What does a Private Accountant do?

In the United States, a private accountant works for a single employer and performs one or more accounting functions, including internal auditing, budget consolidation, tax accounting, and cost accounting, among others. A private accountant’s title may vary, such as “staff accountant,” “internal accountant,” or “management accountant,” but they all serve the same purpose. While many private accountants do not have a college degree in accounting, larger companies almost always require at least a bachelor’s degree in accounting, and many also require applicants to have prior public accounting experience.

While private accountants work for a single employer, public accountants work for a variety of clients and are required to maintain an arm’s length relationship with the businesses for which they perform these services. During the course of a year, they may be assigned to five or six companies, and many never return to the same client. As a result, they have a wide range of experience with various business structures and accounting scenarios. If a company requires applicants for private accounting jobs to have public accounting experience, it is this experience that they are looking for.

An internal audit, which is a detailed investigation of all the different components of the company’s financial transactions, is one of the most important tasks a private accountant may be asked to perform. A private accountant, for example, will thoroughly examine all supporting documentation for a disbursement to ensure that it is accurate and fairly reflects the transaction. In many cases, this will entail verifying that goods or services were received as billed and, if necessary, establishing or monitoring internal control systems. For example, an internal control system might include logging all incoming funds separately from the bookkeeping process. A private accountant will keep track of the log and ensure that all funds received are handled properly.

Another important part of a private accountant’s job description is tax accounting. Although many smaller businesses will hire a public accounting firm or a Certified Public Accountant (CPA) to prepare their tax returns, the private accountant handles much of the preliminary work.

The role of a private accountant is frequently misunderstood as nothing more than a glorified bookkeeper. While some small businesses may designate their bookkeeper as a “staff accountant,” the reality is that a private accountant’s work begins where the bookkeeper’s ends. While private accounting careers do not always pay as well as public accounting careers, they do provide a better balance of work and personal life, as public accounting often requires long hours, especially for entry-level accountants.