A career in accounting promises competitive compensation, consistent job security, and abundant opportunities across the country. Plus, the field of accounting is so vast and varied that anyone with a passion for numbers is certain to find an outlet for their specific interests and professional goals in a variety of areas within the global market including account or business management, financial reporting, working to provide a consultation service, and more to any firm or an individual that needs help with their important assets, personal acounting issues, business valuation, venture capital for a potential acquisition, regular audits, or financial decision making in public/private industry.
One option is to become a capital accountant. These accountants handle crucial financial questions and capital investments, and their expertise is in demand at the world's largest, even international, corporations. A career in capital accounting promises to be personally and professionally rewarding, but it's a difficult peak to reach. Learn about the education required, including continuing professional education and credit hours, and the opportunities available as you map out your future:
What is Capital Accounting?
Capital is the term for the set of assets that companies use to generate revenue. These could be physical assets like buildings and machinery, or informational assets like intellectual property and trademarks. How those assets are capitalized and managed has a direct impact on a company's financial security, which is why careful accounting is essential.
Capital accountants helps companies determine what capital asset to capitalize and when, and how to track capital expenditure. For example, consider a piece of heavy machinery a company owns. A company can treat this as an expense and deduct the cost. Conversely, they could declare it a capital asset and deduct the depreciation. There are benefits and hazards to both options, and it's up to a capital accountant to determine the optimal strategy to balance assets and operating costs while maintaining accounting standards.
Typically, the larger the company the greater the need for capital accountants and financial accounting in general. Major corporations may have entire capital accounting departments, while midsized businesses may keep just one in-house. These accountants are also employed at some consulting firms and in some government agencies to manage the balance sheet of each, and to track changes in investment, operations, position in the market, legal reporting, and statements analysis, along with internal auditing requirements and maintaining data in a capital asset program.
Capital accounting is generally considered an entry-level accounting job. Opportunities are available right out of college and many use this opportunity as a stepping stone to more specialized or lucrative forms of accounting. For many, a job as a capital accountant is the launchpad for a successful accounting career.
What Does a Capital Accountant Do?
The day-to-day responsibilities vary widely based on where a capital accountant works and what professional level they have attained but you'll need to have the necessary knowledge to gain access to this career. You may share these duties as a member of a team or group if you work with a large company or bank (in which case, you'll need all these skills), or you may be the only specialist in this area in the office of a smaller company.
Typically, however, the full list of responsibilities will break down into one of four categories:
- Helping to devise and administer a company's capital asset program. This program is one of many important accounting information systems you may work with in your career. This includes performing regular audits, identifying important assets and tracking them, and calculating the acquisition value of assets. You'll need to know about asset value, market value, and valuation methods to do these tasks.
- Identifying new assets for potential acquisition. Assets are evaluated based on their practicality and profit potential, along with the specific policy requirements of each company.
- Preparing an annual budget outlining capital expenditure. This document guides and provides advice on financial decision making for senior management and has deep consequences for the bottom line.
- Maintaining depreciation schedules carefully. These schedules determine how quickly an asset loses value and are often tailored for specific industries or assets. This will need to be reviewed for each annual budget and may be reviewed throughout the year at larger corporations.
In practice, the work of capital accountants is similar to most other accountants. They work closely with financial facts and figures, operate according to Generally Accepted Accounting Principles (GAAP), and handle projects ranging from regulatory compliance to strategic financial services.
What Education is Necessary for Capital Accounting?
The minimum education necessary for most capital accounting jobs is a bachelor's degree from a four-year institution. Typically, this degree must be in accounting or finance, but some general business majors may be acceptable as well.
There are degree options available from thousands of institutions across the country, but they must meet certain standards to assist an accounting career:
- The institution must be an accredited college or other institution that's been reviewed by an institution recognized by the US Department of Education (DOE). A degree from an unaccredited organization may not be recognized by employers or licensing agencies such as the AICPA or NASBA.
- The degree program or continuing educatin must include 150 semester hours of coursework and usuallly a year of full-time experience in an accounting position if you wish to take the Uniform CPA exam and earn CPA licensure. In most cases it's possible to count transfer credits or distance learning towards this total, but the rules vary by state accounting board and institution.
- The coursework must have a heavy emphasis on accounting, particularly financial accounting. Specific types and amounts of credit hours are not required, but in most cases at least a quarter of a student's coursework is accounting intensive.
In practice, the work of capital accountants is similar to most other accountants. They work closely with financial facts and figures, operate according to Generally Accepted Accounting Principles (GAAP), and handle projects ranging from regulatory compliance to strategic finance.
Does Capital Accounting Require Certification?
Average Accountant Salary: $51,600
Technically, there are no requirements to become a capital accountant. Employers establish their own standards and then hire whoever they believe can fill the role. In practice, however, employers are looking for minimum qualifications in whoever they hire. A bachelor's degree is more or less mandatory, and while certification is not, it is a significant career asset.
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- CPA Licensure
Becoming licensed as a Certified Public Accountant (CPA) is the single best way to kickstart an accounting career. These professionals are recognized as having mastered the fundamentals of accounting, achieved important career milestones, and maintained the highest standards for ethics and quality. A license is not required to get started as a capital accountant, but it's crucial for moving an accounting career onwards and upwards.
Every state sets its own standards for granting and renewing CPA licenses.
These requirements are common across almost all of them:
- A CPA must have at least a bachelor's degree from a four-year institution with a major in accounting or business. Some states also require undergraduate training to have an ethics component. Many state accounting boards require CPAs to have earned specific amounts of credit hours in specific subjects like auditing, taxation, or bookkeeping.
- A CPA must pass the Uniform CPA Exam. This exam is administered by the National Association of State Boards of Accountancy (NASBA) throughout the country on a quarterly basis. Anyone with a bachelor's degree in accounting has the necessary knowledge, but in some cases it's possible to take the test before completing a degree program. Applying and preparing for the test is a long and complex process, which is why students are encouraged to begin planning far in advance.
- A CPA must have a prescribed amount of on-the-job experience. The exact total varies by state, but in most cases it's equivalent to one-year of full-time experience in public/private industry or academia. This experience must be supervised and verified by a CPA and include specific responsibilities determined by the state accounting board.
- A CPA must complete a prescribed amount of continuing professional education (CPE) in order for a CPA license to be renewed. Most states required CPAs to complete 120 hours every three years, but in some states the standards are stricter. CPE hours can be earned by attending lectures or accounting events, completing classes, writing books or articles on accounting, teaching accounting or business classes, or through other means as long as they meet state standards. All CPE completed must be verified by an authorized party, and records must be maintained for several years.
Salary and Career Outlook
Before diving into the data it's important to note how it's collected. Capital accounting is a specific specialty of accounting. Researchers do not track this specialization on its own but roll it into a broader category known as general accounting or corporate accounting. That means the data listed here does not apply only to capital accountants but to most accountants generally.
According to the Bureau of Labor Statistics (BLS) the demand for all accountants is going to be strong for years to come. Between 2020 and 2030 it is projected to grow by 7%, which is faster than the national average for all accountants. Over that period an additional 96,000 accountants will enter the field, many of them in capital accounting roles. Growth and demand is different in each state.
In 2020 the BLS recorded the median salary for accountants was $73,560 per year, which breaks down to $35.37 per hour. Since capital accounting is considered an entry-level opportunity the compensation is often lower, but not by a significant amount. In some states where demand for accountants is stronger or the cost of living is higher, the compensation is as well. The highest-paying states include the District of Columbia, New York, New Jersey, Virginia, and California in that order.
The decisions accountants make early in their career have a major impact on their lifetime earnings potential. Seeking out the right degree options, training opportunities, early jobs, and professional connections all affect how much an accountant earns yearly and what sort of advancement potential is available. Careful planning and preparation now, at the start of a career journey, improves everything that comes after.