Skip to content

Create better advisory engagement with existing clients

· 5 minute read

· 5 minute read

In talking to firms about transitioning to an advisory-centric model from a compliance-centric one, we often hear that new clients are excited about advisory services. But what about existing clients that already have established fees? When you’ve been working a certain way with your existing clients, how can you change processes or add services? It is possible to make a change to scope of services, even if you have worked with clients in a specific way for a long time.

How can you create a better structure for advisory engagement, even with existing clients? In the episode of the Pulse of the Practice podcast, “The Existing Client Opportunity”, Paul Miller and I discussed ways to create a more functional structure for your advisory engagement processes.

Accounting firms are gearing up for tax season. Did you take a pause at the end of last year to ask yourself if any changes are needed? Now is the time to do a new year audit to sort out what you can do differently in your firm.

Strengthen client relationships through advisory engagement

Even if you don’t have a clear opportunity of something earth-shattering to do for your clients, there are still ways to manage existing clients better. You might feel a little bit vulnerable in this arena because you don’t know how to add services or change things with an existing client, or you fear losing the client. You may think you are doing everything you can for clients right now, but there is always room for growth when it comes to advisory engagement. Or maybe you’ve been offering and providing what we call advisory services, but possibly you just haven’t charged for it.

How can you level the playing field through advisory engagement?

Paul Miller said, “I hear this all the time from firms that say, ‘Yeah, we kind of do what you do, but we just don’t charge for it.’ And I say, ‘Well, then you’re not really doing it like we do it.’ It’s just a matter of how to make a change in an existing relationship, whether someone’s already getting something for free or we feel like they’re serviced properly, but we’re still kind of figuring out how to evolve this client base.”

Typically, firms with long-term clients – whether they’ve given them advisory work for free or have charged a little bit for advisory services here and there – have an opportunity sitting right in front of them to evolve that relationship without rocking the boat. This starts with the billing end of the relationship. This doesn’t necessarily even mean price; the first thing to do is separate “price” and “charge” from billing.

Solving the cash flow problem by setting scope

Sometimes, firms have a one-to-many relationship. This is an opportunity to recognize that we can produce a cash flow problem because our bills go out intermittently as we do work for the client. But if we think about that from our clients’ perspective for a moment, we understand that our clients may feel that they can’t predict what’s happening when their invoices come in so sporadically. This is especially true if they are having cash flow problems. In fact, a lot of accounting firms also struggle with cash flow.

What if we start with the billing process first? Starting with the billing, we identify and define known cash flow. You can charge the client the same amount as last year with no price increase, but instead of billing as services are rendered, bill the client that amount divided by 12 and send out invoices monthly. This will help balance the cash flow on both ends and make the billing more predictable.

If your client has a new or different need come up, you can now build that additional service into the monthly billing with a modification to the scope of the engagement. The idea is to get clients to prepay your fees evenly over the course of the year. That’s good for your own cash flow as well as your clients’, but also gives you the chance to define the scope (if you haven’t already).

This is a win-win for you and your clients. Your clients want known cash flow. Does anybody like not knowing how much their bill is going to be? We have to remember that our clients have the same mentality that we have as consumers. Prepaying is good for them from a tax perspective and it’s good for you from a cash flow perspective.

You may ask yourself: How can I prove that something is out of scope to my client? If you’ve never taken the time to set the scope, that will be a challenging conversation. But if you don’t wait for them to ask a question or request additional services? You can proactively get them to affirm what the scope of the advisory engagement is. Then, when they inevitably call in with an out-of-scope question, you don’t have to have that uncomfortable conversation where you try to explain scope and potentially lose the chance to add some advisory services. They’ve already confirmed that they know what’s in and out of scope, so there’s no need for that awkward conversation.


Listen to “The Existing Client Opportunity” episode of the Pulse of the Practice podcast on your preferred platform (Google Play, Apple, Spotify, Stitcher) or here.


More answers