How Much Do Accountants Earn?
Accounting is a very important aspect of running a business of any size and has historically been considered a good career choice for people who are good at mathematics and have a fine eye for detail. Many people, however, are unsure of just how much the average accountant makes in any given year. Understanding the earnings potential of an accountant may be the determining factor in many people's career decisions.
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Function
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An accountant ensures that businesses are run efficiently and can suggest ways to improve profits or areas in which to make cuts to maintain profitability. Additionally, accountants also serve individuals in managing their wealth and investments, as well as assisting local, state and federal governments in maintaining budgets or uncovering fraud. According to the Bureau of Labor Statistics' Occupational Outlook Handbook for the 2007 to 2008 year, accountants can expect to earn between $42,520 and $71,960 yearly; the range of salaries is determined by many factors such as place of employment, nature of work and amount of accounting experience.
Types
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One of the most common types of accountants are those who work for a governmental agency. Local, state and federal governments employ accountants to track contract bids, expenditures, income (usually in the form of taxes) and occasionally auditing private businesses. Additionally, these accountants also must ensure that all funds paid or received are in compliance with a complex network of local, state and federal laws. Most of the government-employed accountants work in the various taxation departments with Federally-employed accountants often working for the Internal Revenue Service (IRS). Working for the federal government, a starting accountant with minimal education may expect to begin well below the national average with a yearly salary of $28,862. More experienced and educated accountants, for example those who have Masters' degrees, may expect to earn more than $43,000 a year. Those who have many years of experience and extensive training can earn up to $78,655 a year.
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Considerations
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Choice of employer is a serious factor in considering a career as an accountant. For example, those employed by state agencies usually earned the least of all those surveyed by the Bureau of Labor Statistics, averaging about $47,000 a year. Local government accountants earned slightly more than their state counterparts, averaging $50,120. On the other hand, those who worked in the private sector, such as for management companies, could expect to average $55,560 a year. The best paid accountants, overall, worked for accounting or tax preparation companies, and averaged $57,020 for 2006. For more information, see Resources, below.
Benefits
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Those who go on to attain Masters' degrees can expect to benefit from their increased education. In 2006 an accountant with a Masters' Degree could expect to begin their career earning slightly over $49,000 a year; almost $7,000 a year more than the minimum national average range. Level of education has a considerable benefit in terms of promotions as well, according to a survey conducted by Robert Half International. In lieu of education, accountants who had multiple years of experience in their position could also expect to benefit from their labors through promotions, but may be handicapped somewhat compared to someone with more education.
Geography
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Where an accountant is employed is another factor in deciding the amount of earnings they can expect. In states or regions where the cost of living is below that of the national average, accountants can expect to earn less than the national average described in the Bureau of Labor Statistics' report. Conversely, those employed in high cost-of-living areas can expect significantly more pay. The trade-off on either end of the spectrum is the overall cost of rent or mortgage, transportations, food, clothing, utilities and other expenses which may lead to comparable living standards. Still, in a nation-wide average, the top 1% of accountants earned around $94,050 a year and the most well-qualified of those accountants earned upwards of $208,000 a year regardless of location.
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