You could say that a CPA (Certified Public Accountant) is a notch above a regular accountant; they went through an intense exam and requirements in order to receive their certification. They also have more job responsibilities, and one of their main job tasks is consulting. In addition, they receive jobs that are more upper-level positions. Consequently, a CPA’s salary is higher than an accountant’s salary.

Average Salary

The average salary for a CPA is around $45,000 as a starting salary, which is about 10% higher than other accountants who have similar positions. There are several factors that affect what a CPA earns annually, such as experience in the field, as well as location.

Experience

Experience is a factor that affects just about every type of job, especially in jobs where you must learn certain skills, like in accounting. When you want to be CPA certified, you must have at least one year of public accounting experience. This year or so will be the lowest amount of money that you will ever earn. As soon as you become CPA certified, your salary increases. In addition, you can apply for upper-level jobs that only CPAs are eligible to receive. These positions are higher in position and salary than entry-level jobs that accountants have.

Location

The second largest factor is location. This refers to both geographic location, and the type of company you are working for. As far as geographic location, cities with a higher cost of living will pay you a higher salary so you are able to live in such an expensive area. In these cities, everything is higher, from gas, to rent, to food.

The type of company that you work for also has a lot to do with how much money you make. A bigger and more well-known company will pay you more because they have more resources in able to do so. If you work for a smaller company, then the money may not be there in order to pay what you deserve. These are some things to think about when applying for jobs that could pay you the highest salary possible by utilizing your CPA certification.

CPA vs. Accountant

A CPA is a Certified Public Accountant. They have more job responsibilities than un-certified accountants and they also get more pay. In addition, their careers have more opportunities for growth; accountants without certification are more limited to entry-level positions. The two types of accountants are separated by requirements and exams that CPAs go through in order to be certified.

While most accounting jobs do not require a CPA, most upper-level positions do require this certification. In addition, base salary is often around 10% higher for CPAs than accountants. One major job task that accountants tackle is that of preparing tax returns for businesses and individuals. The IRS is making the requirements to practice paid tax return preparation more strict by making accountants take classes. However, CPAs are exempt from these new policies.

Requirements

CPA certification involves taking the Uniform CPA exam that is administered by the American Institute of CPAs. Requirements for the exam vary by state, so it is very important to check the requirements for your individual state. Although the prerequisites are different, some of their basic requirements are the same:

1) Bachelor’s Degree

No matter what state, having a bachelor’s degree in accounting or a similar field is required to have. What differs in each state is how many credit hours is needed in different subjects like accounting, finance, and business.

2) Experience

All states demand at least one year of public accounting experience. Some states may want just one year, and other states want at least two years.

3) Tier-System

This is not necessarily a requirement, but more so an FYI. Each state has either a one-tier or two-tier system. A one-tier system involves passing the CPA exam while you have experience, and once the exam is passed, then you receive both the certification as well as the license. The two-tier system involves first passing the CPA exam, and then fulfilling the experience requirements, followed by receiving the license.

4) 150 credit hours

40 states have currently adopted the 150-credit hour requirement as opposed to just a bachelor’s degree. 150 hours covers more of the up-to-date information and laws in subjects like accounting, finance, and general business. Check with your state’s laws to see if you need to take 150 hours.

5) The Exam

The exam is administered in: January, February, April, May, July, August, October, and November, and these are called “testing windows.” You must apply to take the exam, and if you have met the requirements from your state, then you will receive a NTS (Notice to Schedule). This NTS is needed to schedule the exam. Once the exam is scheduled, then it is time to take the exam and receive your certification to begin your career as a CPA.

With all of those acronyms out there, we’re pretty sure that you’ve come up with your own meanings to some of them. It seems like every job out there requires you to learn a whole bunch of acronyms, either for getting a certification for the specific job, or shortening the job title. If you’ve been looking into the accounting industry for a future career, you may be asking yourself: “What is a CPA?”

A CPA is another one of those acronyms, and it stands for Certified Public Accountant. Now, not all accountants are CPAs. CPAs must take a series of difficult tests in order to be considered certified. These tests involve an in-depth understanding of accounting principles and other information regarding accounting.

The whole point of having a certification instead of being just a regular accountant is that you get paid more, and you also have more job responsibility. Without a certification, then you are limited to only getting jobs that are entry-level and it will be difficult for you to get a higher-level job.

CPAs have many different job tasks, with one of the biggest ones being a consultant for individuals, corporations, or other businesses. Being a consultant involves creating a financial plan for their clients in order to save them money and make good financial investments and decisions. They also must think of ways for their clients to look attractive to other businesses that want to invest in them.

In addition to consulting, CPAs also do basic accounting tasks, like tax preparation, record keeping, and auditing. They balance many clients with all of these job tasks. One of the most common tasks for a CPA to do is preparing tax returns for individuals and businesses. Though, the IRS is becoming more stringent with requirements for paid tax preparation; accountants must take a series of courses prior to being eligible to prepare taxes. However, if you’re a CPA, you’re exempt from these requirements.