If an estimated employment growth of 11 percent and generous salaries aren’t enough to get accountants excited, a recent study may do the trick.
For the third consecutive year, accounting was named the most profitable industry in 2016 by Sageworks, a financial information company that provides financial analysis to accounting firms and private companies. The study is based on a financial-statement analysis provided by privately held companies.
The study found that privately held accounting companies (accounting, bookkeeping, tax preparation, and payroll service companies) averaged a net profit margin of 18.3% over a 12-month period ending on June 30.
Legal services firms and real-estate leasing companies tied for second and third in profitability with a 17.4% net profit margin followed by outpatient career centers (15.9%).
Unlike other very profitable professions mentioned in the article, such as law and real-estate leasing, the profits from professional accounting are broadly available to new entrants into the profession.Reed Smith, professor of accounting and faculty chair of the Graduate Accounting Programs at Kelley School of Business Indianapolis
As explained in Forbes, Sageworks analyst James Noe illustrated how some businesses tend to have healthier bottom lines because of the industry in which they operate. For example, the most profitable industries often times sell services rather than products, so their operations don’t require raw materials or other up-front costs that would cut into their bottom line.
Because accounting is a service and not a tangible product being sold, the industry is almost destined to have a high margin, according to experts.
That appealing industry outlook, combined with above-average salaries, has attracted a large number of students who don’t have experience in business or accounting to Kelley’s Master of Science in Accounting (MSA) Program. In fact, one-third of students pursuing the MSA come without a business degree, and two-thirds come without an accounting background.
For those with or without an accounting background, the MSA can ultimately lead students down the path to become Certified Public Accountants (CPAs), a title that can ultimately accelerate a person’s career forward, said Smith.
“Newly minted CPAs have enormous opportunities for professional growth because of the structure of the public accounting industry. Realizing those opportunities does take hard work and tenacity, but industry profits are available to more than just a few ‘top’ professionals,” Smith added.
The latest data indicates the average salary for a CPA in Indianapolis is $60,366.