What Happens if Your Firm Doesn’t Move to Advisory?
Posted on 31st August 2017 in Advisory
Written by Freya Hughes
“And I wonder if you know, How it really feels To be left outside alone,” sang 00’s pop diva Anastacia. You won’t have to imagine too much longer, though, if you don’t take the leap into advisory. It’s the only way to be running your firm – and it’s 2017 so you know the pitfalls of automation taking over. If you’re still digging your heals in, this blog will hopefully change your mind. These are the top, and scariest, things that will happen to your practice if you don’t make the change into the advisory space.
We know what can happen when you try to move your firm to advisory: staff can be resistant and clients may not want to embrace the cloud. But what happens if you turn your back on this industry evolution?
When speaking to our clients, we’re noticing that some say their clients are hunting out accountants that will give them advisory services. Business owners are out there looking for management accountants, advisors, VCFOs, because they need help with growing their business. They’re no longer interested in looking at a wall of numbers and it all going over their heads – now it’s all about selling your knowledge.
Any accountant can make them compliant, so now it’s a race to provide the best value-added services. Emma Fox was voted Xero’s Bookkeeper of the Year in 2016, and along with running Fresh Financials, knows her way around the industry. Read the full case study here. With 20+ years of bookkeeping experience, Emma told us:
“I’d say business owners are now making the decision that they want their accounts to work in this particular way. Then 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.”
Meanwhile, Sam Wood, Lead Client Manager at Blu Sky Chartered Accountants, thinks that embracing advisory is such a no-brainer, it’s no longer a USP for a firm. Read the full case study here. Blu Sky have gone the whole nine yards, white labelling the FUTRLI platform to present it as their own, so they have more time to spend with clients, building lasting relationships which has upped their client retention massively. He told us:
“In a world of change, clients need to be guided through the changing accounting landscape by an advisor confident of their own offering with strong software partners behind them.”
Forming relationships through advisory is essential. Think of it as when you go to your local shop – the server is likely to remember you, and you might have a chat while you’re buying the newspaper. You’ll get to the point where they’ll know your order, eventually even what your family are up to. It’s nice to walk into a place where you’re known, and that level of customer service makes you keep going back. This is no different. While clients may seem to the point, taking a few minutes to speak to them as people, rather than as transactions, will make a huge difference to your client retention.
You can’t help clients grow their business
Most business owners started their venture because it excites them and they want to succeed. Keeping them compliant is a necessity, but it doesn’t help them spread their wings. Your customers are starting to expect you to impart your knowledge to help them grow their company, and rightly so.
Almost everyone dreams of early retirement, or at least a slower pace of life when they get older, so keeping their business healthy is probably one of the most important things in their life. Many will have begun their company so that they can sell up at the right time, or they’re setting up their children to take over one day. Not helping them grow means you’ll be waving goodbye to referrals – and quite possibly your clients.
You’ll miss out on revenue
You can add a lot of value to selling your strategic skills and industry knowledge. You’re selling what you already know, and that doesn’t cost you anything.
If you do need to sharpen your skills, however, there are many continuing professional development (CPD) schemes you can look into. At FUTRLI we very much believe education should be a key part of working. Because of this, we’ve created FUTRLI Advisory Certification. This course is divided in 26 modules and covers everything you need to know from the basics of forecasting to rolling out advisory internally.
Another way of upping revenue in your firm is to adjust your pricing structure. We researched what millennial clients expect (and want) from their accountants, and the majority of the respondents prefer monthly set billing:
“More than half support monthly at rates and 31% prefer fixed fees, compared to 14% who prefer hourly billing.”
But why is this the case? There are two key benefits to monthly set billing – one will help clients, the second is great for your firm:
- Your clients will know exactly how much to budget for your services, which will simplify their forecast. Having this monthly amount accounted for and planned for will placate some of their worries of their outgoings. For you, this is brilliant! You can wave goodbye to hourly billing, which can be quite detrimental to your firm as you may spend many hours preparing their admin on clients behalf.
- You’ll earn more – you could be missing the mark with how much you should be earning per client. Adopting a monthly payment scheme will benefit your firm as you’ll be able to rely on MMR (monthly recurring revenue). So long as these monthly clients are being looked after to the best of your firm’s ability, you’ll notice you’ll have extra time to work on your referral count and hunting down new leads.
Staff and client retention will drop
Keeping your staff excited about work can be a challenge. Performing the same monotonous tasks day in, day out is going to bore your team to tears after a while. Of course, advisory services won’t suit absolutely every one of your team, but the vast majority are going to be keen to spread their wings and get out and about.
It’s great to try and make your staff happy to try and make them stick, but make sure you understand that satisfied staff are not the same as engaged staff. Satisfaction usually stems from an understanding flexible boss, who listens to their employees’ pain. For example, you might let an individual leave early or come in late if they have family obligations.
Engagement, however, is what happens when your employees really care about your firm and want to do the best they can to help it grow. Usually there’s an emotional commitment and high-level loyalty to the business, wanting it to do well. The team will go above and beyond for you because they believe in what they’re doing.
If your staff don’t believe in what they’re doing, they won’t put everything into each task. This could eventually impact your bottom line if clients are receiving slapdash work, and lose you customers.
You give competitors space to take over
Before advisory, some practices were in a race to provide the lowest prices for clients – a product of a competitive industry. Now, though, those in the know are deserting this old battle to make a long-lasting change to their practice. And this change cannot be matched or beaten by a quick price alteration. Take head of the above points and you’ll soon be on your way to being a leader in the advisory space.