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Fund accountancy isn't as well-known a career path as a CPA or a corporate accountant. Instead, these specialists turn their focus to managing the finances of a specific fund. Their work includes generating financial reports, controlling transactions and fund activity, and investment accounting including tracking yields and interest.
The fund accountant is the key point of contact between clients and their employers, often firms offering this specialty accounting service. Meaning they'll often deal with investment managers such as a hedge fund manager or fund administrator, fund investors, and their employers. This means that, on top of their analytical skills, they will also need soft skills, which include excellent communication skills and interpersonal skills, time management skills, and excellent attention to detail, in addition to extensive knowledge and education in accounting so that they can deal with all client demands. Those in the fund accountant role might work in the office of non-profits or government agencies, financial institutions, hedge funds, or investment funds. They may find companies hiring directly into fund accountant positions or earn promotions from positions such as that of a senior staff accountant, investment accounting specialist, internal accountant, project auditor, etc.
The defining factor for all sectors, however, is ensuring that money is being used as intended, according to company policy. The accountant serves to help stakeholders make important decisions about how to best handle funds and assets.
If you're looking into a fund accountancy career yourself, here is a bit more about the profession and the education you'll need to get there and reach the management level.
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What is Fund Accounting?
Fund accounting is a specific accounting method that emphasizes legal accountability over generating profits.
It is used by organizations that exist to achieve a specific mission or purpose other than to make a profit. That said, there are some key differences in the job description based on a few things. For one, are you looking for a non-profit organization or a hedge fund?
While fund accounting differs by profession, its main purpose is to break down an organization into several separate funds. The most obvious example here is government funding. Funds are allocated by use so that the education, public works, and so on all have their own accounting team and the content of one fund is not used for the purposes of another.
Rather than examining an organization's finances, on the whole, each fund is examined as its own entity, using its own daily balance sheet. Simply put, it's more about how money is being managed internally and compliance. Are funds being appropriately used? Traditional accountants, by contrast, look at profits, loss, and payroll; the whole package.
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What are the Fund Accounting Specialty Areas?
Here, we'll look at some of the different fund accountancy career sectors: public vs. private, and more. Choosing an area of expertise will dictate the path you career follows. As such, you should be familiar with your options and the responsibilities of each position before going for your certification or any additional training or education in accounting.
Here is a look at some of the most common areas of specialty for those who offer these services:
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Non-Profit Fund Accountancy
Non-profits cover things like churches or other religious affiliations, hospitals, schools, and charities. In these cases, fund accountancy works to hold organizations to their word; meaning that they'll ensure donors' money is being used appropriately, and that the organization is managing its money responsibly. This position aims to improve transparency, preventing overspending on salaries or non-essentials. In this role, you may have the title of internal accountant, senior staff accountant or senior fund accountant, depending on the size of the company and your management level.
Non-profits operate according to the Financial Accounting Standards Board (FASB) set of principles.
The FASB has put together a set of guidelines that dictate how gifts and endowments are used. The guidelines also dictate how operating costs must be in proportion to the work done by the organization.
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Government Fund Accounting
Government fund accounting looks a lot different than fund accounting on say, a corporate level. Government accountants must follow a strict set of standards; Generally Accepted Accounting Principles. These are a set of guidelines used in the US used by accountants at all levels of government. This exists to ensure tax payer dollars are being used as intended.
Government funding is broken up into different accounts, all managed separately. This is so that law enforcement, public assistance, disaster relief, and so on, all draw from separate accounts. This provides some protection against say, using one organization’s allotted funds for another purpose.
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Hedge Fund Accountants
Hedge fund accountants, or a hedge fund manager, typically work in teams, monitoring how funds are performing, as well as keep tabs on, and reporting, the real value of their assets based on the market. This person will also manage the cash flow created by hedge funds and generate reports for managers and investors in each account.
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Mutual Fund Accountants
Mutual fund accounting is a critical piece of the whole financial system and are most likely to work within financial institutions. Investors are increasingly looking toward mutual funds over stocks and bonds. Mutual fund accounting involves tracking the price of investment vehicles.
And from there, you'll assign the correct investment incomes to each investor and participant. A common example of this is an employer-sponsored 401k, in which the basis for the outcomes in equity are the parameters or terms set by the company and the plan you sign up for.
Again, in all the above examples, the role is very similar. The senior fund accountant is there to ensure money is being used the way stakeholders intended it to be used. Think of it as a checks and balancing system within any given organization.
What are the Fund Accountant Education Requirements?
Average Fund Accountant Salary: $56,200
All those looking to get into this field will need at least a bachelor's degree, preferably a degree in accounting, business or a related field.
Bachelor's candidates are going to need to complete around 120 credit hours and will fare best with courses in the following under their belt:
- Cost, financial, and managerial accounting
- Auditing
- Assurance
- Accounting technology
That said, requirements differ both by state and by sector. In some states, employers recommend CPA licensure. In other cases, students may opt for a certificate specifically in fund accounting. Others still, may find pursuing an MBA makes most sense if they want to reach the management level.
| Entry Level | Mid Career | Late Career |
|---|---|---|
| $49,000 | $63,100 | $71,900 |
Paths to Becoming a Fund Accountant
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Master’s Degree
Additionally, one might pursue a master's degree in the field. One option is a Master's in Accounting or a Master of Business Administration (MBA) with a focus on accounting. Master's level accounting classes may cover fund accounting, budgeting, and more in order to improve your analytical skills.
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You don’t necessarily need a master’s degree to become a fund accountant in most verticals. However, the added education can help you stand out to employers. Going the MBA route may be worthwhile if you’re looking to work in the private sector. MBAs in accounting may prepare for the CPA exam.
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Fund Accounting Certificate
Current accountants looking to specialize in fund accountancy may opt for a college certificate program in this field, rather than another full degree, in order to save time. Certificate programs provide a deeper dive into government or non-profit accounting work. These programs might include courses in accounting theory, accounting systems, and fund accounting.
Many accounting positions do require at least one year of experience working as a general accountant. Consider taking an internship with a fund accountancy firm if you're interested in exploring this path.
As an intern, you may perform audits, create financial statements, and communicate client demands, as well as other basic accounting activities. It's an excellent way to get that required experience while getting a feel for this particular career.
As an added bonus, interning with a non-profit or government fund could help you secure a job after getting certified. It can certainly shorten your job search, since you will have the experience on your resume that employers are looking for and prove you have the ability to do the job.
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CPA Certification
Additionally, some jobs may prefer that candidates have completed their CPA requirements. Positions with the Federal Securities and Exchange Commission (SEC) (3) are one such example. While not all those in fund accounting need a CPA in order to find work, the designation can make them more attractive to potential employers.
CPA certification opens the door to additional opportunities and higher pay—both in the public and private spheres.
In most cases, getting a CPA means completing graduate-level post-baccalaureate certificate. CPA candidates must also have at least one year of accounting experience. Additionally, prospective CPAs will need to pass an exam in order to complete the certification process.
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Nonprofit and Government Accountancy Certification Credentials
While a background in fund accountancy promises a long list of job prospects, we should point out that non-profit and government positions come with a strict set of standards.
Several nationally-recognized organizations offer certification credentials in fund accounting. Here are a couple of examples:
- The National Association of Nonprofit Accountants and Consultants (NPAC)
NPAC offers a "Certified Nonprofit Accounting Professional" (CNAP) designation (4) to accountants who have worked in a non-profit organization for at least 18 months.
Getting your credential means going through a training series and taking a test. The certification is a valuable asset for nonprofit accountants seeking to further their career. The training provides a boost in industry-specific knowledge. It's also a great way to demonstrate value to an existing or prospective employer.
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The Association of Government Accounting (AGA)
The AGA currently provides a "Certified Government Financial Manager" designation (5) for accountants who already have a bachelor's degree, plus 24 credit hours of related coursework. This includes finance, accounting, auditing, budgeting, economics, or public administration courses.
To receive this designation, candidates must pass an exam administered by the organization. While you'll need to prepare for the test, the AGA does not require any additional training to take the exam.
- The National Association of Nonprofit Accountants and Consultants (NPAC)
Salary and Career Outlook
It's safe to say; there's no shortage of places for you to find work. On the non-profit side, you're looking at arts foundations, charities, hospitals, and universities.
On the government side, you're looking at possibilities in the federal, state, and local governments. Government accountants may manage tax revenue, public service funding, and administrative funds.
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Finally, fund accountants have the option of working in the private sector. Job prospects include managing mutual funds, hedge funds, or working for a large accountancy firm.
According to the U.S. Department of Labor, Bureau of Labor Statistics, accountants are looking rapid growth in their industry. (6)
As per the BLS, the national average salary for fund accountants hovers around 50-60k for those with 1-3 years of experience. That said, salaries keep going up, along with demand. In 2016, accountants experienced an average increase of 3.6-3.7% at all stages in their career.
Fund accountants with three to five years are looking at 68K-88K. Managers can expect more; in some cases, surpassing 130K in yearly earnings. Other factors include the area of focus; you’ll likely make more by opting for a private sector than a non-profit. Location also plays a role—NYC accountants will make more than their small-town counterparts.
Considering the Fund Accountant Path?
It's undeniable that fund accounting professionals have a promising and diverse set of career prospects. But, we recommend going for a certification, CPA, or master’s degree if you wish to flourish in the business. There are plenty of jobs at all levels, but those with credentials stand to benefit far more.
Becoming a fund accountant may be a smart choice paved with several career paths at your disposal. Whether you opt to work in the federal government or want to manage a hedge fund, fund accountants are in demand across the board.
With enough experience, accountants can advance to supervisory or management roles. Experienced accountants may have the option, too, to open their accounting firm or consultancy.