Holistic accounting – who would’ve thought those two words would exist together but here we are. It’s 2021 and the accounting world is slowly transitioning from grey cubicles to the ‘cloud’. Accounting and bookkeeping might draw up visions of ugly office carpet and fluorescent lighting, but that couldn’t be farther from the truth today.

Businesses are becoming more responsible and intentional, including accounting professionals. There’s a face behind the screen and one that speaks finances in relatable terms. The meticulous and (often boring) data tells a colourful story about a company’s financial health and what we as entrepreneurs need to do to thrive in our industry – which ultimately translates to thriving in our personal life too.

What once was considered an upcoming ‘trend’, holistic accounting is now an established concept that more and more entrepreneurs and businesses are seeking. In fact, the word ‘holistic’ continues to be the most searched term online – much to the benefit of, well, everyone. We as a society are living in quite a unique time where the pendulum of business is swinging from what used to be rigidity and strict company-oriented decisions to a conscious, consumer-oriented operation. Every single business needs to do their accounting and bookkeeping – that will never change. The question is: how are companies utilizing one of the most important vehicles, their finances, for a big picture outlook in 2021 and onwards?

What is holistic accounting?

By definition, the word ‘holistic’ means “observing the parts of something as intimately interconnected and explicable only by reference to the whole.” A common and well-known holistic practice is in medicine, where doctors focus on treating the body as a whole instead of treating just one symptom. To paint the picture of how holistic accounting looks at the entirety of a business, here are a few examples of holistic practices:

• Physicians treating inflammation through a diet and lifestyle change instead of providing pain relief medication.
• Chiropractors adjusting and balancing the entire body rather than only focusing on the area of pain.
• Nutritionists and weight loss coaches identifying food sensitivities, inflammation, and any underlying diseases that can cause weight gain or inability to lose weight.
• Doctors determine sources and levels of stress to establish a mind-body treatment plan.

Similar to the above examples, holistic accountants align the accounting perspective within the company’s overall performance, growth, and health. With traditional accounting, business owners may try to remedy a profit loss or poor financial performance by raising prices or reducing employee hours. Holistic accounting professionals use the numbers to strategize, plan for success, and manage wealth for their clients. Entrepreneurs, business owners, and key managers are better able to understand their financial picture with fewer surprises.

What this leads to? Better business decisions that result in profit, rather than putting a bandaid over the constraints.

What is the difference between traditional and holistic accounting?

It’s no longer about simply entering in data, balancing books, and printing financial statements. Holistic accounting looks at how the numbers align to identify what actions must be taken to meet short-term and long-term business goals. The most significant difference here is that accounting is not done in isolation, but rather as part of the bigger picture.

The holistic accounting approach.

• Accountants and bookkeepers are partners and business mentors.

Holistic accountants and bookkeepers are invested in learning about their clients’ business and act as experienced mentors to help with important decision-making. The role of accounting professionals as business mentors came about as outsourced accounting and bookkeeping became more common. Today, more accounting professionals are entrepreneurs, establishing their own businesses to serve clients. Business owners and top managers count on their team of accounting professionals as trusted partners, working towards business success together.

• Taking advantage of technology to increase efficiency and accuracy.

Accounting software today is more robust and intelligent with automation and the ability to integrate 3rd-party apps. Holistic accounting includes helping clients choose the right tech stack that aligns with business operations. This reduces data entry errors and increases the efficiency of meticulous and repetitive tasks. Here’s just one example of what new accounting technology can do:

Melissa owns a small online store that sells pet supplies. She spends a lot of time doing inventory once a month only to find that what she has on hand does not match up with her numbers. The accounting professional she works with suggests linking a 3rd party inventory app with her QuickBooks Online software. She’s eliminated manual data entry and her stock levels are up to date daily. Melissa is able to make better decisions on what to restock based on accurate numbers and she’s saved hours on manual work. At the end of the month, her store turns a bigger profit.

• Managing wealth to plan for success.

While there are a million and one accounting professionals, few go beyond the deliverables to truly serve the needs of their clients. Traditional accounting can provide us with the data and the numbers we need as business owners. Holistic accounting uses the data to create a financial story that serves as a compass to where we need to go.

We aren’t rocks and our businesses aren’t either – we are human beings that are constantly evolving, changing, and growing. Managing wealth to plan for success means monitoring and adjusting to current needs. Forward-thinking entrepreneurs need a forward-thinking accounting system. Holistic accounting is not just a passing trend, but rather the present and future of business.