If you’ve been around a while I am sure that you find the constant articles, posts and commentators telling accountants you have to move into advisory services both boring and repetitive. I’ve been debunking the hype here for well over ten years.
Many commentators have also been naively forecasting the end of compliance work. I disagree.
Firstly, I doubt that many existing clients will ever choose to go fully DIY. That is, unless you have failed to evidence the value of using your services!
Secondly, the majority of businesses and private clients will always want professional help to fulfil their tax, accounting and reporting compliance obligations. Maybe some of the most straight forward cases will not need help but most of those who are or could be your clients will continue to want help.
Having said that, even I am now of the view that there are good reasons to get a move on if you have yet to embrace the idea of going ‘beyond compliance’.
Let me be clear, this is not about simply calling yourself or your firm ‘accountants and business advisers’. It’s also about doing a lot more than simply listing a load of advisory services on your website.
In many cases, what is required is a mind shift and an objective look at the landscape. And I say that even if you are happy with the way your practice has grown whilst focused almost entirely on providing traditional compliance related services for clients.
Before we go any further, 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: “What if none of your clients wants anything more from you?”
Here are 8 simple reasons why even I am now encouraging accountants to brush up (or to develop) your business advisory skills.
The rise of cloud accounting – The continuing rapid development and adoption of cloud bookkeeping services is starting 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 been warning of this trend since pre 2010. For years I said that such warnings 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.
The facility to use automated bank feeds, receipt tracking apps and integrated invoicing facilities to update such bookkeeping systems in real time are all 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 which will mean they will need you to do less than you have been doing to date.
Client expectations – If the pandemic had any upsides in 2020 it was the way that so many accountants provided pro-active advice to clients and found that this was appreciated and valued. Some accountants then charged for advising clients on related matters. The thing is that all clients who were helped came to realise that their accountants could provide advice over and above simply doing the recurring compliance work. If you don’t build on this expectation you risk losing clients to other accountants who will do so.
Better quality information – This follows in part from the rise of cloud accounting and also the related development of apps, add-ons and extensions to online bookkeeping services. The challenge is choosing which ones you want to embrace to help your clients. The most common mistake here is to commit to one solution before you have established which areas of advice you are comfortable to provide and that your clients will value and pay for.
Race to the bottom re compliance fees – Accountants have been telling me for years about the challenges they face from low-cost local competitors. And this will only get worse as compliance work becomes easier and more straightforward. Inevitably this will lead to an increase in the number of bookkeepers and start-up accounting practices competing for the more straightforward work. The basic economic concept of ’supply and demand’ tells us that this will drive down the fees for such services.
Increase average fee per client – Many of the accountants I have mentored have expressed a desire to increase the average fee they earn per client. This is rarely achievable without moving more into the advisory space.
Greater job satisfaction – Few accountants are in practice because they love doing, managing and promoting their ability to provide basic compliance services. Professional training and practical experience typically generates a desire to provide more business focused and valuable services. The newer software packages are providing a route to follow in this direction.
Clients want pro-active advice – The accountants I have worked with routinely confirm that is so much easier to win over new clients when they talk about how they provide pro-active advice to their existing clients. It’s what clients want and, so often, the absence of such advice is why they look for new accountants.
Easier to STAND OUT from the competition – So many accountants’ websites look so similar with their focus on compliance services. So many accountants sound the same when they talk about themselves and their practices. Those that find it easier to win valuable new clients are those who can talk confidently about how their clients benefited from their valuable business advice.
As you develop your business advisory skills so you can expect to be better remembered, referred and recommended. And, consequently to get more of the clients, business and fees that you really want.
There is an alternate view of course.
That view says that, despite all I have explained above, accountants can continue to earn a good living by being well organised and remaining focussed on compliance work.
And I agree, that is a perfectly reasonable approach to adopt IF you are relaxed about your income falling over the next few years.
Why do I suggest that your income will fall? Quite simply because you will struggle to win new clients who will be willing to pay as much as your current clients do for compliance services that are falling in perceived value. Of course, if none of your current clients, sell up, retire, move away or die, you will probably be ok. You may not be able to increase your fees greatly but hopefully few of your current clients will leave you for someone cheaper or to do it all themselves.
If you do lose more than the odd one or two clients you will have a choice:
- 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 whom to build a relationship and so on.
- 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.
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 systems make this a near certainty.
Not all accountants are (yet) well placed to provide business advisory services. They lack experience, confidence and appropriate billing arrangements for such work.
I am working with some accountants who value my style and approach and who want to replicate this when offering business advice and support to their clients. I have also written extensively around the subject on this blog and speak about the practical ways to move forewords at conferences and away days for accountants. I have also produced a simply list of over 100 advisory topics that accountants are able to provide to clients. Do get in touch if you would like a copy. There’s no charge.
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