Forecast tomorrow, understand today and action a better future for your business. Start your free trial today.
Is it Time to Evolve Your Firm into Advisory?
Posted on 31st August 2017 in Advisory
Written by Freya Hughes
If you’ve noticed a plateau in your revenue recently you may be tempted to rest on your laurels. However, becoming complacent could easily spell the end of your practice. ‘Don’t change horses in the middle of the race,’ some naysayers might preach, but this is exactly what you should do. Cloud automation has upended most traditional practices in accounting, because services you once charged for are being completed in a fraction of the time. Before the robots take over, transition your firm to advisory to stay in the game.
While automation leaves many services unprofitable, providing standard services will mean you’ll win and lose clients in pricing wars with your competition. Churn is a big killer of businesses, and your firm won’t be able to survive it if you don’t evolve it. Business advisory services will differentiate your practice, making you stand out against the rest.
From increased revenue to harder working staff, business advisory services are focused upon strategising for the success and growth of business. No longer are you required to spend arduous hours on administrative tasks, instead business owners need your knowledge in business and strategy. It’s understandable to assume your clients are happy with their compliance services, but ask a business owner about the future and the chances are you’ll struggle to get a word in. When we spoke to Emma Fox of Fresh Financials, and Winner of Bookkeeper of the Year 2016, she told us quite the opposite. Of her clients, she revealed:
“They find someone who will do management accounting, as opposed to ‘I need a bookkeeper, what does a bookkeeper do?!’ They’re definitely looking for it.”
Not only to keep pace with competitors, advisory needs to be adopted because your clients want and need it. To help a business grow, you need to understand it. That’s why a great advisor will ask questions and dig into their client’s business as deep as possible. Previous trends combined with forecasts allow you to think ahead to the impact of coming events.
You might be be serving up some advisory services already – even if you’re not actually aware of it. The personal touch can’t be ignored, and it’s often accountants doing this that are the most successful. Taking the time to get to know the client sitting in front of you will mean you’re able to guide them to making better business decisions. Their business will become healthy, and your client will thank you. The more cash the client makes, the more you’ll make too.
Even if your clients just come in at year end and deposit a large sack of receipts and invoices on your desk, you’re the closest person to their finances. Literally. Think about it: you know their business better than their own spouse. This unique position means you can give clients pointers to working more efficiently towards their goals. The first, and most important step of this is to be on the cloud. There are plenty of add ons and apps which will automate processes for you, so you’ll find you’re working more efficiently – without the hassle of endless stacks of paperwork.
Embrace the change to advisory
You need to be armed with information and ready for the challenge of redesigning the way your firm operates. But you needn’t fear the change. It may seem, before you get started, like a massive overhaul of everything you know, but there’s plenty out there to help train you up. Continuing professional development (CPD) schemes exist for this reason. Training while working will not only help you see how the thing you learn can be applied in practice, but it’ll show you where you have gaps in your knowledge. When it comes to advisory services, we’ve seen success and failure and that’s why we pooled all of this knowledge and worked with the industry and our community to create an in-depth, strategic business advisory certification programme. When you get started, you’ll be taken on a journey. From altering your pricing to putting your new services out to market, we cover everything you need to know about making the change.
When we caught up with Mike Foster of CRM Accounting, he told us moving to advisory was one of the best things he could have done for his firm. At the time of our conversation, CRM was only three months into using FUTRLI, but he could see the benefits already:
“I think compliance has done its job. While it’s a valuable service, we’ve noticed that traditional styles of accounting aren’t quite hitting the mark for clients anymore. That’s why we’ve put advisory on the top of our list.”
You’re likely to come up against come resistance at first, as it’s human nature to shy away from change. Many accountants and firms will dig their heels in the ground when thinking of changing the way they operate. As Edi Osborne, CEO of Mentor Plus, writes:
“It would be so much easier to just stay with what you know, but the marketplace won’t stand still for your comfort level to catch up with the demand.”
We’re seeing it more and more – businesses refusing to innovate along with tech advancements. Remember Blockbuster? Their CEO laughed Netflix out of the building when they suggested Blockbuster buy their company. Who’s laughing now?!
Producing FUTRLI means we know how much of an impact embracing advisory makes. We’ve done our research, and it’s time for you to do yours. Read on for the four most important benefits of shifting to advisory…
Four key benefits of providing advisory services
Reduce churn. When you’re providing advisory services, your clients will start to trust you more than ever. Their trust becomes loyalty as you’re helping them on their path to success.
Add value to services. Because advisory services aren’t a physical entity, they can be difficult to price out. You’re billing for your time so making a productive schedule will benefit your firm.
Increase fees. You’re providing more information than ever before, and you need to be charging for it. Your knowledge is invaluable to clients, therefore, you need to make that clear by charging correctly. There’s evidence that millennials prefer paying a monthly fee, so take advantage of this MRR – it’ll provide a great backbone for future changes.
Decrease fees (which may seem contradictory, but hold that thought!). You might well find that rather than increasing your fees, the sheer volume of additional clients that need your advisory services means you can lower them. This would attract more business, as long as your services are reliable.
To achieve all of these factors, you need to focus on the business owner themselves. Get to know who you’re working to increase your knowledge of their business. It’ll help you understand where they want their business to be in the future. When you’re armed with this information, you’ll be able to suggest a range of different services you and your firm are offering.
The whole idea of advisory is to add value to services business owners really need. The quicker you can get behind this, the better. When we spoke to Scott Pheby, Founder and Owner of Phebys Chartered Certified Accountants, he told us that making the transition has meant his team are now positioned as part of their clients’ staff. You’re essentially their business coach, accountant and friend, and trust us, it’s a whole lot more gratifying than being shackled to a desk. Scott told us:
“Traditionally accountants were seen as external service providers, divorced from day to day operations. With FUTRLI we are more embedded with clients than ever before and genuinely part of their team. It is no coincidence that the clients we engage with most often tend to be the most successful.”
Getting started with advisory services
In his 2013 book, The Dark Side of Innovation, Dr. Ankush Chopra (a leading strategy and disruption expert) summed up four ways to ensure innovation in the field won’t destroy your business:
- Don’t be a deer in the headlights. By this, he means don’t freeze in panic when presented with a new way of working. Get to know it and understand it and you’ll find it easier to implement it and stay current in your industry.
- Make sure your whole team is onboard with the developments. For efficiency, you need everyone working towards the same goal so you can achieve what you’ve set out to as quickly as possible.
- Recognise and appreciate new threats. Get to know what others are offering so you’re not pricing yourself out of the competition.
- Create a ‘Plan C’. If your plans aren’t helping you lead in the industry, you’re going to need to think of another way of standing out. Possibly the hardest option, it’s smart to have a backup plan.
Start by thinking of how you’ll combat the above four points, and create the rest of your development plan off the back of that. Look at the way you and your team conduct client meetings. Changing the format of these will give you a great idea of what and how you can get through to your clients, and will show them you’re looking to develop as the rest of the business world is.
Present yourself and your team as real people – tell them about the struggles you’ve faced as a business owner, or relay stories from past clients to help them. The exciting part of advisory is the fact your knowledge sets you apart from your competitors. Embrace what you know, and lead with it. Your clients need you, so be the best advisor you can.
“In the digital age, offices change at an accelerated pace and accountants must be able to adapt and take advantage of those alterations. A high degree of agility is also necessary for responding to regulatory changes in the industry – only then they can provide quality service.” – Torri Myler for AccountingWEB.