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Fund accountancy isn't as well-known a career path as a CPA or a corporate accountant. Instead, fund accountants turn their focus to managing the finances of a specific fund. Their work includes generating financial reports, controlling transactions and tracking yields and interest.

The fund accountant is the key point of contact between clients and their employers. Meaning, they'll often deal with investment managers, fund investors, and their employers. Fund accountants might work for non-profits, hedge funds or investment funds.

The defining factor for all sectors, however, is ensuring that money is being used as intended. The accountant serves to help stakeholders make important decisions about how to best handle funds and assets.

If you're looking into fund accountancy yourself, here is a bit more about the profession and the education you'll need to get there.


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What is Fund Accounting?

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Fund accounting is a specific accounting method that emphasizes 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 education, public works, and so on all have their own accounting team.

Rather than examining an organization's finances, on the whole, each fund is examined as its own entity, using its own balance sheet. Simply put, it's more about how money is being managed internally. Are funds being appropriately used? Traditional accountants, by contrast, look at profits, loss, and payroll, the whole package.

Where is Fund Accountancy Used, and What Are the Areas of Specialty?

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Here, we'll look at some of the different fund accountancy sectors, public vs. private, and more. Choosing an area of expertise will dictate your career path. As such, you should be familiar with your options before going for your certification or any additional training.

Here is a look at some of the most common areas of specialty for fund accountants:

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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, they'll ensure that donors' money is being used appropriately, and that the org is managing its money responsibly. This position aims to prove transparency, preventing overspending on salaries or non-essentials.

Non-profits operate according to the Financial Accounting Standards Board (FASB) set (1) 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. (2) 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. So, 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 Funds

Hedge fund accountants typically work as teams, monitoring how funds are performing, as well as keep tabs on the value of their assets. This person will also manage the cash flow created by hedge funds and generate reports for managers and investors.

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Mutual Funds

Mutual funds accounting is a critical piece of the whole financial systems. Investors are increasingly looking toward mutual funds over stocks and bonds. Mutual fund accounting involves tracking the price of investment vehicles.

And from there, assigning the correct investment incomes to participants. A common example of this is, is an employer-sponsored 401k.

Again, in all the above examples, the role is very similar. The 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.

Fund Accountant Education Requirements

All fund accountants will need at least a bachelor's degree, preferably in accounting, business or a related field. Bachelor's candidates will fare best with courses in the following under their belt:

  • Cost, financial, and managerial accounting
  • Auditing
  • Assurance

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.

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.

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 certificate program in this field. 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 if you're interested in exploring this path.

As an intern, you may perform audits, create financial statements, and communicate with clients. It's an excellent way to get that required experience while getting a feel for that particular career path.

As an added bonus, interning with a non-profit or government fund could help you secure a job after getting certified.

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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 fund accountants 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.

  • 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.


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Salary and Career Outlook

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It's safe to say; there's no shortage of places for fund accountants to work. On the nonprofit 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.

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?

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It's undeniable that fund accountants 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.