Once you decide to join the exciting and highly competitive world of the accounting industry, the next big decision you have to make is whether to apply for employment in a CPA firm or to start your own business. Both of these options have their respective advantages and disadvantages, and you really just have to pick which scenario works best for your situation and the goals you have, career-wise.
In this article, we’ll help you reach a decision that will work for you by listing down the pros and cons of being an employee and venturing into entrepreneurship in the accounting sector.
Pros of Being Employed in a CPA Firm
- Guaranteed income
For as long as you’re regularly employed, you won’t have to worry about whether or not you’ll get paid next month. Whether or not accounts work out or clients pay on time, your boss will have to pay you in accordance with your employment contract.
- Fixed work hours
Business owners work round the clock to keep their companies running. Meanwhile, employees simply clock in, do their daily tasks, then clock out — and that’s it. You’ll even get paid for extra time, something that entrepreneurs never experience.
- Less pressure, less responsibility
As an employee, you only have to think about accounts and tasks assigned to you. Everything else is the problem of somebody else. This means less pressure for you.
- You actually don’t have to be a CPA
It can be pretty hard to attract clients to your own firm if you, as the owner, are not a licensed CPA, because potential clients might not think your firm is qualified enough. It will be much easier to get employed in a CPA firm while you’re preparing to take the CPA exam.
Cons of Being An Employee in a CPA Firm
- Less independence
Even if you’re an accounting professional, working for someone else’s firm means you will have to take orders and thus your actions will be limited not to what you think is right, but what your boss thinks is right.
- Limited room for growth
Since you will have less independence as an employee, you will also have very little room for growth. You might be up for a few promotions, but that’s pretty much it for you. Running your own business will definitely teach you more and give you more opportunities to explore your strengths and improve your weaknesses as an accountant.
- Making someone else rich
This is one downside to having a fixed income. Even if the company expands its operations or gets more clients, you can only hope for a small raise, especially if the firm you’re working for does not have a profit-sharing agreement with its employees.
- Having to deal with people you may not like
Office politics is completely unavoidable when you’re an employee. Even in a CPA firm where all your colleagues are supposedly professional, you are bound to encounter people who will rub you off the wrong way. If you run the business, you can actually let people go when they’re no longer serving the firm culture you want.
Pros of Launching Your Own Firm
- Choosing your own hours
Since you’re the boss, you don’t actually have to render a certain amount of hours at work. In fact, once you’ve established your business processes, you can completely go hands-off and just check in on the firm’s operations every now and then.
- Calling your own shots
Businesses are facing new realities especially in light of the pandemic. More than ever, employees are vulnerable and dependent on how well their bosses can handle the situation; but if you’re running the business, you have the freedom and power to decide your own strategy.
- More room for growth
As mentioned earlier, nothing can beat the kind of learning and experience you can gain from running your own business. It’s a challenging endeavor, no doubt, but it will also be the most fulfilling thing you can ever do for your career.
- More financial freedom
While employees have a guaranteed monthly income, entrepreneurs will always have more financial freedom. You will be in total control of the business’ finances, and can always move money around in order to attain your personal and business financial goals.
Cons of Running Your Own CPA Firm
- Longer working hours
As mentioned earlier, you can technically choose your own hours as a business owner, but it doesn’t mean you get to slack off. In fact, you will have to work harder and longer hours than anyone else especially while you’re still trying to build your business from the ground up.
- More responsibilities
From choosing a marketing strategy all the way to managing your employees’ personal crises, you will have a lot more responsibilities when you choose to start your own CPA firm. You will have to be on top of everything — even things that regular employees don’t even have to think about.
- Less work-life balance
As discussed earlier, employees can simply clock-in and clock-out, day after day, and never have to take work home if they don’t want to. This is great for your employees because it shows you care for their welfare, and it will, in turn, increase retention and engagement. But this just is simply not the case for entrepreneurs. Running a business is a full-time job, especially if you want success, fast.
- Need for huge capital
Needless to say, starting your own business requires a lot more capital than applying for employment.
The potential returns may be bigger, but there’s just no way you can tap into that if you don’t have enough funding upfront.
Now that you know the pros and cons of being an employee and starting your own CPA firm, you can make an informed decision about what you want to do for now. Weigh your options carefully and be realistic about your current situation, as well as your goals for the future. Only then can you make a decision that will benefit you in the long run.