If you’re a leader within an accounting firm, you’ve likely heard of advisory services and their lucrative impact. This trend is picking up pace as traditional accounting firms seek more strategic and meaningful work that goes beyond just tax returns.
Offering your clients proactive advice through accounting advisory services is especially important as the regulatory and legislative landscape continues to become increasingly complex. In fact, a Thomson Reuters Institute survey found that 95 percent of tax professionals believe their clients want business advisory services.
But what accounting advisory services should your firm offer? And how do you make this transition and market your services appropriately? Let’s take a look.
What are accounting advisory services?
Accounting advisory services include a variety of engagements designed to help clients streamline accounting processes, improve profitability, and enhance overall decision-making. These services are centered around providing your clients with proactive, forward-looking guidance and advice. This differs from traditional compliance work in that tax returns and related activities report on what happened in the past.
Accounting advisory services are all about the future — and this shift is picking up steam as more and more accounting firms use technology to automate tax returns and compliance work. Not only are strategic accounting advisory services more profitable, but they also encourage more meaningful relationships with clients.
What are examples of advisory services?
From financial accounting to reporting advisory, there are many types of advisory services that accounting firms can provide. Your expertise and knowledge are baked into every client engagement, ensuring a mutually beneficial experience for both parties, long-term growth, and revenue opportunities.
- Examining overall profitability
- Investing and wealth management
- Cash flow planning and forecasting
- Company fringe benefits
- Estate planning
- Income shifting and education saving strategies
- Business entity structure planning
- Rental property operations
- Selling a business
Types of business advisory services include:
- Tax planning and strategy
- Benchmarking and analysis
- Counseling on tax related legislation
- Setting and achieving business goals
- Understanding Key Performance Indicators (KPIs)
- Strategic planning
- Business best practices
- Independent contractor/employee analysis
- Succession planning
Overall, accounting advisory services help your clients identify their business goals and align their business plan to achieve those goals—all while relying on your firm’s unique knowledge and expertise. As you connect on a deeper level with your clients, you and your staff will become empowered to identify additional advisory opportunities along the way.
For accountants who’ve become tired of the tedious data entry associated with traditional compliance work, the many facets of accounting advisory can help you rediscover the spark that drew you into the accounting profession in the first place: helping other achieve their business and financial goals.
How do you price accounting advisory services?
The short answer to this question is to shift away from hourly billing to value-based pricing. With a value-based approach, your firm assigns a price based on the value your services bring to the client. The price varies from client to client because you base it on what the client values most and what they are willing to pay for that value.
The traditional hourly approach to billing can penalize firms for working quickly and growing their breadth and depth of knowledge. Instead, your firm should base its accounting advisory services pricing around the value you bring to clients.
To price accounting advisory services appropriately, you must define the scope of work at the beginning of the project and ensure the client knows what is included and what will cost extra. This might require educating them upfront on what’s included and not included in their engagement.
To that end, value pricing requires more upfront strategic planning. When you need to develop a specific price based on each client’s unique needs and perceived value of your services, you need more time to truly understand what services will benefit them most. While strategic planning in advance of the advisory work can initially slow down the onboarding process, it will pay off in the long run. Even after you’ve established your value pricing model, there’s a good chance you’ll need to adjust as you grow and become more accustomed to this new way of invoicing.
At the end of the day, value-based pricing rewards your firm and employees for their expertise and efficiency—and results in higher margins and happier clients.
How do you market advisory services to clients?
To effectively market advisory services, you should first identify your target audience. Think about your interactions with current clients. Are they asking for advice beyond just their tax return? Or requesting counsel on recent tax-related legislation? What about guidance on business processes? Listening and asking questions provides valuable insight into your clients’ wants and needs—and what advisory services you can offer to better serve them.
Secondly, think about your expertise and how it aligns with the demographic you serve. What pain points have your clients had and how have you solved them? What is your target market’s age, profession, income level, and so on? Do you currently serve a particular industry or niche, like mergers and acquisitions? When you understand your audience, you can develop a marketing campaign with messages that truly resonate.
Once you have identified your target audience, it’s time to leverage the appropriate marketing channels. From digital marketing to social media, SEO, and email pushes, building a solid online presence will help you reach more prospects and demonstrate your knowledge.
Throughout your marketing campaigns, it’s important to establish your firm as an authority and thought leader on tax and accounting topics that resonate with your target audience. Consider writing regular blogs or offering your unique insights on social media or by hosting a webinar. Capitalizing on tax and accounting “hot topics” will draw your audience in and solidify you as leader in your field.
Networking is also an important marketing tool. Get out and develop relationships with other professionals in related fields so you can build a strong referral network.
Making the transition to advisory
When you know how to market and price accounting advisory services effectively, your firm transforms from a once-a-year tax compliance processer to a year-round strategic advisor. This shift not only increases profitability but also has a positive impact on your clients’ business and financial lives—and that’s a powerful thing.
With a market-proven methodology, Thomson Reuters Practice Forward® offers content, tools, and guidance for forward-thinking accounting firms like yours who are interested in expanding into advisory services. Start your journey to accounting advisory services today.
For more information on advisory services, read “Accounting advisory: What you need to know.”