Young accountants: Choose your own adventure

Young accountants have never had so many options.

Historically, being an accountant often involved little personal agency — most young accountants followed the career path laid before them by their firm, and that path looked much the same from firm to firm. But now with advancing technology propelling the profession forward, new service lines multiplying almost daily, and a labor shortage putting young talent in high demand, new career pathways and opportunities are opening.

The decisions start with picking a firm size and focus area, and continue throughout the career, from committing to the partner path, to going corporate or staying in public accounting, or even starting their own practices. Experts say young accountants should navigate this evolving profession by continually reevaluating their path with an open mind.

Picking a firm 

As firms start shifting their recruiting focus to younger students, sometimes even extending internship offers to college sophomores, students have to choose a firm earlier than ever before. The most obvious factor to consider is firm size.

There are benefits and downsides to each. At small firms, young accountants can become jacks of all trades, have more opportunities to demonstrate entrepreneurship and the opportunity to work with clients faster. Meanwhile, big firms offer prestige, specialization, big-name clients, the opportunity to travel and connections. Many students choose the latter route and aim for one of the Big Four: Deloitte, PricewaterhouseCoopers, Ernst & Young or KPMG.

Jeff Phillips, CEO at Padgett Business Services and cofounder of recruiting firm Accountingfly, thinks the narrative that students receive in school too often skims over the benefits of working in small and midsized firms. 

"Don't buy into the myth that you must start your career at the Big Four," he said. "They are excellent companies, but there are awesome firms in the Top 200. There are awesome local firms."

The stereotype is a young accountant starts working in a big firm, grows tired of the grueling hours, and eventually leaves for the work-life balance of a small firm. Of course, in the same way that some students prefer the community and culture of a small college versus a big state school, some accountants will fare better going directly to a small firm.

But some experts warn that starting in a small firm may limit career mobility down the line. 

"It's always easier to go from big to small. It's harder to go from smaller to big," said Stan Veliotis, associate professor at Fordham University. "Both are possible, but it's easier in one direction versus the other."

He said that students risk giving the impression to future employers that they couldn't get an offer from the big firms — not that they didn't want to work there.

But Douglas Slaybaugh, a CPA career coach, disagreed: "I've seen it go both ways. I've got a client right now that's moving from a smaller firm to a big firm. And there is such a need for resources in the industry right now that if that was ever a thing, it's less of a thing now."

Choosing a focus area

It's difficult choosing a focus area — between tax, audit and accounting, or one of the new possibilities that are cropping — before having actually worked in a firm. Many students may feel they're sealing their fates with the choice, but the reality is that they can always switch down the line. The best course of action is to just jump. 

"Don't worry too much about a focus area," Veliotis said. "As long as you have some interest in it, take it, and then you will see over time what you gravitate towards."

Slaybaugh encourages students to use internships and firm college programs to get a taste of the profession. "Start early and try lots of things," he said. "You have to start, but you're never stuck."

How long to stay

The next question is how long to stay at your first firm. Traditionally, an accountant's entire career would play out within a single firm — joining as an intern and climbing the ranks until they make partner. 

Today, Veliotis says it's easier for young accountants to leave their firm now that applying for a job can be as easy as clicking a button online. In the past, joining a new firm meant being headhunted or actually running from office to office looking. He recommends staying at least one year in a firm — ideally several years, but never less than one. 

"One year is a magical number," Veliotis said. "In accounting, almost all the disciplines in the accounting firms, all the client engagements, are cyclical, meaning every year, the year finishes and now you have to prepare the tax return, or now you have to prepare the audit or the financial statements. So if a person leaves within a year, it almost looks like something blew up or they couldn't handle the second cycle."

Remember, Veliotis said, firms are always taking a risk on young talent — they don't know how much you know out of college. That's why it's important to at least get the first promotion.

From there on, Phillips suggests that accountants reassess their career every three to four years.

"As long as they're pretty happy with the firm, stay until they're around a manager level. Your options expand exponentially the longer you stay at that first employer," he said. "As someone with a recruiting background, we don't like to see candidates who have changed jobs every 18 months — we just feel like you're going to change jobs in 18 months on us. So I think there's a lot of wisdom in sticking something out for a chunk of time to learn how to exist in a firm."

Slaybaugh thinks accountants should be reassessing more frequently: "Every year, once a year, you should decide whether you're going to stay in the job you're in or not. What that does is it removes plan continuation bias, in that we decide we're going to be accountants based on the circumstances in which we made the decision. Well, times change. Circumstances change."

Getting your CPA

Most experts agree that getting licensed as a CPA is still important. It provides more career mobility and is a symbol of trust and reliability. But do you really need your CPA? 

Slaybaugh says it "depends on the day." Some non-audit managers and partners don't have their CPA, so it's certainly possible to get promoted without it. 

"The importance of it still exists. It's still an important aspect of our society to be able to have that trust in the profession," Slaybaugh said. He added that getting an MBA plus a CPA can help you become a CFO. 

Committing to the partner path

The path to partner, which takes 10 to 20 years on average, is daunting. Luckily, even if an accountant jumps ship before they make partner, at least they've gained highly-sought-after experience.

"If you work until you're about to become a partner and you decide that's not for you, you have many options available to you, because every company in the world wants to hire somebody with that skillset," Phillips said.

Experts also recommend interviewing your partners to investigate if the career is right for you. What would they do differently? What do they like and dislike about being a partner? What is the lifestyle like? What are the hours like? 

Slaybaugh says if the partner path is for you, you should be yourself from the beginning. For example, don't pretend you enjoy a niche more than you do, or commit to more hours than you're actually willing to. 

"It's best to have consistency. Be yourself," Slaybaugh said. "This has nothing to do with developing as a professional or becoming a better leader; this is about not doing things that are against your core values or that don't resonate with your core values."

Going corporate

It's common for accountants to make the move from public accounting to corporate or industry accounting. Often they enter the industry their clients were in, Veliotis said. 

"When you make the jump from an accounting firm—where you have a lot of diversified experiences, you're learning about best practices, you have the stress of client delivery—and you go in-house, you're very, very powerful on a resume because you know the area," Veliotis said. "You proved yourself in the most stressful environment there is, which is serving many clients. And then you go to one company, in essence, you just have the one client."

For those aiming to be a CFO, Slaybaugh recommends staying longer in public accounting to gain more experience. He also noted that you'll likely experience an immediate pay bump going corporate, but said the salary will eventually be outpaced by what you could've made as a partner. 

Joining up

Joining professional associations, like the American Institute of CPAs, the National Conference of CPA Practitioners or the National Association of Black Accountants, or state CPA societies, can be an excellent way to practice networking and communication skills. (Communication is an underestimated skill in the accounting profession.)

But while many of these organizations offer virtual meetings, Veliotis encourages young people to go in person for the full benefits and resources.

Owning your own firm

For some accountants, starting your own practice may be the dream, but no one actually teaches how to start a firm.

"If you're entrepreneurial, the skillsets you're going to need are that technical knowledge that you probably will not learn in college — you will probably learn working inside of a company," Phillips said. 

The most important soft skills for running a successful firm are a high degree of responsibility and ownership. "It starts and ends with you," Phillips said. 

It's a great time to start an accounting firm, he added. Demand for services is growing, the economy is growing, there are more niches than ever, and firms that are scaling and shaking loose clients can be grabbed by an entrepreneur. 

If you learned nothing else

What remains true for all young accountants — no matter what path they find themselves on, whether they become partners or quit their firms to start their own practices — the most important thing is remaining proactive about making their own choices because the profession will no longer do it for them.

Reprinted from Accounting Today article