What They Don’t Teach You in Public Accounting: When & Why to Make the Move In-House
By: Dash Victor
Tags: Accounting, Technology, Job Search, Business, Interviewing

I worked in Public Accounting at one of the “Big 4” firms for seven years, and at the time of this article am now well into my second tech company as the Controller. Public Accounting was, and still is, an excellent way to start your career. All the big accounting firms are consistently rated as “Best Places to Work” and “Best Places to Start Your Career.” At only a few years out of college, you’re given loads of responsibility, gain experience managing people, and are exposed to all sorts of companies with direct access to their top executives. Plus, for some hiring managers, Public Accounting and a CPA are must-haves on the resume.

But, for most people in Public Accounting, there comes a time to move on. The firms are structured like a pyramid so not everyone will become (or wants to become) a Partner. So how do you know when the time is right for you to move on? What do you need to know before you make a move in-house to a company? In my experience, you should stay until the day you are promoted to Manager and then start looking outside. If you are in a market with lots of outside opportunities, like the Bay Area, then you may even want to explore your options earlier.

With seven years at a Big 4 firm, I was a part of the audit machine for probably a couple of years too long. The accelerated learning starts to slow and peers who have left are gaining more hands-on experience in-house. If you want to start climbing the ladder from Senior Accountant to CFO, you need to see the inside of companies.

Why is that? Once you are working inside a company, the experience you gain is both different and valued differently by those looking to hire you. Before you join a company, ask yourself how fast is it growing and will there be investment in the accounting team? If the company grows, so can you. If you are a one person accounting team for multiple years, there is only so much you can learn.

I am often asked about the transition from public accounting to in-house accounting. What are the biggest differences? What is hard? What is easy? Let’s examine four big changes. Most of my examples are from my experiences at later stage pre-IPO tech companies. But hopefully you find these tips useful for transitioning into companies of any size or industry.

The most important differences between Public Accounting and In-House Accounting are:

SYSTEMS TIME OPERATIONS MANAGEMENT

SYSTEMS

When you audit a company you see what systems they use and reports they run. But do you really KNOW how to create a journal entry, run a query, or how the systems all talk to each other? Learn it. Learn how to set up a chart of accounts. Learn how data feeds from the HRIS system to the Payroll system to the Accounting system. This hands-on experience is invaluable.

Another important difference is the ability to select which systems to use as you grow. Which systems give you the best bang for your buck? Which systems are right for you at the right stage of growth? When your company is small and dollars are scarce you probably aren’t (and shouldn’t be) implementing Oracle or SAP. Talk to your colleagues at other companies, see what they are using, and do reference checks with actual customers.

Below is what I call the standard tech company systems “stack.” Most tech companies start with the systems on the left and progress to the systems on the right.

ERP: Quickbooks — > Netsuite

Expense Reporting: Expensify — > Concur/Divvy

Procurement: Bill.com — > Coupa/Concur/Tipalti/Airbase

Payroll: TriNet/Gusto — > ADP

HRIS: BambooHR — > Namely/Workday

CRM: Salesforce/Justworks — > Salesforce

Cap Table: Carta — > Shareworks/Equity Edge

401K: Guideline/Human Interest-> Fidelity/Vanguard/Empower

An additional piece of advice: try to limit the number of systems you use. You don’t want a spaghetti of systems with no source of truth. Every cloud solution out there claims to have an “API” for everything, but in the end most don’t do it well. So you end up doing manual workarounds to input data into all your systems. Do reference checks with actual users prior to buying any tool, and ask them what their pain points are. How easy is it to integrate to other systems? Once you do select a tool, keep in mind implementations generally take longer than you think. Budget extra time for that. Which brings me to…

TIME

Time moves much more quickly inside of a company. The accounting team schedule revolves around a monthly close. If you can get that down to the first two weeks of the month, that gives you the next two weeks to work on projects and the “fun” stuff, like systems implementations (see above). As you grow, you will constantly be evaluating new tools so you need to carve out time for it.

Let’s quickly talk about the month-end close. You should be able to close the books in the first 2 weeks of the month. Best in class for a private company is around 5–7 business days. This does not give you much time to spend on each area (eg. cash, prepaids, accruals, etc). That also means the Controller is not going to have enough time to review in much detail. Much like public accounting, a lot of errors are caught in reconciling the balance sheet and performing fluctuation analysis between the current and prior month.

A big way to save time on tricky accounting questions is to consult your network. Have colleagues you can go to at other companies that can give you quick answers. Keep in mind you are not the first person facing a particular issue or decision. So keep that rolodex of public accounting friends handy.

OPERATIONS

You are going to spend an inordinate amount of time on operations. This includes accounts payable, expense reports, accounts receivable, payments, credit cards, facilities issues, and payroll matters. This is the base of the pyramid on which all other accounting areas are dependent upon. Even at the Controller level I approve almost every payment that goes out, review numerous invoices and expense reports, and am copied on all sorts of “urgent” emails from employees.

Learn these processes in and out and use software tools to automate the approval of invoices and the cutting of checks. You have to get good at operations and hire people that can run independently in these areas. If this isn’t working then everything else up the chain starts to fall behind. All is well until the power goes out in your office because you didn’t pay the bill (yes this has happened to me before). To avoid literal fire drills, focus on operations first, but don’t let it consume all of your time.

MANAGEMENT

In public accounting you get to manage all sorts of rotating individuals. Once you have a team of your own things change. Now you have real responsibility to do weekly one-on-ones, come up with real goals, and discuss real career paths. This now is your #1 job. If someone is not performing well, you have to either train them or make a tough decision to let them go.

In addition, you are not just managing people but managing multiple outside firms. You will have an audit firm, a tax firm, a valuation firm, a recruiting firm, a law firm, among others. Selecting and managing firms becomes highly important as these are an extension of your team. Pick good ones and they will follow you from company to company. Pick bad ones and your own performance will suffer. Again, do reference checks with your network to get real feedback before signing on.

OTHER FACTORS TO CONSIDER

The “Brand” of the company you work for matters. The safe bet is to pick a company others have heard of. Silicon Valley has a shortage of solid accountants, so go ahead and apply to your dream company…you might be surprised where you get a call back.

CONCLUSION

The one item I didn’t mention above is that focusing your efforts each and every day on the success of one company is highly rewarding. Just knowing that you are personally helping a company succeed is probably the biggest difference of them all. It may sound cliche but there is a certain sense of accomplishment in moving a company forward (even if it is just keeping the lights on). And if you do get to go through the IPO process it is very different from the inside!

Hopefully this was helpful to those in Public Accounting wondering what it’s like on the other side. Good luck in your careers!