How to transform your firm into a true advisory
The next phase of accounting – where accountants become true advisors to their clients and not simply data hoarders – is very much underway across the industry. But it’s often difficult to know exactly where to start, and what changes to make to help that transition. Having made that change myself in recent years, with a practice of 150+ business clients and growing, here are some practical tips for any firms looking to fundamentally change the way they approach advice.
Let the technology do the heavy lifting
The great thing about modern technology is that while it has disrupted our industry to some extent, it has also made advisory services from accountants more accessible to small businesses. Your advisory division must leverage technology to make it scalable and profitable – put simply, you need to automate as much of your practice as possible.
Cloud accounting and reporting systems can surface data and results in ways we’ve never seen before, allowing accountants to generate the reports they need in minutes. That leaves the rest of your time to actually spend with your clients, rather than fiddling with data, helping them solve their problems and make the data-driven decisions they need to grow their business.
You’re (probably) already providing advisory services
Providing advice is nothing new to accountants, even for those of us who have been largely focused on tax. Clients have always come to us for ad-hoc advice, by phone or email. This is the starting point for any firm looking to transition more heavily to advisory services; look at the common areas you’re already providing advice on, and where you have specialist skills or expertise that differentiate you from other accountants.
Once you know your strengths, think about how you can make these tangible services that a client can understand and purchase. Determine and articulate your services’ value. For example, my clients often ask me how they can streamline their business, which led me to focus on providing advisory solutions around systems improvement across a client’s workflow. Remember, it’s not just about key performance indicators and forecasts. Focus on what will add value to your clients, which is what advisory services are all about.
It’s an education process
One of the most challenging parts I encountered when transitioning my practice, is educating clients on what the advisory process actually involves. When I urge my clients to look closer at key parts of their business, I’m often faced with the Aussie adage “she’ll be right, mate”, meaning they don’t immediately understand why they might need that advice in the first place. Spend time working with those clients that you believe will benefit most from your advice, and help them understand where it will add value to their business. Ultimately, they need to buy into and believe in the process for it to succeed.
Ask the hard questions
Advice isn’t just about the graphs and trend reports. Your client knows what makes their business tick. Don’t fall into the trap of trying to implement a ‘one size fits all’ approach. While you can (and should) leverage technology to automate reporting and some responses, it only becomes valuable if the information is then acted upon through your client’s business.
You can only achieve this if you ask them what information they need in the first place. If they ignore your reports and still run their business based on their bank balance, you are not helping them solve their problems. Just this week, a client of mine said they weren’t using the monthly reporting data I was giving them, because they wanted it in a more concise format. Having that information means I can tweak the reports and processes I use for that client to ensure my advice is actually having an impact. In effect, your advisory process will need to constantly evolve to meet the needs of your clients.
Start small and build your expertise
Introducing advisory services is no different to launching any new product or service. I have been perfecting my model over the past few years. Pick pilot clients to trial the new services, and be prepared to invest time and resources for no or reduced fees, allowing you to tweak the model using their feedback. This pilot process has been invaluable in understanding what works and what doesn’t, and what adds value to my clients rather than what I think they need. Focus on providing services that solve your client’s problems and you will be onto a winner.
Commit to investing the time
None of us would have become accountants without investing significant time into study and practical learning. So it’s no surprise that introducing advisory services requires setting aside time to educate yourself and your team on how to deliver those services. It’s less about spending time on getting the numbers into the right format — the technology will do this for you — and more on the cultural and business impact that your advisory services will have on the firm.
Compliance services will always be necessary, and no doubt will be a part (significant or minimal) of many firms’ revenue streams for years to come. In reality, there is no right or wrong on which products or services a firm provides. However, those accountants that want to move into this advisory space have arrived at the best possible time in our profession’s history to do so. It is not a huge mountain to climb, as some suggest, and with some concerted effort and focus, this can become a profitable and important part of your firm’s service offering.