What Are Business Advisory Services?
Posted on 10th August 2017 in Advisory
Written by Freya Hughes
Cloud automation has upended most traditional practices in accounting, and it’s only those who dive down the business advisory path who will survive. We’re frequently asked the best way to get started with business advisory services, with some firms not knowing exactly what they entail. Everyone wants to live their ‘best life’, and there are a huge amount of reasons why selling business advisory services can help you do just that. From increased revenue to harder working staff, we’re looking at what exactly defines a business advisor, and some of the key reasons to jump in head first.
Business advisory services are what accountants provide their clients, focusing upon strategising for the success and growth of a business. Advisors themselves are a hybrid of business coaches, mentors and even friends. A great advisor will ask questions and dig into their client’s business as deep as possible. Examining previous trends and combining them with forecasts allow you to think ahead to the impact of coming events.
The focus is on the future
Compliance services have taken a backseat in recent years. This is because technological advancements have seen automation take over the industry. No longer are you required to spend arduous hours on administrative tasks, instead business owners are seeking out your knowledge in business and strategy.
Clients require someone to guide their company through the murky waters of business, not somebody who will only discuss their historical figures. Ask a business owner about the future and the chances are you’ll struggle to get a word in. Take advantage of their passion and drive to help both of you push the business forward.
The accounting industry is so competitive. If you’re only providing standard services, you’ll find you win and lose clients due to competitive pricing. While your practice may be able to handle this to an extent, you need clients to be ‘sticky’. However, with the implementation of business advisory services you’ll be able to differentiate your firm completely from those with traditional compliance and tax services.
When you can see the relevant numbers in a business, you can be proactive. Simply examining the figures your clients have opens up your conversation. You need to start asking questions, centred around targets and goals – but not just in business. If you get an idea of the individual’s life ambition, selling up and travelling for example, you’ll be able to strategise with them more effectively. The idea here is the more successful your client, the more successful you are.
The most exciting part of being a business owner, as you’ll know if you own your firm, is watching your goals become a reality. With year-end reporting and monthly meets or chats, you simply cannot have a clear view of which elements or departments of the company needs attention. Advisors are tasked with identifying these worrying parts of the business, and correcting them. Prevention is better than cure, as they say.
Your clients are going to start expecting much more in-depth services soon enough anyway, so make sure you’re ready when they start asking. You’ll be meeting regularly to keep track of their forecasts, so load up on knowledge. A core way of getting to grips with business advisory services is to start thinking of and identifying key performance indicators (KPIs). They break down a business into bitesized, measurable portions, and make it clear when there’s an issue with a revenue stream. You’ll be able to see a real-time view of every part of the business, from wage expenditure to referrals rates, which of course combine for an overview. If you need some help with these metrics, have a look through our KPI Library and our industry-specific KPIs lists, designed with you in mind. We’ve covered a good amount of industries, so having a browse will help you to get thinking in the right way.
So, here are four key reasons to adopt business advisory services…
1. Obtain additional revenue – for both your clients and your firm
One of the most attractive parts of adopting business advisory services is the potential to make a staggering amount more revenue. This isn’t just for you though – you’ll find rolling out strategic planning for clients will help up theirs too.
Selling what your clients actually need seems like common sense, but when the business owners you’re working with don’t know what would benefit them it’s no wonder you’re missing out on extra cash. They know how to run their business to an extent, but by buying your knowledge of industry and accounting, they’ll be in a far better place. Upselling is a great way to introduce clients to your new services, and will add to the bill you send them. Suggest showing them a simple forecast and explain the benefits – they’ll jump at the chance to obtain more knowledge about their business’ future. Your clients are already sold on you and your firm, so gentle suggestions are likely to go far.
Leveraging what you already know about your clients is a pretty effortless way of selling more. If you’ve sold your client a forecast, showing them the power of combining it with scenario planning. They’ll begin to see you’re helping them push their business forwards, so are going to trust your judgement. If they’re not ready, don’t be disheartened. Simply demo the functions and let them stew on how much they need them – they’ll soon come around.
2. Up your staff and client retention
Staff engagement is important in every industry, but especially for accounting firms battling for clients. Combine that with new cloud and advisory strategies to implement and grow, you need to be confident you can count on your people. You must ensure you’re keeping staff interested in their work, and endless compliance and admin isn’t going to cut it. While advisory services catapult your CPAs to the frontline, traditional accounting sees them shackled to their desks. I think we know which most people would prefer. Business advisory services are so exciting because they’re a fun way to work. Your team will be learning on the go, and will find satisfaction from watching their clients business excel.
Not drilling down into what your team want from their current work and future careers means they won’t feel nurtured. We’ve said above that you need to be quizzing your clients on their goals, but not doing the same in your firm is dangerous territory. Focusing on their strengths and performance – rewarding where appropriate and helping with additional training if marks are missed – is going to create trust and a feeling of support, which will be felt across the team. If your staff don’t feel valued, you can’t expect that to trickle down to your clients. And don’t get complacent: they will notice, and it will impact your bottom line.
3. Raise efficiency
Business advisory services themselves are intended to raise efficiency. Your cloud accounting software is automating many of your processes, which will be saving you hours per day. So, it’s time to cash in on the efficiency. It might be tempting to have an easy life and carry on as before, but with a smaller ‘to do’ list, but trust me, there’s so much more to be earning revenue from.
To save yourself extra minutes throughout the day, check out the Xero marketplace, or the QuickBooks app store, and see what other applications you could adopt to speed up further tasks. There are a myriad of different add ons and apps, so to help you decide, check out our top Xero add ons and our top QuickBooks apps. While you may be shaving minutes off tasks, think how you could utilise this time to conduct client meetings, or even hunt out new leads. Investing your saved time in your clients equates to more fee growth. If you’re wasting the time of your highly qualified accountants, you’re not optimising your resources and will be tricky to justify your fees. And these members of staff will soon tire of this thankless way of working, so be careful.
4. Help clients really understand their business
There’s no better way to conduct client meetings than face to face. In the past, I’m sure you were no stranger to a business owner running in and dumping a sack full of receipts on your desk, half listening as their head was in so many places at once. With business advisory services, you’ll capture their entire attention and be able to get through to them like never before. You’ll be connecting with them on a deeper level, asking their pains and worries. Even a minute into the conversation you’ll notice they’re captivated by the potential of such help.
Many people in the world are better at understanding visual rather than numeric reports, so use this to your advantage. The way FUTRLI is presented keeps this in mind, as one half of our founding duo simply cannot relate to a wall of numbers. Set up reports and forecasts in a range of ways, and have some fun with it. Once you’ve made the transition to business advisory services, you can even white label the platform with your firm’s branding, which increases your brand recognition – which almost always means brand loyalty too.
Another beauty of cloud accounting is the ability to take it anywhere. Conducting meetings at your client’s business will give you a much more in-depth understanding of them and their company, and it shows you’re ready to make an effort with them. Business advisory services allow you to be flexible, which is invaluable as business owners these days expect everything to be instantaneous. Besides, it’s always nice to break up the day by getting out of the office!
Business advisory services are the way to go. We’ve noticed, at the front line of accounting, that firms that aren’t ready to change are starting to flag. With so many firms making the change at the moment, there really is no time like the present. Update your focus to the future, and watch how much more your clients are wanting to talk, catch up and strategise with you.
Of course there can be some resistance to change, and that’s a natural part of being human. It’s normally the case that clients are hesitant to give up their tried, tested and trusted ways, rather than being fearful of something new. It’s up to you to show them how much they’ll benefit from business advisory services, so to get you thinking of how you’ll get clients excited here are a couple of ‘roadblocks’ you’re likely to encounter as you roll this out.
- Clients aren’t on the cloud. This is your chance to convert them. Think about the efficiency and user-friendly interface we’ve discussed and simply show them it’s the better way to operate.
- Your team has a skill shortage. There are a range of CPDs that can help with this. After three years in the industry, we’ve even made our own. Noticing a distinct lack of courses that take firms right from an introduction, combining education and work, all the way to implementation, we know we’ve got it right. To learn more about FUTRLI certification, see here, or speak to one of our team for more information.
By now you should have a handle on what’s expected from a business advisor. It’s a very exciting time as more and more firms adopt this way of working, and we are here to help you nail your training and practice. Be warned: you must fully embrace advisory services to get it right. It’s all well and good to start slow, but plan out how you’re positioning your new services to clients and ensure every member of your team is right there with you. Being on the same page as one another is going to see results quicker than you’d imagine.