Creating capacity in your firm for advisory accounting

Modern accounting firms are leveraging technology to automate repetitive data entry tasks so they can focus on becoming a trusted business advisor, more commonly referred to as an advisory accountant. Firms that have successfully adopted a consultative model have systematically implemented advisory workflows that free up resources and staff through automated and standardized processes, and bundled services.

However, while many articles describe the growing need for advisory accounting and profits associated with it, I have yet to read stories by firm leaders that describe the real-world challenges they encountered as they transitioned to a consultative model. Although my firm has taken steps to transition to an advisory model, we’ve wrestled with how to create the necessary capacity. I hope that describing the capacity challenges I’ve faced will inspire and guide other firm leaders who are exploring, or in the middle of transitioning to, advisory accounting.

Capacity planning is essential to an advisory model

As you likely know, the advisory model consists of closely aligning yourself with your clients to provide valuable advice on their operations and critical decisions. Determining the resources required to manage your existing service offerings, while you transition to advisory accounting, is vital. Common strategies for resource allocation for this transition include hiring more staff, decreasing workload through automation and updated technologies, and streamlining processes. Whichever tactic is most appropriate for your firm, note that the end goal is to free up time for you and your staff so you can become a source of informed advice for your clients.

When, and how, to hire additional staff and vendors

If you’re a smaller firm, you may be hesitant to hire additional staff to handle operations while you oversee your firm’s transition to advisory accounting. Since I struggled with this in the past, I completely understand this hesitation. I preferred to limit my firm’s staff and other resources to exactly fit our needs – and nothing more. As we’ve grown, however, I’ve realized the value and importance of a good hiring strategy. When my staff was maxed out or operating at 120 percent capacity, we often had to turn away new clients during tax season because we could not onboard them. Fortunately, we’ve since added new people to our staff, so we are better prepared.

Here are some signs that you should hire additional staff:

• You find that you’re unable to meet the needs of your clients.
• You lack the necessary staff to onboard new clients.
• You and your staff feel burned out because of constant overtime.
• You or your team are working in areas that aren’t best suited to your skills.

As you develop your hiring strategy, outsourcing administrative and procedural tasks such as answering phones and managing technology to affordable, well-trained third-party vendors may be worth your consideration. Outsourcing administrative tasks allows your existing team and new hires to focus on your core service offerings and client interactions.

As you research and consider your options, here are some best practices to ensure you pick the best fit for your firm:

• Define your business needs, and the criteria for an ideal vendor or employee.
• Assign a value to each requirement, based on its importance.
• Prepare a list of questions that will help you assess whether vendors meet your requirements.
• Request proposals or schedule interviews with potential candidates.
• Calculate the “winner” based on how well they fit your requirements.

Supporting your team with up-to-date technology

According to a 2018 global study by Unisys, employees who work with outdated technology are 600 percent more likely to want to quit! If your employees are frustrated by dealing with obsolete technology, they’ll become disengaged, decreasing their quality of work and your services.

Here are some tips for improving your team’s workflow using technology:

• Digitize documents and records.
• Automate repetitive tasks that don’t require human review.
• Upgrade your equipment with the latest firmware or software updates.
• Begin with the most used, or mission-critical tools and equipment, to maximize your investment in firm improvements.

It’s also helpful to take a high-level look at your firm’s workflows and processes. In my firm, I’ve found it helpful to ask my employees where we can make improvements. As I remove myself from daily operations, frequent discussions with my staff help me keep my pulse on bottlenecks and opportunities. Look for ways to either increase speed, improve quality, or decrease your team’s workload. Because good feedback is essential to implementing real change, here are some questions to ask your team and begin a meaningful conversation about improving their role within your firm:

• Which company positions would provide the skills you need to achieve your long-term career goals?
• What are some ways I can help you overcome these challenges?
• What are some challenges you’ve experienced as you work?
• What is going well in your role?

Knowing when to hire additional staff, and supporting your team with cutting-edge technology and defined workflows, are critical to transforming your firm. Properly allocating or adding to your firm’s staff and resources will prove invaluable as you work toward a consultative, value-added firm.

Editor’s note: This article was originally published on Firm of the Future.