The COVID-19 pandemic accelerated the trend toward advisory services. While clients have consistently sought help with entity structure, executive compensation, and other non-tax matters, the pandemic shifted the focus to more mission-critical questions, like getting PPP loans and keeping their business afloat.

Let's look at why accounting firms should pursue advisory roles and some tips for building an advisory service into your practice.

The trend toward advisory has been in the works for years, but the COVID-19 pandemic has accelerated these trends.

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Why Pursue Advisory Roles?

Many accounting firms focus on basic compliance services, but new technologies are automating many of these tasks. As a result, a growing number of firms are transitioning from compliance to performance or strategic advisory services. These advisory roles can help distinguish your firm, provide more value, and unlock several other benefits.

There are several reasons to add advisory services to your practice:

• Improve Retention: Advisory relationships are much stronger than bookkeeping or accounting-only relationships. If you're delivering more value and integrated into more parts of their business, it's harder for clients to leave or switch firms.
• Increase Referrals: The robust nature of advisory relationships may also help increase referrals from your existing clients. Since you're delivering more value to them, it's much easier to ask them for referrals or see referrals from them organically.
• Increase Revenue: Advisory relationships make it easier to justify higher price points. If you're already charging $150 per month for client accounting services, you may be able to charge $450 per month for CAS along with advisory services.

The good news is that most accounting firms are already in a great position to add advisory services since they have an in-depth knowledge of their client's business. While some additional training may be required, the potential benefits of adding these services almost always outweigh the added costs and the risk of rising competition.

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Getting into the Right Mindset

Advisory services are all about helping clients solve problems. In many cases, clients want firms to fill a CFO-like role in advising them on financial decisions, growth strategies, and other business areas. You might deliver advice in the form of off-the-cuff phone calls, regular board meetings, or written deliverables, depending on the client.

Common examples of advisory services include:

• Financial Advisory: These services help clients forecast sales, create budgets, and plan cash flow to improve their business.
• Process Advisory: These services focus on maximizing human resources by mapping out an organizational chart.
• Succession Advisory: These services focus on developing a strategy for passing on leadership roles when an owner retires.

The starting point for these services is a simple conversation to discover client pain points and long-term goals. After identifying potential needs, try to determine where you may offer helpful advice and if the client would be open to the two-way relationship necessary to implement the advice and improve their business.

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Scaling Across Your Practice

Advising clients on an individual basis is relatively straightforward, but scaling advisory services across your entire practice is another story. Without some level of standardization, it can become challenging to manage expectations across different clients and ensure consistency and profitability at the practice level.

There are several steps to start an advisory service:

• Build Your Team: Identify the team members that will spearhead the effort to add advisory services.
• Filter the Client List: Prioritize clients who could benefit the most from advisory services and filter out those that won't.
• Define the Services: Keep services that are popular among existing clients while introducing higher-value services.
• Package and Price: Use tiered pricing bundles to define the service options clearly and maximize your revenue and profitability.
• Create the Processes: Assign roles within your team and create the processes to deliver the services.

Many accounting firms bundle advisory services, client accounting services, and compliance services into a single package with a monthly fee to simplify billing and the client experience. If you have existing compliance-only clients, you may want to keep them on their current plans if they're uninterested in advisor-level services.

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Streamline with the Right Tech

Advisory services require a high level of collaboration between different team members and the client. For example, a client may decide to implement a different compensation plan after a strategy session, which the payroll team will need to implement. The client may also need to provide some additional information to payroll before they can do it.

Client Hub can help streamline communication between the client and different team members across your practice. In addition to a fully-featured client portal with built-in communication and file sharing, the platform makes it easy to automate processes with recurring jobs and automatic reminders to keep your internal team on point.

Some of the most impactful features include:

• Internal Workflows: Create recurring jobs and task checklists to keep your internal team operating at peak efficiency and avoid letting anything slip through the cracks.
• File-Sharing: Exchange files with clients using a mobile or drag-and-drop interface, eliminating the need for disorganized or insecure external file-sharing applications.
• Client Portal: Make it easy for clients to send messages, upload files, complete tasks, and access the resources they need.
• Mobile Apps: Enable clients to interact with you with an Android or iOS mobile app.
• QuickBooks Integration: Connect your client's QBO account and automatically create tasks to categorize expenses whenever an expense posts on an uncategorized account.

Client Hub's recurring workflows ensure that you don't miss a beat with clients, while the client portal makes it easy for them to keep in touch when questions arise. In fact, the elevated user experience can become a critical competitive advantage compared to other firms that rely on a patchwork of different technologies.

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The Bottom Line

Many accounting firms are moving towards advisory services as a way to grow their practice. While the process sounds simple on an individual level, there are several essential steps to keep in mind when implementing it on a practice level. In addition, Client Hub can simplify and streamline these services to maximize the odds of success.

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