decide to leave public accounting, you want to do what you can to make sure the new gig is a good fit.
- Make sure you update your resume and LinkedIn, don’t do this half-heartedly, this is the first impression.
- Start to network with former colleagues, friends, peers, and other contacts in industry
- Take your time and really think about what you want (same as the questions above) in terms of what type of job, company, culture, etc.
- DON’T jump at the first opportunity … however, remember your first move out of public is most likely, not your last. Don’t stress over finding a company that is a ‘forever’ fit. Find something you feel comfortable working at for at least 2-5 years, but not forever.
- You have some real learning to do. The skill set in public accounting is not the same as industry. You will have to understand the operations of the company in more detail, you will need to learn new reporting systems / ERPs / etc, you will be partnering with finance, operations, sales people, and more. You also may need to learn things like financial modeling, budgeting, and more business-oriented skills
In general, public accounting is going to help move your career along faster than industry in the early years and as long as you are getting scheduled promotions. So, from a career perspective, it often makes sense to stay in public accounting as long as you are okay with the grind. However, if you are unhappy in public accounting or if it no longer aligns with what you want out of life or your career, it is probably time to move on. When it is time to make the change, you will need to make sure you sharpen your skills … Let us help!