What Is The Difference Between An Accountant And A CPA?
What’s the difference between a job and a career?
You can get stuck at a job, but you grow with the right career. It has to be the right career, though. Otherwise, you’ll just wind up jumping ship or wishing you could!
If you’re good with numbers and love a challenge, then a career in finance could be the right move. A couple of the most profitable career choices include accountants and CPAs. While the 2 positions have a lot of similarities, they’re also vastly different.
What is the difference between an accountant and a CPA? We put together this short but detailed post to help you decide which finance role is proper for you. We’ll show you what each career path offers, along with some of the best tips for getting there!
Is it worth it to become a certified public accountant? Or should you jump right in with an accounting degree? Read on to find out what career choice suits you the best.
What Is the Difference Between an Accountant and a CPA?
Every CPA is an accountant. Not every accountant is a CPA. So what’s the big difference?
You can think of a CPA as a more qualified expert performing accounting duties. They’re an individual that the government recognizes as credible and reliable. Anyone with a CPA designation has training in the best accounting principles. They’re also likely comfortable using online tools.
As a result, CPAs are better paid than accountants. CPA stands for a certified public accountant, and the certification gives you special abilities. You’ll be able to perform essential duties that regular accountants aren’t legally allowed to handle.
For instance, a CPA can prepare a complete audited financial statement or represent a company when working with theirs. If you’re just an accountant, you won’t be able to carry out any of those job tasks.
How Much Do CPAs Make?
What is the difference between an accountant and a CPA regarding salary? To put it simply, CPAs make a lot more money. What you earn as a CPA depends on where you live and how much experience you have.
Another thing to consider is the industry that you’re getting into. Small companies, like family-owned gas stations, aren’t going to spend a lot on CPA services. Whereas, a large corporation will.
You can expect to earn around $50,000 as a CPA starting off. If you only have an accounting degree and not a CPA certification, you’ll likely start off closer to $30,000 a year. That’s almost double the salary, even though you’re still entry-level.
Your annual salary will increase as you gain experience in the field. In-demand CPAs can easily earn 6 figures or more, primarily when they work for a growing company.
Accounting Degree and CPA Requirements
Do you already have an accounting degree? Great! However, not every state requires you to hold an accounting degree to get your CPA license.
Instead, most states simply require you to have 150 college credit hours from an accredited university. The credit hours could be for a business degree specializing in accounting or some other finance-related field.
After earning your bachelor’s degree, you’ll have to complete on-the-job experience requirements. Many states require at least 2 years of working out in the field before you can sit for your CPA exam.
You can check out these resume-building tips to help boost your chances of landing a good internship. The first place you work really sets the tone for the rest of your CPA career, so choose wisely.
How Long Does It Take To Become a CPA vs an Accountant?
If it’s your goal to become a CPA, it will take about 7 years. If it’s your goal to become an accountant, you can accomplish it within 2 to 4 years.
As an accountant, you don’t need to sit for a state-issued exam. Instead, you just need to prove that you can handle the accounting responsibilities and find a company to hire you.
Types of Accountant Positions
If you’re interested in becoming an accountant or CPA, you should consider other roles in the financial field. For instance, you might enjoy becoming a bookkeeper.
A bookkeeper is somebody who handles the day-to-day finances of a company. You’ll do things like run payroll, manage accounts receivable, and reconcile accounts.
You could also look into becoming a tax preparer like taxfyle pros. You don’t need to have any type of college education to become a tax preparer; you’ll just need some training. The best part is, you’ll be in demand during the busy season as taxpayers rush to get in their returns.
CPA Exam Sections
When you sit for the CPA exam, there are f4 different sections that you’ll have to pass. The 4 sections must be given within a rolling period of 18 months. Each individual unit is about 4 hours long.
Here are the 4different sections of the exam:
1. Auditing and attestation
2. Financial accounting and reporting
4. Business environment and concepts
Auditing and attestation cover all of the assurance and auditing services you’ll provide in public accounting. Financial accounting and reporting cover different topics about preparing financial statements and how to accurately report taxes to the IRS.
The regulation section doesn’t explicitly cover topics about accounting. Instead, the REG section is about business law, ethics, and individual taxation.
Finally, business environment and concepts will cover micro and macroeconomics, management, information systems, and cost accounting. You get to decide what order you take each exam section.
Start Your Career
The next time you hear somebody wondering, “what is the difference between an accountant and a CPA?”, you’ll already know the answer. An accountant is a more advanced role than being a bookkeeper or tax preparer.
If you want to be an expert in your field, we suggest embarking on the journey to become a CPA. While it does take 7 years, the payoff is well worth the wait.
You’ll be able to start making more money, and you’ll have a lot more growth opportunities. For more tips like these, see what the rest of our website has for you.