Driving growth: 5 ways for accountants to successfully deliver business advisory services

Discover why accountants should offer business advisory services and check out the five steps to deliver them to clients.

Your clients want and, more importantly, need more than just an accounts and tax returns service from you.

We’re going through one of the toughest economic periods in decades and many industries are suffering blow after blow. But we’ll make it through this – and businesses will not only survive but thrive again.

That resilience and growth will be largely down to the support that great accountants can provide.

We also know compliance isn’t dead.

Small businesses will always need assurance over the raft of constantly changing regulations and legislation.

But for most accountants, a pure focus on compliance services doesn’t deliver sustainable profitability.

Delivering advisory services to scale generates:

  • More revenue per client
  • Significantly more engaged team members
  • Happier clients
  • Higher profits for the firm.

But, if business advisory is so great, why have so many firms struggled to introduce business advisory services in the past or scale to more than their top 10% to 20% of clients?

In this article, I’ll explore why business advisory has been tricky to scale and how your firm can do just that – drive the growth of not only your client base but your own firm too.

Here’s what I cover:

Better before bigger

Concentrate on repeatable (not bespoke) business advisory services

Business advisory is more than management accounts and cash flow projections

Leverage technology

Don’t prejudge your clients

Business advisory made simple: 5 steps to deliver services to your clients

Delivering business advisory services successfully

Better before bigger works for almost everything in the business of running an accounting firm, not just in introducing or scaling business advisory services.

We’ve all seen it time and time again, where firms get really excited about the possibilities and immediately start thinking about scaling and talking about rolling out firm-wide and to all clients.

It becomes a big task that requires many of the team to get involved.

If it’s not properly planned, with the right people, realistic targets and crystal clear communication lines, the initial excitement can lead to failure.

It can be difficult to recover and get the team onboard for the next iteration or project. Like anything in business, it’s important that we take a step back and plan properly.

Why not start with your own firm first?

That way you can create stories and get buy-in, so you can build a powerful coalition for when you want to rollout.

Next, work with a few clients and get the team involved at the outset. See what works for your firm and what doesn’t.

We know that people don’t like change, so they often devote time focusing on why something won’t work for us, why it won’t work for our clients or why it won’t work here.

Instead, ask questions such as: “If we were to get it to work here, how would we make that happen?”

It’s important that the systems and processes are right for the firm and its clients, the pricing is agreed and tested, the right clients are chosen to start with (pick the easy wins first), clear and achievable targets are set and monitored and a feedback loop is in place and being followed up upon.

So, quite simply, start small, perfect and then scale.

Advisory services are typically delivered by more senior team members (partners and managers) to top clients and often with a bespoke service.

This works well for your top-tier clients, who have specific needs and can afford and are prepared to pay for that type of service.

Senior team members have limited time, so what happens when we try to introduce more junior members to the equation and offer advisory services, using traditional methodologies to our smaller clients?

The more junior team don’t have the experience, and existing systems and processes are still heavily dependent on a time-starved senior team assisting, training or delivering.

Smaller businesses aren’t prepared (or able) to pay the fees associated with a bespoke service.

And often, partners assume smaller businesses, which reluctantly pay for accounts and tax returns, won’t want to pay for advisory services – even though they do pay for coaches, mentors and business organisations.

Finally, there’s also a lack of understanding of what business advisory is, overcomplicating the process or assuming that firing out reports to already overwhelmed business owners is business advisory.

Delivering repeatable advisory services means you can get more of the team involved and can deliver to more of your clients.

Many accounting firms find their average fee per client increases when they offer repeatable advisory services – that’s over both compliance only and bespoke advisory.

By following the repeatable advisory framework I’ve outlined below (see the Business advisory made simple section), you can deliver business advisory services by more of your team to more of your clients, profitably for the firm and at a price your smaller clients would be willing to pay.

Accountants are great problem solvers and often jump straight through to the solution. That’s why we know that management accounts and cash flow projections are important for our clients.

But we rarely take our clients with us on the journey.

We also generally talk a different language to small business owners and often overestimate their skill with numbers.

They don’t want to buy management accounts or cash flow projections. They want more money, time or freedom (or a combination of all three).

We also underestimate our skill at listening and how valuable just being there for our clients really is.

After all, running a small business can be lonely and often business owners have no one to talk to. Friends who are employed don’t understand their issues and challenges.

Business owners don’t want their families to worry and they can’t look weak in front of their successful peers. In addition, they can’t talk to those who probably could help the most – their competitors.

Hiding behind advisory software and sending out reports won‘t make you a trusted advisor.

Imagine what our clients would do if they had clarity? Once we help them get clear on what they want to achieve, our goal is to help them get there.

Almost 80% of small business owners want more from their accountant in the business advisory space, according to an Accounting Today study.

In fact, business owners ranked the following top five features as very important:

  1. Being a trusted advisor (78%)
  2. Responding quickly to their queries (74%)
  3. Understanding their business or industry (74%)
  4. Being affordable (70%)
  5. Communicating clearly with them as non-accountants (69%)

Delivering all five of the above your clients can’t easily be done without leveraging technology.

Throwing more team at the issue, will not solve the cost equation.

But let’s be clear. While technology is not the panacea, it can do the heavy-lifting.

You do need to understand how the right technology can work in your firm, with the right people using the right processes to generate repeatable, consistent, profitable and valuable results.

And using technology in this way, it allows you to do what it will never be able to do.

Be human.

A big temptation in the past has been to judge which clients may or may not be interested in business advisory.

This may have been due to the size of the business, its profits or its cash position.

As their accountant, despite their current situation, you may not know their plans for the future.

The client may be price sensitive and always querying fees. Or they may have never asked for or been interested in any of your services, beyond accounts and tax returns.

It’s surprising, clients who are price sensitive from a compliance perspective (perhaps because they don’t really value that service, even though it’s a legal requirement) are far more open to a discussion on fees when it comes to helping them achieve their goals when they understand the value of what you are trying to do for them.

They happily engage business coaches and mentors, join networking and entrepreneurial growth organisations and pay their fees.

And often these fees are significantly more than they are paying for their accounts and tax returns.

It’s also really surprising that many clients don’t know you offer business advisory services or that you can help them with their business.

This is despite your website, newsletters, leaflets and events highlighting them.

A simple solution is to talk to your clients.

Find out what’s keeping them up at night; what their plans are; what their hopes, fears, challenges and dreams are; and what they want to achieve in their business and life.

Talk to them about what your firm can do to help.

Show the value you can create.

By giving them a quantifiable value proposition, clearly demonstrating what you can do to help and how, you’ll make it easier for them to say yes.

So, what is repeatable business advisory framework and how does a firm implement or scale business advisory services?

The business advisory framework above is the exact same one used by large-scale consulting agencies, Big4 firms, small niche advisory accounting firms and pretty much any other business in wealth management, tax, marketing, branding, time management.

Business advisory really is that simple. Obviously, depending on the size of the client or the size of the engagement, you can go deeper or lighter in each area.

1. Help your clients understand where they are now

Not all of your clients get their numbers. They don’t understand their financial statements.

When they nod at you, it’s usually because they don’t want to appear stupid in front of you. By stripping back the complexity, you’ll make it easier for them to understand.

After all, as Leonardo da Vinci said: “Simplicity is the ultimate sophistication.”

Your team can quickly understand how a client is performing with the 7 Key Numbers that every business owner should know:

  • Revenue
  • Operating profit
  • Cash conversion cycle
  • Business return
  • Gross profit
  • Revenue per employee
  • Core cash target

These numbers give a complete picture of your client’s profit and loss, balance sheet, cash position, efficiency and effectiveness.

These seven key numbers strip back complexity and help your clients to understand the numbers that really matter.

2. Get your clients thinking about what’s possible

Clients rarely take time out to think about what’s possible and where they are heading.

Some clients are bogged down in the nitty gritty and just can’t imagine a different future or path.

The 7 Key Numbers transform into the 5 Levers of Success:

  • Revenue
  • Operating profit
  • Cash conversion cycle
  • Gross profit
  • Revenue per employee

Show you clients what’s possible for their business and how they can get there.

Get them to understand what movements in what levers do to their profit and cash position, and agree a better future.

3. Calculate the gap between where they are now and where they could get to

Accountants are great at critical thinking. Use your skills to help your clients understand the gap and whether closing it is achievable.

You can also help your clients break down the gap between improvements in profit and cash, and understand what levers have the greatest impact on their profits and cash flow.

4. Create a plan

Planning is critical for success. Now, you can leverage technology to create a plan for every single client.

Accountants are great at creating financial plans. But financial plans are useless on their own.

A who/what/when action plan, which relates the levers of success to specific actions and results, creates focus, responsibility and accountability.

Accountability is the secret sauce.

Studies show that small business owners with written goals, and who are held accountable, achieve 78% more.

And finally, if your clients need funding to achieve their goals, you can help them do that.

It’s worth noting that most growing businesses need access to outside sources of finance and investment. They can rarely grow from operating cash alone.

Be proactive in helping them do that, so they get the right finance at the right price.

5. Measure and monitor results against the plan

Nothing in life operates to plan… well, rarely.

Plans need constant review, tweaking and adjusting. It’s easy for accountants to measure budget versus actual results on a monthly or quarterly basis against a rolling 12 month or annualised forecast.

This is probably the most important section of the management accounts and clients can understand variances.

Usually, it’s down to four reasons:

  • The plan is wrong and needs amending.
  • Clients haven’t done something that they should have
  • Clients may have done something they shouldn’t.
  • Or what we all thought might work actually didn’t.

Use meeting and agenda systems to guide and engage your team to deliver the same outstanding results every time.

We’re currently in the midst of a perfect business advisory storm.

With everything going on in the world, businesses are turning to their accountants more and more for additional support.

Just providing a compliance-based service is no longer enough.

Advisory can be fun, interesting and rewarding. But not everyone will have the confidence or interest to be largely client facing.

For those who do and are keen to get under the bonnet of a business and have great conversations, they’ll often see a huge increase in job satisfaction and happier clients.

Business advisory is no longer solely reliant on the partners of the firm.

Leveraging the right technology, with great systems and processes, makes it possible for more junior members of the team to get involved.

And delivering repeatable advisory services in this manner is more profitable for the firm and at a price that small business owners are willing to pay – driving both their growth and yours.

Driving growth: 5 ways for accountants to successfully deliver business advisory services