Your car's fuel gauge reads empty and you need to find a gas station. Despite BP's new ad campaign or the magazine article you recently read about ExxonMobil's efforts to "go green", you still stop at the station with the cheapest gas prices. This scenario illustrates how customers evaluate pure commodity products (like gasoline) and choose the service provider primarily on a price basis. Simply put, when the competitors offer the same product, lowest price almost always wins.
Just like the gas stations in the example above, accounting firms operate in a highly competitive market, and if your firm only offers commoditized services like tax preparation, payroll, and bookkeeping, you'll win (and lose) customers due to price competition. The good news is that you're in a unique position to offer value-added advisory services.
According to USA Today/Gallup polls, accountants are considered the most trusted business professionals. That high level of trust enables you to move beyond traditional accounting services and position yourself as a trusted advisor. Offering quality advisory services will ensure the long-term success of your clients.
What's in it for you?
Helping clients do better business is always a win-win situation, but in particular, there are three primary reasons why firms are shifting toward value-added advisory services:
1. Increase firm revenue. Business advisory engagements produce additional revenue streams and are more profitable than traditional, compliance-based accounting services.
2. Stop competing on price. Firms that bring more to the table can justify higher rates. Stop leaving money on the table, command the rates you deserve by offering a higher level of service, and land more "A-List" clients.
3. Deepen client relationships. Help a client do better business and you lock in a client for life. Quality advisory services help you forge deeper relationships with clients and also boost word-of-mouth referrals.
Shawn Moriarity is a senior consultant in the Accountant Services Group at Sageworks, a financial information company and provider of financial analysis software to accounting firms and private companies. Moriarity has worked with thousands of CPA firms to implement Sageworks' financial analysis software ProfitCents for standardizing and documenting regulatory requirements and adding value to client relationships while increasing revenue.