The shifting dynamics in the accounting industry present an opportunity for small and midsized firms to gain a competitive edge by moving beyond traditional compliance tasks and embracing a more advisory-focused approach.
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| Understand the value of an advisory model |
| Identify ideal clients for advisory services |
| Convert clients from compliance to advisory |
| Build long-term, meaningful relationships with clients |
The shifting dynamics in the accounting industry present an opportunity for small and midsized firms to gain a competitive edge by moving beyond traditional compliance tasks and embracing a more advisory-focused approach. This shift not only increases revenue but also positions firms as year-round trusted advisors.
But how do you identify ideal clients, transition them into advisory relationships, and build long-term connections? Let’s take a look.
Understand the value of an advisory model
The value of an advisory services business model is that it goes beyond traditional compliance, offering personalized guidance that drives client satisfaction and loyalty. For small and medium-sized accounting firms, the benefits are substantial: increased revenue, competitive differentiation, and the ability to meet evolving client needs.
Ushering in this shift is the fact that AI-driven tax technology can automate most traditional compliance work and provide data-driven insights that enable firms to engage clients in a more profitable and impactful way. This shift, however, demands a new mindset.
“I know accountants and change don’t go together, but you won’t get a different result unless you do something different,” says Sharon Theriot Macke, CPA & Founding Owner of Macke & Company, CPAs. “I believe this is a change where you’re still on the early end of the curve — and clients are driving this. They need it.”
This need is driven by the fact that advisory engagements focus on your clients’ business goals and strategies alongside traditional tax compliance, integrating deeper value from the outset of the relationship. Firms that have transitioned to this model are seeing substantial benefits, from offering clients strategic financial insights to guiding them through complex tax regulations.
Central to this transformation is recognizing the worth of your knowledge — and that it shouldn’t be given away for free. If clients are continually coming to you for one-off questions or personalized tax advice, it is time to implement an advisory services business model that unlocks revenue and builds long-lasting client relationships.
“Every practitioner I know who’s not on the advisory model is giving away more than enough work to pay for the investment in this change”
-Sharon Theriot Macke
CPA & Founding Owner of Macke & Company CPAs
Identify ideal clients for advisory services
Introducing advisory services to your clients requires a strategic and thoughtful approach. Consider first engaging with clients who have complex financial needs or have expressed interest in strategic planning. These clients are more likely to see the value in advisory services.
During these conversations, it’s important to clearly explain how advisory services can help clients achieve their business goals and improve their financial situation. Be specific and illustrate potential outcomes unique to their situation. It might even be a good idea to offer an introductory advisory session to showcase the benefits of advisory and demonstrate the impact of your expertise.
Criteria to identify ideal clients for advisory services:
- Financial complexity. Identify clients and prospects with multi-faceted financial concerns, as they will benefit most from advisory services.
- Growth mindset. Look for clients who are eager to grow and open to change.
- Cultural fit. Engage clients and prospects that align with your firm’s values and service model.
Remember: Not all clients are an ideal fit for advisory services. Sometimes, this means letting go of clients who don’t fit the advisory framework. This frees up resources to focus on more rewarding engagements.
Convert clients from compliance to advisory
Historically, accounting firms have operated under a transactional model, delivering annual services primarily focused on compliance and reporting. By moving from billable hours to a value-pricing model, you enhance your firm’s value proposition and establish continuous, year-round client engagements rather than limiting interaction to annual tax filings.
A value-based approach sets service prices according to the specific value delivered to each client. This pricing is customized, reflecting what the client values most and what they are willing to pay for that value. For example, a client might place higher importance on monthly strategic consultations than on routine bookkeeping and would be willing to invest more in ongoing advisory services.
To implement an advisory services business model effectively, start by clearly defining the scope of work at the outset of each engagement. Ensure clients understand what services are included and what work may incur additional costs. This involves educating clients upfront about the details of their engagement.
Accurate scoping and transparent communication are crucial for maximizing the potential of value-based pricing. When executed well, this approach can lead to higher margins, increased client satisfaction, and stronger long-term relationships.
Key steps to converting clients from compliance to advisory:
- Define a clear scope of work. Outline what your advisory services will entail, differentiating them from compliance work.
- Educate your clients. Set aside time with each client to explain the long-term value of strategic guidance and use personalized examples to demonstrate the benefit.
- Utilize a proven methodology. Leverage proposal templates, pricing calculators, and platforms from providers with a proven advisory methodology to package and present your services effectively.
Build long-term, meaningful relationships with clients
Success in advisory services hinges on relationship-building and communication. Strong relationships foster trust, making clients more receptive to strategic advice.
As you build more meaningful relationships with your clients, be an active listener and take the time to truly understand their challenges and financial goals. Women in advisory roles often excel in these areas, leveraging empathetic communication and relationship-building skills to drive client engagement and loyalty.
At the end of the day, converting to advisory services is more than a strategic pivot—it’s an evolution that aligns your firm with future client needs. By identifying ideal clients, fostering strong relationships, and leveraging technology, you’ll set your firm up for sustained success.
If you’re ready to embrace advisory services, explore Practice Forward below and request a demo today! ↓
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