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Sharing the Wealth: From Bookkeeping to Advisory

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The time for advisory is now, and bookkeepers have a unique perspective that lends itself to advisory services. At QBConnect's virtual event last week, Carrie Stemke, senior editor for AccountingWEB, attended a panel given by three finance professionals about the strategies bookkeepers can use to create advisory success and ensure a harmonious relationship with clients.

Nov 8th 2021
Senior Editor AccountingWEB
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Frequently, information about offering advisory services is aimed at CPAs, but bookkeepers shouldn’t undersell themselves: They have an incredibly important function and, thus, plenty of opportunities to expand into advisory. At QB Connect’s virtual event on November 4, 2021, Beth Melcher, Jacob Schroeder and Amy Walker, three finance professionals with expertise in working with small businesses, explained how.

Start with two of the main areas bookkeepers focus on: Accounts Payable (AP) and Accounts Receivable (AR). These are areas you work on all the time, said Ascend Consulting CEO Jacob Schroeder. In fact, these can be a good place to start if you haven’t begun offering advisory services and are nervous about doing so.

“Your clients might not know the difference between a balance sheet and a profit and loss statement….but they all want to know how much cash they have to run their business,” said Walker Agency founder Amy Walker.

While clients frequently believe the amount of cash they have in the bank is what’s available to them, bookkeepers know this isn’t true. As an added service to what you already do each week, generate a simple report that covers the book balance and explain to your client what they can really spend, Walker suggested. By helping them plan out their expenses, you’ll ensure their finances stay in the black, help them control their spending and let clients know your true value. 

If you’re already doing this and looking for a way to take it to the next level, Beth Melcher, owner and founder of MoneyFit, suggested generating a monthly cash report. It should include categories like how much operating cash the client is starting with at the beginning of the month, anticipated changes to recurring expenses and how much they estimate will come into their business money-wise. It should also cover other cash demands, like seasonal savings plans. 

After you’ve started giving your clients this report, you’re ready to go a step further than simply helping them plan. Start pointing out and suggesting solutions to problems. Schroeder recommended starting with cash conversion cycles. Is your client acting as a bank to their customers and constantly paying vendors before they receive their money? Or are they in a better situation? Although every small business will have its limits, review different aspects of your client’s cash conversion cycle with them and help them look for ways to improve it. Then, you can help them find additional cash, such as through lines of credit or venture debt. 

“Start developing relationships with partners who can provide these services to your clients,” Schroeder suggested. By doing so, you’ll be prepared ahead of time to offer solutions when your small business owners run into problems.

Schroeder also emphasized the importance of assembling a list of red flags to look for and designating the appropriate advisor to deal with them. This is important whether you work with a team or not, as a bookkeeper might not always be the right person to deal with certain client situations. It’s best to have someone either you or the small business owner can go to if, for instance, the problem is best solved by a CPA or an investment advisor. 

Bookkeepers may be surprised to learn that all three panel experts agreed that the best way to gather and deliver this information and get started with advisory is actually quite simple: Have regular check-ins with each client. How often you meet with them will depend on the scope of the engagement and what’s best for each person, but standing meetings should be part of how you work with your small business owners. These discussions won’t just benefit you: You’ll also get the story behind the numbers, helping you do your job better. 

“Don’t wait until your numbers are perfect,” Schroeder said. Instead, having regular chats and being timely with the information you offer are more important. 

Offering advisory services will also help you overcome barriers with clients who might be resistant to the idea of standing meetings or who don’t see why they’re important. 

“You really have to bring advice that makes them want to engage, and that’s the transition to advisory services,” Schroeder said.

Not everybody will be looking for more than someone who can simply balance books for tax time, but you’ll likely be surprised at how many of your current clients would be happy to get more from you (and will be willing to pay for the added value).

The check-in also ensures you get in front of your client and they don’t just put you out of their mind, said Walker. This is especially crucial during a time where seeing people in person is simply not the norm. Meetings are also great opportunities to get to know your client as a person and vice versa, and relationship building is crucial to success as a bookkeeper. All three panel members agreed that mixing a bit of personal with professional will enhance the value of the conversations and your value in the eyes of your clients.

All three also agreed on the importance of taking notes during these meetings (or right after). Since advisory services are about offering more than just a picture of the numbers, keeping notes about topics discussed, goals your client has, problems they brought up and so on will help you expand on your work. 

“The company is dying to be heard, and...it expresses itself in the language of finance, and the more we can embed what the company is saying into the dashboard report that I’m going to share over here, the more you can help the company owner understand what the company is saying,” Melcher said.

Overall, being a bookkeeper who offers advisory services means working with your clients in a way that shows you’re the authority on financial matters and can present information in a manner that helps the client run their small business. It also means recognizing the scope of your own skills and realizing you won’t be able to assist them with everything, just as you wouldn’t expect your general practitioner to also perform eye surgery. Instead, continue building your network of accounting and finance professionals; that way, when you can’t help your client with something, you can introduce them to the person who can. That’s the secret to offering advisory services: It can be done with the skills you already have; there’s no need to be an expert on everything. 

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