How much do you need change to deliver advisory services?

An advisor sitting at a desk pointing to a laptop screen

So, you’ve decided to diversify your firm’s services from delivering just compliance services. We asked Heather Townsend, founder of The Accountants Millionaires’ Club, exactly how your firm’s structure may need to change to deliver advisory services.


What exactly are advisory services?

Before I go any further, I want to define what I mean by advisory services. These are typically optional services which your clients may need to help them achieve their personal or business-related goals.

These advisory services could be delivered by your firm, or someone external on behalf of your firm. For example, your firm may want to start business planning for your clients or coaching, marketing, HR services, or something else.

For the purposes of this article, I am considering the structural impacts to your firm if you want to start to generate a material and sustainable amount of revenue from your firm’s advisory services.

The risk of not considering how your firm’s structure may need to change

As accountants, we like to think that we are good at helping our clients achieve their financial objectives. At the risk of being controversial, this isn’t always the case. There is often a very different skill set to be able to, for example, help a business owner grow their firm, then do a set of accounts.

Even if you have the commercial acumen to be able to coach your clients, help them create a business plan or support them to buy/sell a business, can anyone else in your firm do this? If you are the only person in your firm who has the current skill set to deliver advisory skills all you are doing is giving yourself another organisational hobby. Let’s be honest now, do you have time to do all the workload you currently have on your desk?

Bookkeeping is often the foundation on which advisory services are built

I hear you say, but we don’t do bookkeeping. We are accountants. The purpose of this article is not to go into that rabbit hole! However, when it comes to advisory services it becomes much, much easier to sell them AND deliver them if you have access to updated ‘real-time’ financial information, and you and your client are looking at the same ledgers.

With real-time financial information, you have the data at your fingertips to be able to contact the clients who you think will need and value your advisory services. After all, garbage in = garbage out.

But how many of your clients who have their own bookkeeper or do their own bookkeeping have good quality records which are updated weekly or in an ideal world, daily. This is why often the first structural change you will need to make to your practice is to invest in a bookkeeping team.

Creating a reporting resource

Many advisory services are based on some kind of reporting capability, eg, business planning. However good Futrli is as a reporting tool, someone still needs to set up the boards and monitor them.

Who in your firm is going to create the information that will help your clients get insights from? Does that capability exist at the moment?

It’s not just the ability to create the reports, such as Futrli boards, which is required. It’s also the people to be able to analyse the reports and create meaningful insights for clients.

Client account managers who project manage their clients’ total needs

One school of thought is to have a team of client account managers deliver the advisory services to their clients. These account managers ‘project manage’ compliance, payroll and reporting requirements through the ‘operations hub’ and specialists in the firm.

The operations hub of the firm is where you centralise your teams. They’ll be the ones who deliver payroll, accounts and bookkeeping services. You may have a team of specialists (eg tax consultants, cloud integrators), which are available when required to work on a client’s affairs.

Existing compliance work

Compliance will soon be able to be done at the press of a button, but we’re not quite there yet. Compliance may get quicker to do, but it’s not going away any time soon.

Before you reassign your team to do more ‘advisory’ work, get somebody else to do the compliance work you do now. Can your firm’s structure deal with that?

Being reactive and accessible

Being a trusted advisor to your clients means being much, much closer to them. This takes time – and potentially time you may not have budgeted for in your business model. It also means being very accessible and responsive.

We have a virtual FD in our business and we speak to them typically 1-5 times a week. How would you handle that in your team?

You may need management accountants in your firm

Much of the ‘easy’ wins to help deliver advisory services, such as business planning, profit improvement, cash flow forecasting, budgeting are normally the skill set of a management accountant. These services need a resource who has a decent level of commercial acumen. Just churning through accounts, tax returns and simple tax planning, i.e. the typical day job of the traditional junior accountant in practice, wouldn’t necessarily give you that commercial acumen. This is why your future hires may need to have a management accounting background.

In summary

Adding in a sustainable and material level of revenue from advisory means taking a look at your firm’s structure. It will normally mean changing how your firm does things as well as the skills needed within your firm.

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