How to pick an industry specialization as an accountant
I feel that something that is not talked about often enough among younger accountants is the idea of industry specialization. While most people I speak with have a vague idea of an industry they would like to specialize in, they typically aren't able to explain why they are so fond of it. Today, I'm going to break down everything you need to know about industry specialization as an accountant with 10 or less years of experience.
What is industry specialization?
Industry specialization is exactly what it sounds like. It's the idea that the accountant is going to primarily serve clients in a given industry as they gain the specialized industry knowledge and expertise needed to better serve them. While it is crucial to have a strong foundation of debits and credits for every industry, many industries have established interpretations of accounting guidance and tax regulations that familiar practitioners can use to their advantage. Most of the time, this experience is a great selling point for new clients in the accountant's established industry.
Why do accounts specialize in certain industries?
Every account will give you a different answer to this question. Here's a few potential reasons why an accountant might specialize in a given industry:
Personal interest & fulfillment - some people have a personal connection or interest in the industry that they specialize in. Personally, I just know some people who love working with nonprofits so that's why they chose to specialize in nonprofits.
Money - a lot of accountants choose to specialize in certain industries because that's where the money is, and they know that they can make a lot of money in that industry if they become an industry expert.
Necessity - it might have been the accountant's only viable option based on the companies that work in their geographic area.
Do I have to commit my career to a single industry?
Absolutely not! It's important to remember that you can be an industry expert without being an industry specialist. A lot of accounting problems can be solved by just understanding how debits and credits work, and the industry specific problems just build on that foundation with some common fact patterns and interpretations.
Many accountants, myself included, prefer to work with a variety of clients and industries as opposed to just one. This means putting in some extra work to understand the intricacies of different industries in order to serve the broader range of clients. This means that I am able to solve my clients problems most of the time with my deeper than surface level knowledge of their company and industry. For the services I perform, this diversification is a competitive advantage because the experience lends itself to more nuanced analysis.
What are some examples of industries that I can specialize in?
There are a countless number of industries that accountants can specialize in, and there are new ones popping up every day! Here are just a few examples of industries that currently exists in the United States:
Government Contracting
Nonprofit organizations
Technology
Oil and Gas
Financial institutions
Construction
Real estate
Healthcare
Hospitality & restaurants
Retailers
Food and beverage manufacturing
Automobile manufacturing
Music and entertainment
Film and television
Gaming (Casinos)
Each one of these industries comes with a separate set of industry standards and regulations that need to be understood.
How can I choose the right specialization for my career?
As always, the answer to this question is "it depends." Typically, the choice of which industries you specialize in depend on the following factors:
Interest: while you don't need to find a job that fulfills all your life's purpose, it needs to be interesting enough for you to tolerate for at least 40 hours a week. For this reason, it's important for you to find industries that you are at least remotely interested in or can tolerate for that time period. Personally, I think the idea of dealing with healthcare bureaucracy and insurance is worse than pulling teeth, so I wouldn't specialize in healthcare companies.
Geography: Can you find a job in this industry close to where I want to live? For some industries, it can be very difficult to find a job outside of a certain geographic area where the industry companies typically exist. This is especially important once you consider the idea of switching employers. You don't want to be specialized in a certain industry where there's only one employer in your area.
Money: depending on your goals, the amount of money you can make working with a certain industry can certainly be a factor in your choice of specialization.
With these factors in mind, I challenge you to ask yourself this question:
In terms of accounting specialization, what industry or group of industries will provide me the best quality of life based on a combination of my personal interests, my desired living situation, and my long term financial goals?
Everyone's answer to this question will be different, and it's important to consider the right balance of those priorities. Some people will care about their geography more than their interests or the money, while others might not care about money or geography so long as they are fulfilled at work. When you ask yourself this question, it's important to be honest with yourself and understand that things can change as you grow older and gain experience. Think long and hard about the benefits and the cost of this decision, and do your best to pivot when the time is right!