Advisory Services
Advisory Services

Shifting your practice from compliance to advisory

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Tax practices are primarily built on the premise that all people need tax advice to file tax returns. This is also known as tax compliance. Many firms have tried to push for a focus to move away from compliance and into advisory. Even within other audit CPA firms, most are moving away from traditional audits and moving toward building value through outsourced CFO services or monthly/quarterly reviews. Here are several tips that can help you shift your practice from compliance to advisory. 

Understand there is little value in tax compliance services

If you are preparing tax returns, your clients are coming to you because they see the value in having your name on their tax returns. But there is very little value in putting last year’s numbers on last year’s tax forms. To shift from compliance to advisory, you must change your mindset. Your focus should shift from “How can I find more business clients?” to “How can I advise my current and prospective clients on issues happening today?” However, many firms are stuck with working overtime trying to figure out what happened in 2021 for most of their clients, during the 2022 tax season. The shift needs to be you figuring how to help your clients on 2022 issues while still in 2022.

Fire problem clients

You will also need to understand that tax compliance is a roadblock to what you are really aiming to do. Some practitioners continue to serve lower-value customers who take away precious time from focusing on higher­-level opportunities for advisory. In addition, staff can become disgruntled and frustrated servicing these clients. In order create capacity for advisory, you must rid yourself of clients who don’t add value to bringing you toward an advisory practice. What this could look like is you writing a letter after their tax return is prepared for the current year to notify them of the change in the direction your firm is going, and providing them resources to help them transition well to the next tax preparer.

Create service packages that focus on advisory first, and compliance second 

If your goal is advisory, then you need to be onboarding only new clients who fit into your specific niche of advisory. Every new compliance-only client takes you away from opportunities to expand advisory to your top clients. Some examples of what this can look like is creating barriers to entry by offering service packages that include annual, quarterly, and monthly financial statement reviews and tax planning opportunities throughout the year, not just at year end. Some packages could also include moving ERP consulting and OuickBooks® Online training. These packages would follow a monthly subscription pricing model based on a fixed fee, opposed to an hourly model. Included in each of those packages is the tax compliance piece (tax preparation), but it’s not the main piece you are selling.

Automate the redundant compliance tasks by embracing technology 

With the rise of technology with artificial intelligence and machine learning, the goal is to simplify your practice, standardize the right tech stack, and automate everything you can, including tax preparation. There are many different tax software programs that can scan tax documents, use optical character recognition technology, and automate your tax return preparation. When staff are preparing tax returns, there is absolutely no value when they manually enter in a W-2 or 1099-B. In addition, there is no value for a manager to input a balance sheet and income statement for business returns. If you can leverage technology to automate the boring and redundant tasks, then you can focus on what truly matters, which is value to the client.

Develop a niche 

If your practice started out in compliance, chances are you have a broad client base as it relates to industry and size. Most practitioners operate as generalists, providing accounting and tax-related services that are focused on their unique clientele. But if you specialize and focus in on a niche, you can create a much deeper knowledge base within that niche to be able to provide peace of mind in ways a generalist can’t offer. In addition, you can market yourself as a leading expert in niches such as real estate or cryptocurrency, which will help the right clients find you and filter out the clients you shouldn’t be serving.

Compliance still has its place 

Tax compliance is still the gateway toward advisory. But tax compliance can become a hindrance to advisory if it’s not put in its proper place. If those prospective clients don’t see the value in the direction you are wanting to move your firm, those shouldn’t be the clients you want to serve. In order to move toward advisory, you will have to embrace change. For information on how to get started offering tax advisory services, check out lntuit’s Path to Advisory Guide.

Intuit Accountants Team

The Intuit® Accountants team provides ProConnect™ Tax, Lacerte® Tax, ProSeries® Tax, and add-on software and services to enable workflow for its customers. Visit us at, or follow us on Twitter @IntuitAccts. More from Intuit Accountants Team

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