Within the accounting industry, there have been innumerable debates over whether specialist or holistic accounting is the best.
Unfortunately, we don’t have the answer. However, in this article, we aim to help you understand the benefits and drawbacks of each option, allowing you to make an informed decision on which route is best suited for your firm.
The term “holistic” has its roots in the practice of holistic medicine, where physicians focus on treating a patient’s entire being, such as mental and social factors, rather than just the symptoms of an illness.
Similarly, holistic CPAs perform an array of accounting functions, considering many aspects of a client’s overall financial health and performance in order to provide enhanced client service.
Holistic accounting may not be appropriate for every firm. We’ve outlined the pros and cons of investing in holistic accountants below to help you determine whether they are the right choice for your firm and your clients.
1. A Larger Market of Opportunity
Investing in holistic accountants opens your firm up to a broader market of opportunity, as you’re not restricted to a defined market segment or service.
2. Better Client Relationships
A holistic accountant goes beyond the figures on a spreadsheet to familiarise themselves with the business, its leaders and their aspirations to ensure the company is always moving in the right direction.
By fundamentally understanding the ins and outs of the business, a holistic accountant is able to forge stronger relationships with clients. Instead of focusing on a specific back-office task, they act as a strategic partner, offering tailored advice depending on the client’s individual needs.
3. An Extensive Knowledge Base
By including holistic accountants in your firm, you can ensure that your clients will have access to a wealth of knowledge in various areas. By confidently answering clients’ questions in a range of areas, you can quickly build up a reputation as a trusted firm.
1. Sacrificing Depth for Breadth
Despite a holistic CPA having varied knowledge in different areas, it may not be as in-depth as that of a specialist. For example, a holistic accountant may falter when it comes to a niche question on cryptocurrency.
2. No Differentiation in Your Services
The high streets and the Internet are flooded with accounting firms. In a highly competitive market, a generalist accounting firm could struggle to attract clients without a Unique Selling Point (USP).
Securing a healthy portion of the market as a holistic firm requires a comprehensive marketing strategy, impeccable customer service and reliable client referrals.
A specialist accountant is one who offers a specific service or works in a specific industry. Unlike a holistic accountant, their expertise is concentrated as opposed to wide and varied.
Examples of accounting specialisations include:
- Forensic accounting
- Tax accounting
- Financial reporting
Honing a particular accounting specialisation can help attract “ideal” clients to your firm. Discover the advantages and disadvantages of hiring specialist CPAs below:
1. Helps Prospects Find You
If you have a specific department focused on a particular financial aspect, you may find it easier to gain clients. For instance, somebody looking for a tax expert may find it more reassuring when you advertise “a dedicated tax team” compared to a generalist accounting firm that promises to “handle every accounting need”.
2. Get Expert Status
Your company won’t be just another accounting firm. Instead, you will be considered an expert, which can help attract profitable clients and drive revenue. In addition, if you become a specialist in a niche area such as tax accounting for real-estate businesses, you can afford to charge a premium, as businesses looking for an expert are often willing to pay more.
3. Helps You Stand Out from Competition
Concentrating on an accounting specialisation gives your firm a USP — which is growing increasingly important in such a highly competitive market. By highlighting your USP in marketing materials, you may also find that you attract more of the “right” clients, which can go a long way to building a loyal customer base.
1. Limited Client Pool
Investing in specialist CPAs may limit you to a smaller customer base. Therefore, without an appropriate and robust marketing strategy, your firm may struggle to attract enough clients. A holistic firm, on the other hand, can rest easy knowing that they have no limitations in the potential clients they can target.
2. Some Accounting Specialisations Could Become Obsolete
There’s a risk that machines and automation could make certain accounting specialisations, such as bookkeeping, obsolete. As a result, specialist CPAs would need to retrain, which can be expensive and time-intensive for the firm.
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