Why Accounting Firms Are Shifting to Advisory Services (and How Your Firm Can Too)
Tax season is hectic, stressful… and a key source of annual revenue for accountants. So much so that it’s easy to forget that taxes aren’t the only game in town for accountants. If you’re feeling burned out on 1040s or just ready to explore a different option, getting into advisory services is a smart option.
Advisory services is a pretty big umbrella, encompassing any client work that doesn’t fall under core compliance. And the accounting firm industry as a whole is moving toward them: nearly 80% of accounting firms are planning to offer advisory services in the near future.
Common advisory services for accounting firms include:
- Business planning
- Tax audits
- Financing and loan operations
But why the change? Here are a few reasons the industry making this shift—and why your firm might consider it, too.
Build lasting client relationships
Accountants don’t just enjoy working with numbers—many enjoy the relationships they build with clients over the years. But when your accounting firm focuses primarily on tax services, the churn of clients can make it hard to establish a meaningful rapport with them.
Enter advisory services. Advisory services expands the range of what you can offer clients, allowing you to nurture your relationships. You may take on fewer clients, but the ones you do have will be more meaningful and profitable.
Provide holistic services for your clients
Accounting impacts all aspects of business operations or an individual’s life. Clients want a firm that knows their greater goals and can help them achieve them. When they have an accountant they can call on with a financial question or concern—not just around tax time—you help reduce their stress and make them feel more secure.
This is where you can put advisory services to use. Building on solid relationships (see above), you can better identify your clients’ needs and position your services as a solution to them.
And the better you relieve your clients’ stress, the more they will sing your praises to their friends and bring you referrals, helping you grow your business.
What’s more, since the Covid-19 pandemic, people have turned to online services in all realms, including accounting. Advisory services can be easily facilitated through virtual consultations.
Improve your work-life balance
Tax season burnout is a huge issue in the accounting industry, and advisory services offer a change in lifestyle for accounting firms.
Imagine not having to work 50-80+ hours a week during tax season just to stay afloat. You can retain tax clients based on your business goals, but ultimately, adding advisory services will allow you to increase your work during the rest of the year.
Plus, the work done in advisory services doesn’t require you to be in your office like compliance work. Take your laptop home and use cloud-based services to work from a favorite coffee shop—or even as a digital nomad. A more flexible lifestyle for your employees will help avoid the accounting industry burnout that causes poor performance and health issues.
Expand your accounting firm’s income
When accounting firms offer more client advisory services, they’re able to charge more for the work completed. This is especially true if you offer value-based billing. Because your expanded knowledge gives your clients better results, you can bill more for each bit of work done.
And because you’ll have more work per client, you can pass off easier tasks to junior members of your team. They can capably handle bookkeeping, invoicing, and other standardized tasks so your higher-level accountants can hone in on advisory services, which bring in higher profits.
Growth opportunities for professional development
76% of employees are looking to expand their careers, and offering more services allows them to learn new skills to add to their professional portfolio. When accounting firms make the switch to advisory services, employees benefit from learning the new skills required.
Once accounting firms start to offer advisory services, team members will need to learn new problem-solving skills, including:
- Big picture strategy to find creative solutions
- Research skills to evaluate your client’s industry and market trends
- Critical thinking to turn trends into standardized solutions
- New interpersonal skills like active listening, increased empathy, and persistence to find the root of clients’ issues.
Four tips to succeeding at advisory services
Advisory services take time to implement, and the sooner you begin, the sooner you can develop the tools needed to succeed. Here are four tips to get started with advisory services.
1. Start small
You’ll need to start your client advisory services with general reporting and attestation services. This includes outsourced accounting work like general ledger balance and cash reconciliation. Only once you’re comfortable with these types of tasks should you move on to more complicated advisory work. And be patient: it can take several years to establish robust client advisory services.
2. Identify the right niche for your services
Advisory services, as we mentioned before, is a big umbrella. There are a lot of areas in which you can specialize. But remember, your clients want people who are experts in their field. Take the time to invest in learning industry-specific processes, risk factors, and Key Performance Indicators (KPIs). The insight you gain will ultimately help your accounting firm stand out from among its competitors.
3. Adopt a culture shift
When you move into client advisory services, you may need to make some changes in your workplace culture. Instead of refining tried-and-true processes, team members should look for new opportunities for your clients’ business to expand. And instead of thinking that all their work will be tied to tax season, set the expectation that work will be busy year-round—but at a more manageable cadence than the non-stop pace of tax time.
4. Develop the skills needed
Commit to training your employees in the skills they need to provide advisory services. Considering incentivizing staff with tuition reimbursement for relevant college courses or investing in necessary corporate training.
5. Invest in reporting and analytics software
To make the leap into advisory services, you need to be on board with the newest technology that can help identify your ideal clients. Robust client reporting software outlines which of your clients bring in the most revenue, so you can identify your niche and maximize accounting firm growth.
Let Mango help you transition into advisory services
Mango Practice Management can support you with the transition to client advisory services. Our comprehensive dashboards help you identify your most profitable clients and service areas, making it easy to pick the right niche for your firm.
And when you use our time-tracking software, you can easily monitor your billable and non-billable time to see if you’re on target to meet your profit goals. This helps you plan out your work week and see where any time is being misspent.
Expanding your services can be a significant step for your accounting firm, so schedule a demo with Mango Practice Management to see how our comprehensive accounting practice management tools can help you move in the right direction.
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