Public vs private accounting: similarities and differences
By Indeed Editorial Team
Published 1 July 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
A role in accounting typically involves analysing, developing and presenting financial reports, ranging from tax returns to budgets for certain individuals or organisations. Public and private accountants are similar as they aid businesses to operate efficiently by working within a financial framework. Despite this, there are some distinct differences between public and private accountants, and knowing these differences can help keep you informed of what to look for when finding a job. In this article, we explain the differences between the two types of accountants and provide examples of careers to help you with your journey into this field.
Public vs private accounting
Both public and private accounting involve some of the same day-to-day activities and usually have similar job descriptions. The average base salary for an accountant is £34,919. This average base salary can vary depending on factors like location and the type of accountancy you choose to pursue. Below, we give a general overview of public vs private accounting:
Private accountants typically work for a single company, the term private accounting refers to an individual working for a single person or organisation. Private accountants analyse and prepare financial reports internally. Their typical duties involve handling accounts payable and presenting clients with invoices. In the case of the company being audited, a public accounting firm may scrutinise the work of the private accounting department to ensure all practices are to a certain standard. Ultimately, a private accountant answers directly to the company. They create internal systems to record business transactions that can advise a company's financial statements.
Public accounting refers to a business or individual who helps a range of different clients by preparing financial documents; clients, in this case, can include both individuals and corporations. Public accounts are a third party that reviews the financial information of a company for public admission. Other duties include preparing tax returns, audits, consulting services and advising a certain body on taxes.
Related: 13 essential accountant skills
Key differences between public and private accounting
Both public and private accounting are similar, as they both involve the construction of financial statements and reports. Outside of this fundamental similarity, other differences may lead you to a different career path. Below are some of the main differences between these two types of accounting.
Public accounting involves evaluating financial documents for accuracy and fullness before the company makes them available to the public. Their role aims to validate the information provided by their client and provide transparency of their financial activities. Private accounting involves reviewing internal business documents related to their client, and they may also work with financial managers and become involved in budget planning and evaluating financial performance. Further duties for private accountants may include management reporting, including journal entries and account reconciliation.
Education and certifications
Holding a bachelor's degree is desirable but not essential for accounting roles. All accountants need a minimum of an AAT (Association of Accounting Technicians) qualification to operate as an accountant. An AAT qualification consists of multiple components across three levels and provides you with subject knowledge and work skills. The next step for those interested in private accountancy may be the ACCA (Association of Chartered Certified Accountants). The ACCA provides a lot of opportunities for both private and public accountancy and even self-employment. This qualification covers corporate and business law alongside auditing.
Most public accountants start their career in entry-level positions and work their way up the hierarchy to more senior positions, including audit-partner. Similarly, private accountants start with entry-level jobs, with senior positions such as CFO (chief financial officer) being the end goal. Chartership is a viable option for all accountants looking to increase their wages significantly. The most popular Chartership qualification is the CIMA (Chartered Institute of Management Accountants) which is recognised in the UK and overseas.
January is the busiest time of the year, as the deadline for online tax returns is the 31st of the month. Tax season can often affect public accountants more, while private accountants may be busier at the end of a company's financial year. Another variance in the work environment is that public accountants have more unpredictable work environments and timetables. Public accountants may work with various clients, from individuals to corporations or government bodies. There may be a lot of travelling to company locations, which may lead to more time away from home. Private accountants often have set business hours.
Exposure and work experience
Working as a public accountant exposes you to different sectors and situations within the role. You may work for a government agency for one month and then validate a financial system in a private company the next. Private accountancy does not afford this diversity yet can provide you with a stable job in an office environment. It is much more commonplace for an accountant from a public firm to transfer to private work because of the amount of wide experience they have gained.
Public accountants interact with a variety of different clients, so it's important for them to have strong interpersonal and communication skills to use as part of the auditing process. Private accountants need similar levels of interpersonal skills, but the primary focus is interview skills and day-to-day interaction within an office environment. The principal skills for both public and private accountants include organisation, strong numeracy skills, the ability to meet deadlines, integrity and proficiency with the newest technologies.
Below are some job examples within the accounting sector if you are interested in pursuing accountancy as your career. For the most up-to-date salary information, click on the links for the salaries below:
National average salary: £23,256 per year
Primary duties: A bookkeeper is in charge of a company's financial record. They may also receive, document and handle the cash directly from clients. Bookkeepers are responsible for auditing financial records to ensure books remain balanced with no inaccuracies. They also compose reports around financial transactions for executives and others within the company to use and process invoices from outside vendors.
National average salary: £31,578 per year
Primary duties: An auditor employs the use of auditing platforms to analyse a company's financial activities for public disclosure. They monitor claims activities and point out violations of contractual obligations. Auditors work alongside financial managers to guarantee that claims apply within the legal framework and investigate error trends in claims.
National average salary: £34,909 per year
Primary duties: Senior accountants handle the preparation and recording of assets, revenue, expense and liability logs to the general ledger. They conduct account reconciliation reports and analyse all financial statements for errors. They work alongside the Chief Financial Officers and point out issues with the current accounting records and review invoices that require extra work. Senior accountants might also organise audits and activities, such as regular ledger maintenance.
National average salary: £32,268 per year
Primary duties: A payroll specialist works on behalf of the company's employees. Their chief duty is the handling of the paychecks. In addition, they may work alongside human resources departments to supervise employee benefits, retirement funds, private health insurance and holiday leave.
National average salary: £43,233 per year
Primary duties: Project accountants are financial specialists who evaluate project budgets. They work closely alongside project managers and other team members to inform them of current expenditures and estimates. They also prepare invoices and purchase orders and pay third parties involved in the process.
National average salary: £55,405 per year
Primary duties: Financial controllers keep accurate company records by managing accounting functions. This includes creating clear financial reports and forecasts on behalf of stakeholders to aid them in making effective decisions. These professionals may also offer suggestions on how to improve efficiency whilst analysing financial records, which helps companies boost profitability. Financial controllers produce their reports on time and submit them to the bank on a monthly basis.
Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location. Please note that none of the companies mentioned in this article are affiliated with Indeed.
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