The real reasons you need to do business advice properly

Why are so many consultants telling accountants that they need to start providing advisory services to clients? You’ve been doing this for years haven’t you? Or else your clients don’t want, don’t need or can’t afford to pay for such services.
 
 
Hmm. Have you really been doing this for years? I know many firms’ websites portray them as being ‘accountants and business advisers’. But equally I know that many such firms actually focus almost entirely on providing traditional compliance reporting related services for clients.
 
 
Please don’t tell me that NONE of your clients want or can afford to pay for good business advice.  I challenged this view and offered solutions in a previous blog post: “None of my clients want anything more than the basics”
 
 
Let me ask you 3 challenging questions:
When was the last time a client ASKED you for billable business advice? (By which I mean they asked you for business advice that they knew you would be billing them for?)
When was the last time you asked sufficient focused questions such that a client THEN asked you for billable business advice (that they knew would be billable)? and
When was the last time you won a new client because they wanted you to provide business advice (ie: beyond you simply helping with their compliance reporting obligations)?
There are 2 simple reasons why accountants are being encouraged to brush up (or to develop) their business advisory skills.
 
 
The first is that good business advice is generally more valuable than compliance focused services. This has always been the case yet, to date, it has only incentivised a minority of general practitioners to focus on the provision of business advice. This is clear from the websites and other marketing materials produced by most smaller accountancy firms.
 
 
The second reason is that the continuing development and adoption of cloud bookkeeping services is going to reduce the amount of time accountants need to spend on compliance reporting related work. This includes bookkeeping, accounts, tax returns, payroll, VAT, Co Sec and so on.  Some commentators have warning of this trend since pre 2010. For years I have said such warning were premature. Now I can see it becoming widespread – over the next 5 years or so.
 
 
You have a choice. You can either accept this or do something about it.
 
 
You can only afford to accept this if you are relaxed about your income falling over the next few years.  Assuming that’s not the case, you can either:
Look to bring more clients on board; whilst they won’t all pay you as much as the clients who stay with you, the aggregate may be the same. Of course more clients means more admin, more people with who to build a relationship and so on.
OR
You could look to expand the services you provide to some of your existing clients. And maybe even bring on board some new clients who come to you specifically because you appear to be focused on offering them more valuable services than your competitors. Business advisory services are key here.
 
 
You might think though that we’ve been here before and previous such predictions did not come to fruition. Self Assessment is much simpler to administer than the old tax system which involved multiple assessments, appeals and postponement applications to be managed for each client. Also, the abolition of annual audits for smaller companies removed a huge chunk of work for many accountants. Yet they survived. What is different this time?
 
 
I believe that the rate of change over the next 5-10 years will be faster and more impactful than ever before. The speed of recent enhancements and integrations with cloud bookkeeping system make this a near certainty. The facility to use automated bank feeds, receipt tracking apps and integrated invoicing facilities to update such bookkeeping systems in real time are key here. They negate most of the arguments of those accountants who say their clients don’t want to do their own bookkeeping. They don’t need to do so. Sooner or later the vast majority of your clients (and prospective clients) will be using such a system.
 
 
When I think about the services offered by most of the accountants I talk with, I suggest they typically fall into one of 4 boxes:
Compliance reporting related work. This is the main focus of most websites and marketing activities.
Ad-hoc advisory work – the need for this is typically caused by a third party (eg: HMRC enquiries) or a special transaction  (eg: a major capital purchase or sale)
Special advisory services – Those you feature on your website and wait for clients to request when the time is right
Recurring business advisory services – Regular meetings and business focused discussions addressing issues such as business forecasts, cashflow, budgeting, strategy etc.
 
It’s that 4th category that has the potential to be of most ongoing value to your business clients; and consequently it’s the most valuable service for you to provide more often than in the past.
 
 
Not all accountants are (yet) well placed to provide business advisory services. They lack experience, confidence and have yet to determine appropriate billing arrangements for such work.   Having said that, one of the members of The Inner Circle has started holding billable meetings with clients. He followed my advice as to how to do this and is enjoying the the experiences more than he ever did the compliance reporting related work.
 
 
I have also provided some basic advice on this subject in a number of elements of the Successful Practice Programme. Not enough to overwhelm anyone, but it’s a start and contains many practical, real-life insights, tips and tricks. These will help you routinely earn decent fees for providing valuable business advice to more of your clients.

By |2018-05-22T23:03:11+00:00May 15th, 2018|Accountants, Business advice, cloud accounting, Future, Servicing clients|

About the Author:

Mark Lee FCA is an accountancy focused futurist, influencer, speaker, mentor, author and debunker.

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