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Why You Should Offer Advisory Services to Clients

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Chances are you're already advising your clients, even if you aren't charging them for this service. That's why growing an advisory practice may be easier than you think. Here, Loren Fogelman discusses the benefits of offering advisory services and explains how strategic change will help you transition to paid advisory services.

Apr 27th 2022
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Advisory services are a hot topic for accounting firms. Don’t overthink whether to offer this service – the unscheduled calls and emails you receive from clients asking for your input is proof that you already advise them. So why not build it into your service offering?

According to Intuit, 74 percent of accounting firms provide tax planning and advisory services, but only 62 percent of those firms receive payment for those services. Before we dive in, let’s define advisory services. It’s when you identify client challenges and apply strategies that contribute to business growth. How does that apply to you? Consider the client journey. 

Perhaps a business owner first meets with you to discuss her accounting and financial challenges. During the consultation, she shares her frustrations, cash flow concerns and time constraints. You explain the process to resolve those challenges. By working with your firm, she has access to up-to-date, accurate financials. This frees up her time and reduces stress. As a result, she can now focus on business development and client services. 

The Hidden Benefits

Your clients are the reason you’re in business. Because satisfied clients turn into raving fans, it’s important to consider the client experience. Advisory services are a strategic way to differentiate your firm. Accounting firms that offer advisory services enjoy these benefits:

  • Your expertise is front and center; it’s no longer taken for granted. 
  • You’re a resource for your clients. 
  • Client meetings position you as a consultant, not a technician.
  • You work with high-quality clients who value your insights. 
  • You now get paid for your expertise. 
  • Consultants charge more than technicians.

As an advisor, you engage loyal clients who respect your knowledge and expertise. Ask yourself how client meetings paired with your accounting services would fit into your business model. 

Your Firm’s Client Experience Strategy

The client experience matters. According to Microsoft, 90 percent of potential clients consider the client relationship a primary factor when deciding whether to engage a firm. Quality clients dislike being viewed as a transaction. I recently asked a group of accounting professionals about services for which they don’t charge. Consults, unscheduled calls and answering questions topped the list. Your insights, expertise and resources, as well as access to you, are important to your clients. Instead of minimizing what’s in your brain, highlight it. Quality clients appreciate your input and guidance. The tactical work is a service you offer, but your expertise is why clients stay with you – and happily pay your fees.

The shift from a traditional service-based practice to an advisory firm is a process. Working closely with accounting professionals on this, we build advisory meetings into packages. And if boundaries are an issue – no problem. Packages set guidelines about how clients communicate with you. Consider the clients who text you on Friday evening expecting an immediate response. This resolves that issue. 

Case Study of Strategic Change 

Recently, while guiding an accountant on how to shift from hourly billing to value-based pricing, we discussed her various services. She downplayed her training in finance and operations. It was time to fix that. With her background as a finance manager for a Fortune 100 company, she’s uniquely qualified to advise clients about money management. 

She enjoys projects which include budgeting, job costing and forecasting. She modestly admitted she typically gives advice for free since it’s easy for her. It never occurred to her that something freely given may be of high value to her clients. She said, “There’s no use sending my clients reports if they don’t know what they mean. Why do the work if that simply ends up getting deleted or never opened?”

During client meetings, she interprets the meaning behind the numbers. Advisory session topics include: 

  • Budgeting
  • Forecasting
  • Tracking KPIs
  • Foreseeing risks 
  • Estimating earnings 

Her clients walk away from those meetings with awareness about their current performance and next steps. Reviewing the numbers has prevented clients from making costly business mistakes. The following is the exact process she followed for adding advisory meetings for her clients. 

Direct Approach

Some clients get intimidated by the numbers and reports. To avoid any glazed eyes during advisory meetings, drill down the information. This makes it digestible instead of overwhelming. How you communicate matters as much as, if not more, than what you say. When discussing hard business decisions, sugar coating or talking around difficult subjects leaves clients confused. Give clients the benefit of the doubt. Being open and frank about difficult topics may not come naturally; however, that skill can be developed over time. 

Clients will come to you because you're the expert with their numbers. Rather than wait for permission, proactively share insights with them.  

Compassion 

Success is messy. Like all business owners, your clients experience ups and downs. You can celebrate their joys along with them. During tough times, however, express empathy instead of criticism.  Do not minimize their experience by telling them to “get over it.” With compassion, acknowledge their perception. Nothing’s all black or white. After a setback, meet with clients to strategically review why things didn’t work out as planned. It’s a way to learn from those mistakes. The insights gained from this discussion serve two purposes. First, this reduces the chances of the same problem recurring. Plus, the review influences a client’s next best move. Sometimes the best opportunities arise after a failure. 

Focus 

Time is valuable. Client consultations, whether in-person or virtual, deserve your full attention. All distractions should be turned off or silenced. This includes emails, phone, background music, etc. Body language, tone of voice, eye contact and movement show you're intently listening. 

Clients will stick with you because you help them apply the numbers for strategic growth. By bringing your expertise front and center, you'll discover renewed enthusiasm. Partnering with clients for success adds meaning to the work. 

The Advisory Edge

The transition from compliance to consulting is a paradigm shift. This highlights what you know rather than what you do. 

First, answer these questions. 

  • What’s your expertise? 
  • How does this benefit your ideal client? 
  • What is your client experience like? 

Next, create packages which include advisory meetings. Then, shift from hourly billing to value pricing. Finally, get ready to attract clients who appreciate your insights. The move from technician to consultant will challenge your current beliefs and values. Confidence is often the biggest roadblock. Is your mindset onboard? The advantages of advisory services extend beyond the obvious. Is it worth the effort? Absolutely!  
 

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Theo L. Morson, JD, LLM
By tmorson3
May 6th 2022 01:01 EDT

Loren,
This article is right on time. I recently started charging for my time on the accounting side of my practice. The response has been a little mixed. I will say that the number of calls seeking free advice have stopped which certainly frees up my time.
T.L. Morson and Associates, PLLC
www.tlmorson.com

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