3 Signs your firm should be offering advisory services
Your clients are changing. Your employees are changing. Your firm is changing. Is it time for your firm to offer advisory services to better respond to the changes?
This is a question a growing number of firms should consider as increased client demand, a complex regulatory environment, and advancements in technology continue to reshape the profession.
This shift sweeping the accounting profession is causing many firms to rethink their business model and bid adieu to compliance-based services. Rearview mirror accounting is being pushed to the wayside to make way for more forward-looking, strategic services more commonly known as advisory services. And for good reason.
According to a study from the Thomson Reuters Institute, 95 percent of tax professionals believe their clients want business advisory services. This is significant.
What exactly are advisory services? Advisory services are centered around the future and providing clients with proactive, strategic guidance. The services include a variety of engagements to help clients boost profitability and make more informed, strategic business decisions. This differs from traditional compliance work, which is based on what has already happened.
While not all firms offer advisory services, there are several signs that indicate a firm should make the shift. Let’s take a closer look at three key signs.
- Clients are asking for advisory services
- Your firm has specialized knowledge and expertise
- Your firm is looking to expand and grow
#1: Clients are asking for advisory services
Clients are seeking more strategic guidance as they look to navigate today’s challenging business environment and keep pace with the revolving door of regulatory and legislative changes.
This increased demand for business advice became crystal clear during the pandemic as clients turned to their accountants for advice about everything from applying for Paycheck Protection Program loans to how to manage their finances to keep their businesses afloat. As a trusted advisor, accounting professionals heeded the call. Today, the momentum shows no signs of slowing.
It is important to keep in mind that clients may desire advisory services, but they aren’t quite sure how to ask for the strategic guidance they need and want. That’s why listening to your clients and asking questions is especially important. It provides valuable insights into clients’ needs and wants.
Perhaps a client is asking for advice beyond just their tax return. Maybe they are requesting counsel on recent tax-related legislation. Or perhaps they are looking for guidance on business processes. Such inquiries are advisory opportunities knocking on your door.
Being able to effectively meet client needs and expectations enables firms to strengthen client relationships and ultimately drive greater profitability.
#2: Your firm has specialized knowledge or expertise
In today’s rapidly changing business landscape, offering advisory services is a smart and effective way to stay ahead of the curve. By leveraging your firm’s specialized knowledge or expertise, you can provide valuable guidance and support to clients, employees, and your firm as you navigate these changes.
For instance, if your firm specializes in cybersecurity, you can offer advisory services that help clients protect their sensitive data and prevent cyber-attacks. Similarly, if your firm has expertise in human resources, you can provide guidance on recruitment, training, and retention strategies to help clients build a strong and motivated workforce.
Firms that have a deeper understanding of the audience they serve are able to better identify the needs and pain points of those clients. Possessing specialized knowledge or expertise gives you greater insights into the advisory services you can and should provide clients.
When your firm is known as the subject matter expert, you can differentiate yourself from other firms and better compete on price. The reality is that clients will pay a premium for advisory services when they have a clear understanding of your expertise and the value your firm provides.
#3: Your firm is looking to grow and expand
Offering advisory services can be an effective way to grow and expand your practice.
In fact, firms that have the right tools and resources in place have experienced a 150 percent increase in existing client monthly billings and a 200 percent increase in new client billings. Advisory services present one of the most important growth opportunities for firms.
One of the key benefits of providing advisory services is that it provides firms with multiple touch points. Instead of communicating with clients once or twice a year during tax season and tax planning, for example, accountants are frequently communicating with their advisory clients. This strengthens client relationships and enables firms to identify additional areas of opportunity.
Firms that provide advisory services are likely to eliminate hourly billing in favor of value-based pricing. Oftentimes, services are bundled into tiered packages and clients are charged on a monthly basis. This approach helps ensure that professionals are getting properly compensated for the value they are delivering to clients, and it provides firms with a year-round revenue stream. Clients also appreciate the transparency of this pricing strategy.
However, do not underestimate the importance of planning. Before taking the plunge into advisory, be sure that your firm has the right roadmap and tools and resources in place.
Today’s firms are facing a host of changes. Providing advisory services is a great way to better respond to the transformation sweeping the profession. Does your firm have the right strategies in place to keep pace?
Does your firm meet one or more of the signs? If so, now is the time to act. Take the Thomson Reuters Advisory Report Quiz today and unlock your firm’s advisory potential
