Finding and retaining top talent is a constant challenge for accounting departments.
Benchmarking prevailing salaries by experience level and geography is key to crafting competitive offers that attract qualified candidates.
In this post, we'll analyze national and regional salary ranges for accounting managers, including additional compensation like bonuses and benefits, to help inform strategic hiring and retention initiatives.
Introduction
The role of an accounting manager is critical for any business. Accounting managers oversee the preparation of financial reports, direct accounting operations, and develop internal controls to safeguard assets. With the complex regulatory landscape and need for accurate reporting, hiring the right accounting manager is key.
Benchmarking accounting manager salaries provides helpful data to set competitive compensation packages. By researching earning potential, businesses can develop attractive job offers that entice qualified candidates. Understanding salary norms also assists with budgeting and cost control efforts.
Defining the Role of an Accounting Manager
Accounting managers have extensive financial oversight within an organization. Main duties and requirements include:
- Overseeing the day-to-day accounting functions like accounts payable/receivable, payroll, budgeting, and financial reporting
- Ensuring compliance with accounting regulations and standards
- Managing a team of accountants and bookkeepers
- Analyzing financial data to advise senior executives on business performance
- Bachelor's degree in accounting, finance or related field
- 5+ years of experience in an accounting management role
- CPA credential preferred
With their specialized expertise and leadership capabilities, accounting managers have a far-reaching impact on fiscal operations.
Why Benchmark Accounting Manager Salaries?
When recruiting accounting managers, benchmarking salaries provides two key advantages:
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Informed Job Offers - Understanding earning potential allows businesses to develop competitive job offers that attract qualified candidates in a tight labor market. This increases the likelihood of hiring the best person for the role.
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Budget & Cost Control - By researching accounting manager pay at peer organizations, HR can factor realistic salary expenditures into budgets. This assists in forecasting and managing labor costs effectively.
In summary, benchmarking accounting manager earnings enables recruitment success and smarter compensation planning. Both are invaluable in securing specialized talent that manages vital financial functions.
Current National Salary Ranges
Accounting managers play a vital role in overseeing the financial operations of companies and organizations. Their responsibilities include preparing financial reports, directing accounting activities, and developing internal controls to safeguard assets. As such, they command competitive salaries that rise with increasing levels of experience.
Entry-Level (1-3 years)
Accounting managers just starting out in their careers generally earn between $65,000 and $85,000 per year. This range accounts for variation across industries, company size, geographic location, and other factors. Those working for major corporations and firms in large metropolitan areas tend to sit at the higher end of the pay scale.
Key drivers of pay for entry-level accounting managers include:
- Education level and field of study
- Internships and early-career experiences
- Technical skills and software/system knowledge
- Type of company and industry
Overall, those able to demonstrate strong technical aptitude and a solid grasp of financial/managerial concepts tend to earn salaries on the higher side of the range.
Mid-Level (4-6 years)
With several years of proven success managing team workflows, month-end closing, general ledger, and financial statements, mid-level accounting managers earn $90,000 to $120,000 annually. Those in high-level corporate finance or public accounting manager roles generally sit between $100k-$115k.
Pay is primarily determined by factors like:
- Years and breadth of accounting experience
- Leadership abilities and team oversight
- Budget and headcount ownership
- Revenue/profit goals tied to performance
Strong technical, communication, analytical, and interpersonal skills also enable mid-level managers to command higher compensation.
Senior-Level (7+ years)
Accounting managers with 7+ years experience usually earn between $110,000 up to $150,000 per year. Those in specialized roles like Tax Accounting Manager or Audit Manager generally sit at the higher end of that scale. Geographic location also plays a key role, with salaries in major metro areas skewing higher.
Key factors driving senior-level salaries include:
- Proven leadership experience with large teams
- Responsibility for complex regulatory workflows
- Ownership of departmental budgets, forecasts, etc.
- Strong technical knowledge and specializations
Strategic involvement in financial decisions, executive presentations, and emerging technologies enable managers to demonstrate maximum value to organizations. This leads to higher compensation over time.
Salaries by Industry
Accounting managers play a critical role in overseeing the financial operations and reporting for companies across all industries. Their salary can vary significantly depending on the specific industry they work in. Here is a breakdown of average salaries for accounting managers across some of the top sectors.
Technology
The technology industry tends to pay accounting managers very competitively, with an average salary of around $125,000 per year. This industry moves fast and requires accounting managers that can keep up with the rapid launches of new products and services. They must have expertise in areas like revenue recognition for software and SaaS businesses.
Healthcare
In the healthcare sector, accounting managers earn approximately $110,000 on average. They face complex regulatory and compliance issues in this industry, including intricate billing and revenue cycles. Deep knowledge of healthcare finance and accounting principles is essential.
Finance
As expected, the finance industry offers lucrative salaries for accounting managers, averaging around $140,000 annually. These professionals manage risk, investments, complex transactions, and reporting for banks, insurance firms, and other financial institutions. Expertise in financial instruments, mergers and acquisitions, equity, and more is mandatory.
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Salaries by State and Region
Accounting manager salaries can vary significantly depending on location and cost of living. Here is a breakdown of some key regional differences.
West Coast vs. Midwest vs. East Coast
The West Coast tends to have the highest accounting manager salaries, driven by the high cost of living in states like California and Washington. Average salaries in CA and WA range from $120,000 to $150,000.
Midwestern states tend to have lower salaries, averaging $80,000 to $110,000 in places like Illinois, Ohio, and Michigan. The lower cost of living allows managers to enjoy comfortable lifestyles at these salary ranges.
East Coast salaries fall somewhere in between, with managers earning $100,000 to $130,000 on average in states like New York, New Jersey, and Massachusetts. The higher salaries help offset the higher costs of living near major metro areas.
High Cost-of-Living States
States like California and New York have much higher costs of living, especially housing, so accounting manager salaries need to be higher as well to attract talent. Salaries in the San Francisco Bay Area average around $150,000. New York City managers earn upwards of $130,000.
Other high cost-of-living states like Washington, Massachusetts, and Hawaii also see higher accounting manager salaries in the $120,000 to $140,000 range on average. The increased salaries help offset higher taxes and living expenses.
Low Cost-of-Living States
In states with lower costs of living like Texas, Florida, and Georgia, accounting manager salaries tend to be lower as well, averaging $80,000 to $110,000. Managers are able to enjoy comfortable lifestyles in these states without needing as high of earnings.
Salaries also trend lower in other low cost states like Ohio, Pennsylvania, Illinois, and Michigan. $80,000 to $100,000 is typical for managers in these areas. The lower salaries are reasonable given the reduced living expenses.
Additional Compensation
Accounting managers have opportunities to earn compensation beyond their base salaries. Companies utilize additional pay components like performance bonuses, profit sharing, and robust benefits packages to reward and retain top talent.
Performance Bonuses
Performance bonuses incentivize managers to achieve individual and company-wide goals. Common structures include:
- Personal quotas based on specific metrics like revenue growth, cost reductions, accuracy, efficiency, etc. Meeting or exceeding targets earns a bonus percentage.
- Company earnings goals tied to profitability. Managers earn a bonus when the overall business performs well.
- Discretionary bonuses for major accomplishments like landing a big client, launching a new product, or cutting costs.
Typical bonus payouts range from 5-20% of base pay. Some companies offer higher percentages for stretch goals.
Profit Sharing & Equity
Some organizations share profits with accounting managers by:
- Contributing company stock into retirement accounts. This builds ownership and aligns managers with shareholders.
- Granting stock options managers can purchase at a discount or fixed price. Cashing them in down the road provides significant upside.
- Sharing a percentage of overall company profits. Payouts depend on how well the business performs each year.
Equity and profit sharing arrangements help retain long-term managers and promote company growth.
Benefits Packages
Robust benefits packages enhance accounting manager compensation with perks like:
- Comprehensive health, dental, vision, disability, and life insurance to protect wellbeing.
- 401(k) matching contributions, sometimes up to 5% of salary.
- Generous paid time off allowances around 4-5 weeks to prevent burnout.
- Flexible spending accounts for medical and child care expenses.
- Tuition assistance for continuing education and professional development.
Strong benefits demonstrate investment in managers as talent worth retaining long-term.
Hiring & Retaining Accounting Managers
Accounting managers play a critical role in overseeing an organization's financial health and reporting. As such, hiring and retaining top talent in these roles is essential. This section provides best practices for recruiting, compensating, and engaging accounting managers based on competitive market rates.
Talent Assessment & Interviewing
When looking to fill an accounting manager position, focus the interview process on assessing both technical qualifications and soft skills. Key areas to evaluate include:
- Education background in accounting, finance or related fields
- 5+ years managing a team and complex accounting functions
- Expertise in financial reporting standards (e.g. GAAP, IFRS)
- Budgeting and forecasting experience
- Strong analytical and problem-solving abilities
- Communication and leadership skills
Structure the interviews to include situational questions that gauge how candidates have handled prior challenges. Also incorporate technical questions on accounting treatments and standards to confirm their expertise.
Check references thoroughly and have candidates complete working case studies to evaluate their critical thinking. This combination helps determine if a candidate has the right blend of knowledge, experience and leadership potential to succeed as an accounting manager.
Crafting Competitive Offers
Once the right candidate is identified, put together an attractive compensation package to secure them. Research shows the average salary for an accounting manager in the US is $100,481 per year. However, salaries can range from $65,000 for smaller companies to $150,000+ for enterprise corporations.
Tailor the offer based on the candidate's specialized experience, proven capabilities to handle managerial responsibilities, and the competitive landscape. Also emphasize developmental programs, work-life balance policies, and career growth opportunities. These factors often outweigh pure compensation for top performers looking for long-term roles.
Ongoing Engagement & Development
Retaining strong accounting managers requires providing engaging work and development opportunities. Have managers participate in key decisions like technology improvements, process enhancements and expansion plans. This involvement empowers them to shape future growth.
Also nurture talent by identifying high-potential direct reports who could fill future accounting leadership positions. Invest in formal training and job rotation programs to aid their progress. This facilitates smooth succession planning when the time comes.
Proactively discussing career goals during quarterly check-ins enables managers to vocalize their aspirations. Support these objectives to retain your best talent within the finance organization long-term.
Conclusion & Key Takeaways
Accounting manager salaries can vary widely depending on factors like experience, industry, location, and job responsibilities. However, understanding typical salary ranges through proper benchmarking enables organizations to strategically hire and manage costs.
Key Takeaway 1
Accounting manager salaries typically range from $65,000 for entry-level roles to over $150,000 for senior executives, with the average falling around $100,000. Variances depend on responsibilities, team size, years of experience, education level, firm type, industry, and geographic region.
Key Takeaway 2
Conducting careful benchmarking and cost analysis during the hiring process ensures bringing on talent with the right skills and experience needed for the role and business, while keeping overall payroll costs optimized. This allows efficiently scaling the department as the organization grows.
Key Takeaway 3
Offering competitive compensation aligned to market data, combined with professional development and growth opportunities, are key to attracting top talent, maximizing productivity, and improving employee retention over the long-term.
