Generalist vs. specialist accounting—what are the distinctions and advantages to a particular accounting style?
Hosted in partnership with CPA Academy, our webinar “Should Accountants be Generalists or Specialists? (Maybe You Chose Wrong),”provided an in-depth look at different focuses of accounting. You can check out the full webinar here, which is loaded with information explaining the difference between accounting generalists and specialists, along with insights that will aid the development of your career.
The two presenters included our very own Caleb Newquist, Editor-at-Large at Gusto and the founding editor of Going Concern, who shared his CPA expertise.! Alongside Caleb was Greg Kyte, named to Accounting Today’s list of the “Top 100 Most Influential People in the Accounting Profession.” Greg is the founder of Comedy CPE, which offers professional development with a comedic twist. Greg shared his opinion on specialist accounting vs. generalist accounting.
Specialist vs. generalist: what’s the difference?
There are two primary frameworks that contribute to the main structure of accounting professionals: generalist and specialist. Generalists focus on various aspects of accounting, which allows them to provide services for a broad spectrum of clients. Specialists, on the other hand, pinpoint particular areas of expertise to offer tailored services to their customers.
During this article, we will unpack these frameworks in more detail.
What is a generalist accountant?
Generalist accountants choose to paint broad strokes with their expertise by working within many different areas of their field. Many times, they are perceived as someone who simply did not delve deep enough into accounting to develop a specialty. However, Greg and Caleb redefined this idea by highlighting the value of the holistic nature of the generalist accountant.
“When we talk about generalists, we’re talking about someone who has very intentionally pursued becoming well-versed in a lot of different areas in accounting.”– Greg Kyte
In their opinion, a generalist accountant is familiar with every aspect of accounting rather than just one feature. This method allows them to be well-rounded in their knowledge of accounting, which in turn enables them to be self-reliant in a variety of areas.
“If you’re a generalist, that means you are the go-to person for virtually everything, except when an expert is needed.”– Caleb Newquist
This view promotes the idea that one can be an ”expert generalist.” One prominent supporter of the expert generalist school of thought is Ed Mendlowitz, who Greg cited in the webinar. Ed defends his position with examples from his career. During his time in accounting, he has been a tax partner, audit expert, and performed peer reviews before the U.S. Tax Court. Mendlowitz is also one of the very few people who hold all five AICPA professional designations: PFS, ABV, CFF, CITP, and CGMA. Because of this well-developed skill set, he rarely needs specialists to aid him in his work.
“I worked hard at maintaining my skills, and I was able to recognize when I needed to bring in an expert, it wasn’t that often, but often enough to make me feel like I wasn’t shortchanging my clients by trying to do everything myself.”– Ed Mendlowitz
Generalist accountants position themselves in a way that allows them to cover a wide variety of clients. Many of these clients originate in the realm of small business because an in-depth, pinpointed approach to accounting is rarely needed while advising small businesses.
“The great thing about being a generalist is that you can serve a much, much broader section of the market. The vast majority of accounting customers, of accounting clients, don’t need an expert. They’ve got problems, they’ve got issues that can be solved by an expert generalist, not by a specialist.”– Greg Kyte
What is a specialist accountant?
In contrast to generalist accountants, specialist accountants choose to focus their work on a narrower, more detailed area. By focusing on one area of expertise, specialists acclimatize their accounting strategy around a particular facet of the occupation rather than accounting as a whole.
“A specialist obviously has a focus area of expertise. And your expertise is more than just, ‘I’m in the tax department.’ I think if you’re a specialist, it’s not just, ‘I do tax, I don’t do audit. So I’m a specialist.’ No, it needs to go deeper than that.”– Greg Kyte
One’s specialty varies according to personal interest. Many decide to dive into particular services of accounting such as tax or audit, while others may partner with clients from specific industries.
One prominent example of a specialist accountant is Daniel Morris. Morris defines himself as the “Chief Dragon Slayer” of his firm who provides, “creative, cross-border solutions in an ever-changing and complex world.” His enterprise, Morris + D’Angelo, defines itself as a “boutique firm supporting the sophisticated needs of high-net-worth families and their related entities,” and they focus on large, international issues. This specialty gives Morris the ability to work in an area he is passionate about and choose the “dragons” he wants to slay.
By choosing a particular field of interest, specialists create highly marketable business models. This focused approach draws in specific clients because they are already searching within that area of expertise. As a specialized accounting firm continues to grow, its reputation and knowledge also draw in customers.
“When I think of expertise, I think of developing a reputation. If you’re considered an expert, you’ve developed the knowledge of what you do. It precedes you.”– Caleb Newquist
Caleb paralleled accounting specialists to owning a content studio in the realm of income.
“I had a content studio for about five years where I would take on clients and help them come up with strategies around content and also create content. But essentially, I had people coming to me. I really didn’t have to go searching for business because people were able to find me because it was a rare thing that I did, and it was something that a certain number of people were looking for and willing to pay for. And so, I think that’s where expertise [wins] — I would say the reputation precedes you in a way that it isn’t necessarily going to do for a generalist.”– Caleb Newquist
Choosing to focus on one part of accounting allows specialists to surround themselves with interesting work. Over time, interest fosters a passion for their business and clients. This passion becomes the drive to excel in their field and promotes growth.
Passion in specialist accounting and flexibility in generalist accounting
For many, working in a specialized field leads to a passion for their work. Both Caleb and Greg agreed that passion may not exist at the beginning of specialization, but is found throughout the development of the individual as they explore their field.
“Is it essential to becoming a specialist who loves their specialty? I would say not necessarily. I think where I land is that passion can come later. I think it’s something that you can discover along the path of something maybe you just stumbled upon. And it isn’t a prerequisite for being a specialist. I think it can be developed as time goes on.”– Caleb Newquist
All in all, generalists and specialists create a symbiotic relationship within the world of accounting. One style chooses to embrace the entirety of accounting, while the other focuses on a deeper understanding of a specific aspect of the industry. This relationship facilitates variety, which can cater to the needs of specific clients.
If you would like to dive deeper into this topic, watch the full webinar here. Also, be sure to check out Part Two of the CPA Academy webinar “Should Accountants be Generalists or Specialists? (Maybe You Chose Wrong)” for a continued look into the world of specialized accounting and guidance into choosing a specialty.
Here at Gusto, we partner with accountants by providing tools and courses to grow your firm regardless of specialty. These resources will help you journey beyond accounting and into people-focused advising. Feel free to look into our offerings and check out our blog for more insights into this rapidly evolving industry.