How to choose the advisory services you should offer to clients

You are far more than just a CPA, EA, or accountant who prepares taxes; you are your clients’ go-to resource when they need critical business advice.

But are you getting paid for it?

In this three-part series, we will look at how you can transform a declining revenue compliance-based business to an increasing revenue advisory-focused business. Here, we will explain what advisory services are and how you should choose the ones you want to offer. Next, we’ll show you how to identify your ideal clients, then close the series by showing you how to market the services you’ve chosen to the select client base you’ve identified.

Let’s get started!

Why advisory services are better than compliance services

Did you know that 86% of small business owners view their accountant as their trusted advisor, not as their “trusted compliance agent”? That means that your clients pay you primarily for advice, not for compliance. Compliance is necessary, but it’s along for the ride and not what you lead with in marketing.

Just as important, the value of compliance-only services is declining. That’s because artificial intelligence (AI) will be handling more and more compliance work. But AI can’t really “think,” so it can’t truly advise. To increase your revenues, not just barely maintain or even lose them, advisory services are fast becoming a “must” offering.

What are advisory services?

Your clients need many types of help. They need to know how to make good financial decisions, how to stay focused on their business, and how to see their business from new and alternative perspectives.

When you offer guidance on these and related areas, you’re providing advisory services—and getting paid for them. This may seem obvious, but it’s not. Most accountants in the tax realm charge only for compliance services, but give away the rest of their knowledge for free . No matter how much value these tax pros add to their clients’ businesses, they charge only for preparing specific tax returns.

A good analogy are professional sports coaches. They show players how to position their body and increase their strength, but also advise the players on associating with ethical people, conducting themselves professionally, and building their reputation. A coach’s value is much more than just ensuring biomechanical precision. Similarly, your value is much more than just ensuring tax returns get filed correctly. 

Those of you who know this are already reaping the financial and career benefits, but now is the time for the rest of you to advance your business to this elite level. You do this by leveraging the skills you already have and getting paid.

Which types of advisory services should I offer?

The biggest surprise is that you’re likely already offering them … but you’re not being paid one cent. Here’s a list to help guide you:

• Tax planning and strategy
• Entity structuring (S corporation vs LLC)
• Officer compensation analysis
• Document processing
• Technology and systems setup
• Payroll setup
• Bookkeeping setup
• Business succession planning
• Cost segregation and economic unit elections
• Tax credit applications (R&D, Employee Retention Credit, and others)
• Captive insurance suggestions and referrals
• Life insurance suggestions and referrals
• Funding or capital raising assistance
• End-of-year review and recommendations
• IRS remediation or mitigation
• Self-prepared return reviews
• And many more

These are options, not requirements. Pick and choose which advisory services to offer; you don’t need to include them all. For example, I used to work at the IRS, so you’d think that I would love to offer IRS remediation services to new clients.

Wrong! 

Of course, I will help my existing clients with remediation, but I don’t use it to market myself. Why? Because I don’t like the work; it can take years before an IRS case is resolved, and I like to give my clients fast, actionable solutions that I can control.

Sounds great Romeo! But … can I really move to an advisory first model?

I’m telling you: Yes, you can! 

But don’t take my word for it. Sean M. Duncan, CPA transformed his practice, SMD Consulting & Accounting, LLC, from compliance- to advisory-focused; he’s also a fellow Intuit® Tax Pro Center author. In five years, he’s gone from 15% advisory to 60%. Geni Whitehouse, CPA, aka The Impactful Advisor, has also cut compliance while increasing advisory.

The real world is telling you: Yes, you can!

So what are you waiting for? Oh, yes, the next two installments in this series:

• Part 2: How to identify your tax planning clients
• Part 3: How to market and brand yourself to new and existing clients

In the meantime, I have some homework for you: Decide which advisory services you want to offer, and come to Part 2 with that list in hand.