Expert Says Specialization Only Option for CPAs
Mark Feinsot combines a former career as a pilot and current work as a CPA to offer accounting and tax services to the aviation industry. That work as a specialist puts him on the cutting edge of a growing trend in accounting: working in niches.
These so-called niche CPAs started showing on the profession's radar screen about five years ago when roughly 10 percent considered themselves specialists, says Erik Asgeirsson, president and CEO of cpa.com, a subsidiary of the AICPA.
According to a cpa.com survey last year, almost 33 percent of accountants now consider themselves specialists or are planning to, and Asgeirsson figures that percentage is even higher.
"In today's world, it's all about providing unique knowledge, owning a specialty", he says. "Technology is commoditizing the generalist." Being a generalist won't differentiate you and that means a tougher time in getting the rates you want, he adds.
New York-based Feinsot, who is still a certified pilot and flight instructor, says the aviation industry uses the same IRS code sections as everyone else, but it's the application of those sections that are unique to the industry. Certain activities and costs can be allowed or disallowed, and you wouldn't know that if you weren't involved in the business, he says.
"The joke I run into is when you talk to a new client or company, the people in the office tell you they have to explain to the accountant how the business runs. But when you have a background in that business, you're more effective and bring more to the table", Feinsot says.
What's more, specialization is all about staying relevant. According to an AICPA white paper by business strategist Geoffrey Moore, "Harness the Power of the Cloud", specialization is one of the profession's three megatrends.
Because of continuing digitalization in our entire culture, business organization is shifting from large integrated corporations "that staff up internally to meet all their requirements to a hybrid global model in which core functions are still done internally but context functions are outsourced to specialist providers", Moore states.
Asgeirsson ticks off a few specialties that are growing: not-for-profits, physician and dentist offices, restaurants/franchise management, start-ups, larger private equity firms, small construction companies and "family offices"—the management of family assets and financial needs.
"And the wonderful thing about the cloud is that you take that [specialty] and go outside your geographic area", he says. In fact, that's one of the biggest changes in the last five years.
Look at it this way: Do you really want to be a generalist inputting data without providing any business insight and data intelligence to your client? Yeah, we didn't think so. Because otherwise, that client eventually will figure that software can do your job.
"This is a big decision for firms to make", says Asgeirsson. "Do they want to be a digital bookkeeper or provide high-value, trusted-advisor services? If they are a generalist, they'll be a digital bookkeeper. If they're a specialist, they can live up to the trusted-advisor mantra."
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.