Succession planning
Succession planning

What are accounting advisory services?

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There are many correct explanations of the phrase “accounting advisory services,” which can make it difficult to understand and apply to our practices. The good news is that you are likely already providing some type of advisory, and that with a few more steps, you will be on your way to creating more value for your clients and practice.

Why do clients need advisory?

The reason clients seek out advisory services is because these are often things our clients cannot perform on their own. Advisory services include value-added services our clients don’t have time to do, don’t want to do, or can’t do for themselves.

As our client’s accountant, we have the capacity to provide tailored advice and opinions. Large advisory firms have committees, or act as a team, that have the authority to render a decision or judgment on an issue, in addition to providing opinions.

As accounting professionals, most of us have seen businesses succeed and fail. By offering our expertise and providing guidance, we can help our clients in one or more specific situations.

Laying the foundation for advisory services

Advisory services can be divided into several buckets that help define the roles each of these advisors perform for small business owners.

Small business owners are seeking our support. As their existing trusted source, it’s a natural progression to start providing council, and this is where many of us are providing “advisory” without the official title. Sharing financial information can feel like being exposed. If a small business owner does not fully understand their numbers, it makes them feel uncomfortable and vulnerable. Advisory starts by building trust and understanding. The mark of a good coach is being able to actively listen and gather as much information as possible to understand their situation and goals. From there, advice is often instinctual, and it is vital to trust your gut when giving a response.

Knowing the positive impact you can have, your role is to help your client to understand that you are the go-to source for answers and advice. Don’t let them rely on searching Google for answers. It’s scary and sad how easily they can be misled or even led away by someone else’s free advice.

Here are some tips to reinforce your role:

Offer advice. As an advisor, your words carry authority. Business owners often feel in the dark when trying to navigate their financials. One way you can help is to filter out the noise and focus on the most relevant information to their situation. From this position of authority, your clients will feel greater confidence with the information they are provided.

Coach your clients. A shortfall of the accounting profession is that we often are not providing the coaching our clients so desperately require. Small business owners find themselves paralyzed with indecision due to a lack of confidence in their financial knowledge. Frequently, business owners are unsure when to purchase assets or implement investment strategies. Integral to successful coaching is providing guidance tailored to your client’s specific needs.

Give a fresh perspective. If they have the time, your clients spend their days looking at one set of books. They are often set in their ways and/or in a pattern of doing things the way they have always done them. You can bring a fresh perspective from the outside looking in. By asking leading questions and asking why they perform tasks in a particular manner, you can help your clients see things in a new light. Your job is to review existing processes and look for opportunities to apply best practices.

Provide affirmation. Set realistic expectations about the timeframe in which change will occur. Like us, clients are busy people and want to see instant results; therefore, it is critically important to stay in touch so they don’t drift back into prior behavior due to lack of immediate success. A soccer coach doesn’t attend just one practice and walk away; they coach for the entire season. At the very least, seek to implement a cadence of monthly meetings, if for nothing more than to touch base with your clients. Continual communication is a crucial success factor to help them stick to the plan and stay on track.

Connect regularly. This is specifically about meeting with your client. To lay a foundation for success, business owners need to first understand their own personal requirements in order to create successful business budgets. This cannot be accomplished without frequent meetings. Therefore, we must shift our own mindsets from completing tasks to building long-term goals and plans with our clients. Quantity equals quality when it comes to meetings. Not every session will be life changing. Often, coaching is a phased-in approach over a 12 to 18-month timeframe. Improvement is realized over time, and reading financials is like reading a story. The years’ worth of bank activity tells the story of where the money came from and where it has gone. This insight allows you to decode the narrative of their financial life.

Accounting advisory services

Accounting advisory services may seem self-explanatory. However, what specifically are these advisory services? You must remember that you are a collaborative participant in your client’s team, and your job is to develop strategies to help them grow their company. There are many advisory services. You can choose to specialize in one, or become capable in several and tailor each one for your client’s needs. These include cash flow forecasting, revenue projections for future planning, and budgets vs. actual reviews. As a team member, your participation matters to your client.

How technology enables a platform for collaboration and advisory

We are fortunate to have modern technology in our toolbox. QuickBooks® Online allows us to have live bank feeds, a shared workspace between business owners and accountants, and real-time archival access. What this means is that we no longer work in an environment of stacks of paper manipulated and kept disconnected from our client’s day-to-day business. Combined with accountant-only features such as the Business Performance Dashboard, we have the technical foundation to delve into accounting advisory.

You are uniquely positioned to help your clients succeed

As discussed above, technology plays a critical role in our profession. Apps are an ever-evolving part of the technology in our platforms. QuickBooks Online allows for seamless app integration specific to your client’s needs, and there is an app to improve nearly every business process. However, your client is not an app expert and is likely unaware that technology exists that can make their business life easier.

As the one person who understands your clients’ finances and processes, and the expert in relevant technology, you are uniquely positioned to modernize and transform their business. Today’s accountant, particularly a ProAdvisor®, is so much more than a number cruncher. I hope you see the incredible opportunity this creates to formalize your role as an advisor.

With all these tools at your fingertips, all that’s left to do is to choose what kind of an advisor you are and get started.

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

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