Specialization is one way to distinguish your firm from the competition and generate more profitable work. But what should you specialize in? The clues lie in your clients, your market, your areas of interest and your skills. For an overview of the path to specialization, read on.
Accountants are increasingly specializing in response to the commoditization of ‘traditional’ accounting services. First, let’s define ‘Specialization’ as:
Developing and marketing products and services based on specific expertise to create differentiation from competitors and achieve more sales.
In this brief overview, we’ll address important topics for firms on the journey to specialization.
First question is obvious… What can we specialize in?
Some Accountants will prefer to Stay Close to Accounting. This feels like a safe option because we’re developing a specialty derived from our core accounting skills. Here are some examples:
|Management accounting||To use skills in business, planning and strategy to provide specialized, business-specific guidance|
|Financial Accounting||To analyze and report (usually to management who may or may not be ‘financially literate’) on financial transactions that impact business performance|
|Corporate Finance||To enable transactions through capital raisings, feasibility analysis and other advice to increase business value|
|Commercial Finance||To help leadership analyze the operational performance of their business (product success, customer behavior etc.) and take action to increase profit|
|Cost Accounting||To prepare budgets, analyze and recommend on expenses such as labor, materials, shipping and production to maximize efficiency and profitability|
|Corporate Treasury||To ensure liquidity in different business and risk environments|
|Project Accountant||To oversee a specific client project (such as a new product launch) including planning, maintaining budgets, invoicing, collections, approvals, and meeting deadlines|
|Risk Assessment||To help management prioritize and manage risk while capitalizing on opportunities|
|Forensic Accounting||To analyze and resolve financial problems such as fraud, disputes and potential misconduct|
|Internal Audit||To analyze and report to management on specific business areas especially those which are being run in an inefficient, financially risky or even fraudulent way|
|Corporate Recovery||To understand the mechanics of a failing business and get the best deals for stakeholders|
|Assurance||To ensure shareholders’ cash is being put to good use and provide information on their (potential) investments|
|Tax||To offer one-off, or continuing, cost-effective solutions to tax problems while ensuring compliance in an evolving tax landscape|
Another group of Accountants will specialize but Venture Away from Accounting. There’s a huge range of possible specializations but some of the most common are:
Asset Protection, Business Coaching, Business Strategy, Estate Administration, Estate Planning, Exit Planning, Feasibility Analysis, HR Advisory, Information Technology, Litigation Support and Transaction Advisory
Yet another group of Accountants will specialize by Focusing on a Sector (not a skill): Examples include:
Construction, Estates and Trusts, Family Businesses, Government, High Net Worth Individuals, Hospitality, International Businesses, Investors (venture, private equity), Manufacturers, Nonprofits, Professional Services, Real Estate, Retail etc.
Finally, there’s another group who are committed to Staying focused on Compliance. That means getting super-efficient on tax and compliance work so it can scale and realize profits.
Next Question: With all those options, what makes most sense for our firm?
To do justice to this question, we’d need to consider at least three things:
- Your Client Base: There is no doubt SOME of your clients need SOME of the help listed above. But which clients? And how attractive is the opportunity?
- Your Market: What is changing? Economic conditions? Regulatory change? New business opportunities? Change drives opportunity
- Your Skills: Let’s focus on this
Various skills are needed to succeed in any business… but certain areas of specialization will require certain combinations of skills such as:
Technical Skills: Some services require advanced technical understanding acquired through academic or self-study and/or experience. Examples include analytical expertise, numeracy skills, sector experience or detailed knowledge of laws and regulations.
Communications Skills: To varying degrees, Accountants need to work with clients, colleagues, consultants and others. This requires interpersonal skills. A high degree of self-confidence will enable success in negotiation, appropriate levels of sensitivity, discretion, and the ability to convey complex subjects in simple terms, especially to non-accountants.
Business Skills: Some services are suited to Accountants who understand how organizations and markets work… and how they can be improved. This requires knowledge of financial, economic, commercial and organizational dynamics.
A Work Ethic: Some specialist areas require Accountants to work long hours under a high degree of pressure. Resilience is key.
Leadership Skills: In some cases, Accountants need to build teams, manage, inspire, drive decision-making and quickly solve problems.
Creativity: Accountants can be rewarded for examining problems in new ways to arrive at solutions. That means questioning the status quo and using logic to find the best way forward.
So, there’s a starting point for your specialization journey! Narrow in on something which excites you and which your clients need… then commit to it.
Please reach out to Panalitix if you need guidance on the important, strategic initiative of… Specialization!