Ready to make the switch from public accounting to private? Public accounting is a great way to start your accounting career, but after a few years, the long hours and high-stress work environment start to get to you. This is why it’s no surprise accountants commonly transition from public to industry accounting positions. While public accounting offers exposure to opportunities to work with an array of corporate clients, private accounting is often focused on one company in a single industry. Although both are accounting fields, the two career paths require different skills for success.
For accountants looking to make a career move, we’ll discuss our top tips for successfully transitioning from public to industry accounting.
1/ Creating Budgets
In public accounting, employees often analyze other companies’ financial statements and records either when performing audits or preparing tax returns. The focus is on assessing external party performance and compliance. In the private industry, accountants’ focus is on internal accounting and strategy. Job responsibilities in private accounting often include creating budgets for the company. Since this is not something commonly expected in public accounting, it is a skill that those making the switch will need to develop for success in a new role.
A fundamental skill in creating budgets is understanding the organization’s goals and how to get the company’s financials aligned with them. While in public accounting, a lot of the work is reviewing what happened in the past, in private industry, you will need to develop a more forward-looking mindset. From there, you’ll need to learn how to project financial statements for the company. Estimating financials requires a deep understanding of how the organization operates and generates revenue and a broader knowledge of the industry market. You’ll need to learn how to do this kind of research and can apply your public accounting skills to create the budget from there.
2/ Learning New Technology
Changing from public to private accounting means learning new accounting software. Public accountants are used to working with software specialized for audit or tax work. One kind of software you will need to learn that you may not have been exposed to in public accounting is enterprise resource planning (ERP) systems. ERP systems track different business departments and processes and integrate them into a central place for accounting and financial reporting. Industry accountants use ERP systems to manage accounts receivable, forecast revenue, and estimate capital requirements. There are even programs that are industry-specific for more enhanced functionality. It is a common software many businesses use that you will no doubt need to learn how to use in private industry.
3/ Cross-Department Collaboration & Working on Smaller Teams
In public accounting, accountants regularly communicate with clients and their immediate team members. In private accounting, the parties you most often communicate with are leaders from other departments. Collaboration with other departments in your organization is essential to creating budgets and managing costs and project revenue. You need to understand the needs and goals of each department to do your job successfully, and the best way to obtain this information is by asking the leaders of each department. Department heads are often not financial professionals. They can be operation managers, lawyers, engineers, or IT personnel. Accountants must be able to communicate financial information in a way that non-financial professionals can understand to get the information they need from them. You’ll want to develop a rapport with these stakeholders, so you have an easier time requesting the information you need.
Additionally, in public accounting, you are often assigned to teams that may have a few managers and colleagues in similar roles to yours. In private industry, you may find that you are working on smaller teams with only one supervisor. You’ll need to learn how to get the answers you need on your own without the support of a larger team.
4/ Financial Modeling
Another skill that you will need to develop when you move to private industry is mastering financial modeling. This skill plays off the skills you will need to develop for budgeting. Since public accounting responsibilities are often retrospective- reviewing historical data, financial modeling is not usually something public accountants know how to do. Financial modeling requires more advanced Excel skills. Even though you definitely used Excel in your public accounting role, you should consider brushing up on the functions and formulas used to create financial models.
You must also learn how to formulate assumptions to create realistic projections. Similar to budgeting, this involves researching your organization’s goals for growth and understanding the industry trends so you can make predictions regarding your company’s financial statements for the coming years.
5/ Broader Accounting Knowledge
In public accounting, your responsibilities often focus on applying a specific set of accounting knowledge. If you work in audit, you are well-versed in GAAP, and if you work in tax, you know a lot about tax laws. However, in private industry, your responsibilities may not be so focused and you may need to apply accounting knowledge you haven’t used since school. Before making a career change, review role responsibilities for positions in industries you are interested in and take the time to refresh your accounting knowledge so you can find success in your new role.
On that note;
Whether you want a better work-life balance or a chance to broaden your skills, switching from public accounting to private industry presents an exciting career opportunity for many accountants. However, the two fields require different skills that accountants looking to make the switch need to understand and develop to succeed in their new role. Before moving to private industry, review the skills you need for your new position.
