The role of a business advisor has never been more critical than it is today. As trusted allies, you help your clients navigate challenges, seize opportunities, and expand their businesses. However, establishing an accounting workflow and delivering effective advisory services requires more than accounting expertise. It also involves avoiding common pitfalls that could undermine the value you bring to your clients.
In this guide, we’ll explore the top mistakes that business advisors often make, and how to avoid them.
Whether you’re a seasoned business advisor or an accountant aspiring to expand your horizons into advisory services, this guide will give you the tools and tips needed to deliver exceptional value to your clients. Let’s dive in.
What are Business Advisory Services?
Before we look at common mistakes, let’s start by establishing a definition of what we mean by business advisory services.
Business advisory services encompass a broad spectrum of services. These services include risk management, business strategy, operational improvement, financial management, mergers and acquisitions, and regulatory compliance.
Business advisors analyze a business from a holistic perspective and provide strategic advice to improve and grow the business. Business advisors can be specialists in particular areas, such as financial advisors, management consultants, or IT consultants, or they can be generalists who provide advice on multiple aspects of the business.
Business Advisory Vs Client Advisory Services (CAS)
What are client advisory services and how are they different from business advisory services?
Client Advisory Services (CAS) is a more specific term typically used within the accounting industry. As the name suggests, CAS involves offering advice and solutions to clients beyond traditional accounting services such as tax and audit work. These services may include strategic planning, financial management, operational efficiency, risk assessment, and technology consulting.
While CAS is a subset of business advisory services, the distinction lies in the transition accountants make from purely compliance-focused work (such as tax preparation and financial reporting) to a more consultative, value-added role. Accountants providing CAS become strategic partners who engage with their clients on a more regular basis. They offer proactive advice to help clients improve their financial health, business performance, and strategic direction.
While both business advisory and client advisory services share the goal of improving business performance and providing strategic advice, CAS is a term more specifically used within the accounting profession to describe a shift from traditional compliance work to a broader, more consultative role.
In this guide, we’ll use “business advisor” as a broad term that includes those offering CAS.
Mistake 1: Not Using an All-In-One Practice Management Software
Are you using different software for accounting file sharing, document storage, invoicing, and reporting? That’s a big mistake. As a business advisor, your operations must be efficient, accurate, and quick. Your clients demand it. And if you’re juggling multiple accounting tools, something is bound to slip.Here are 3 common mistakes most business advisors make, and how to avoid them: Click To Tweet
The first thing to fall is your efficiency. Business advisors who fail to implement an all-in-one tool find themselves constantly switching between various tools. Not only does this slow down processes, it can also lead to crucial data falling through the cracks.
Then there’s the next crash victim: accuracy. Accuracy is the cornerstone of trust in any business advisory relationship. You jeopardize your accuracy when you don’t use a centralized practice management platform. That’s because manual data entry across various platforms increases the risk of discrepancies and errors. Unreliable data can misguide strategic decisions and erode the quality of your advisory services and, as a result, your client’s confidence in you.
This is why you need to bring all of your internal operations into an all-in-one accounting platform like Mango Practice Management. Instead of tackling repetitive administrative work on your own, Mango can automate a ton of your tasks. This will free you up to focus on providing high-value advisory services.
Mistake 2: Not Communicating Regularly With Your Business Advisory Clients
As a business advisor, your role extends beyond merely providing advice. You’re an integral part of your client’s strategic decision-making process, a source of reassurance in times of uncertainty, and a guiding force propelling their business forward.
The glue that holds your business relationship together is effective communication.
Clear and consistent communication builds trust, fosters understanding, and ensures that you and your client are always on the same page. Communication is important for building client confidence because it keeps clients informed about ongoing processes and the status of their business affairs. It lets them know that you’re always working, and what you’re working on.
Effective Strategies for Maintaining Consistent Client Contact
A business advisor who is excellent at his job but poor at communicating consistently with his clients won’t find much success. If your clients are in the dark about their business, they’ll start to lose trust in your services.
Here’s how to make communication open and operational:
Discover Your Client’s Communication Preferences
The simplest and most effective way to understand your client’s communication preferences is to ask them directly. In your initial meeting, have a discussion about their preferred methods and frequency of communication. Do they prefer emails, phone calls, video meetings, or face-to-face meetings? How often do they expect updates, or under what circumstances would they like you to reach out?
Note that not all clients may know their preferences right off the bat, especially if they’re new to working with a business advisor. In such cases, offer a variety of communication methods and ask which they would be most comfortable with. By providing options, you’re also demonstrating your flexibility and willingness to cater to their needs.
Then, be sure to pay attention to their communication habits. Clients may communicate their preferences through their behavior. For example, if a client often responds to your emails with a phone call, it could indicate they prefer discussing matters over the phone. Similarly, if they’re more responsive on certain days or times, they may prefer to receive communications then. Observing these habits can provide valuable insight into their preferences.
Set a regular schedule for updating your clients about their business. This could be weekly, bi-weekly, or monthly, depending on the nature of the engagement. But be sure to stick to that schedule, no matter what.
Use Multiple Channels
Offer various ways to meet with your clients. Leverage email, phone calls, video conferencing, and secure messaging platforms (which Mango provides) to keep in touch with your clients.
Offer Friendly, Dependable Customer Service
Effective communication goes beyond just sharing updates and information. It also involves how you communicate. This includes being responsive to client queries, clarifying doubts, and delivering friendly, reliable service. Here are a few tips to achieve this:
Be Responsive – If a client sends you a query or request, respond as promptly as possible. Even if you don’t have the answer yet, acknowledging their request can go a long way in making them feel heard.
Be Clear and Concise – When communicating, especially about complex matters, be clear and concise. Avoid jargon wherever possible and ensure your client fully understands the information you’re conveying.
Be Empathetic – Understand your clients’ concerns and challenges. Show empathy in your communication and reassure them that you’re there to support them.
Be Reliable – Deliver on your promises and maintain consistency in your service. This will build trust and create a strong advisor-client relationship.
Frequent and effective communication is non-negotiable in business advisory roles. By avoiding the common mistake of inadequate communication, you can build stronger, more trusting relationships with your clients.
Mistake 3: Undervaluing Your Business Advisory Services
Step one: Know your worth.
As a business advisor, you add immense value to your client’s businesses. You provide strategic insights, industry-specific advice, proactive tax planning, risk management, and much more. You are an essential partner in your client’s growth. You help them make informed decisions, seize opportunities, and navigate complex business environments.
What’s that worth?
To be honest, the expertise, time, and dedication you invest in each client are invaluable. However, you must develop a compensation structure that aligns with the value you provide to your clients.
This isn’t just about ensuring your financial sustainability. It’s about recognizing your worth and ensuring your clients do, too.
Your pricing should reflect the unique insights, strategic guidance, and targeted solutions you offer. You are not just an accountant. You are a trusted partner aiding in your client’s growth and success. Your fee should echo the critical role you play.
Here are the top strategies for appropriately pricing your business advisory services:
Offer Value-Based Pricing
Rather than charging by the hour, consider pricing based on the value you provide. This involves understanding the potential financial impact of your services on a client’s business and pricing accordingly.
Understand the Market Rates
Research the average prices for advisory services in your region and advisory niche. This will give you a benchmark for setting your prices. Also note that the more experience and specialized knowledge you have, the higher the price you can command.
Don’t Forget Overhead Costs
When setting prices, consider all costs associated with running your business, including software, office space, staff salaries, and training.
Regularly Review Your Pricing
As your expertise grows and the value you deliver increases, your prices should reflect this. Regularly review your prices to ensure they align with the value you provide.
A Cautionary Tale of What Happens If You Undervalue Your Services
Consider the case of an experienced business advisor, Jane, who consistently undervalued her services. Despite her high level of expertise and the substantial value she brought to her clients, her prices were significantly lower than other advisors in her area. Over time, Jane noticed that she was attracting clients who didn’t fully appreciate the value of her services and were often demanding more for less.
Her low prices also left her with less revenue to reinvest into her practice. This limited her ability to grow her business, invest in professional development, and attract top talent. Jane realized that by undervaluing her services, she was inadvertently undervaluing herself and her business. When she eventually increased her prices to reflect the true value she was providing, some clients left, but those who remained were those who truly valued her work. She also started attracting higher-quality clients who recognized the value of her services.
This story serves as a reminder that while competitive pricing can attract clients, undervaluing your services can lead to a clientele that doesn’t respect your expertise. Remember that the price you set for your services sends a message about their worth. Make sure it’s a message that respects your expertise and the value you provide.
Ultimately, your role as a business advisor is to empower businesses to succeed. This starts with empowering yourself. Invest in your tools, nurture your client relationships, and stand firm in your value.
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