2. Introduction
If you're an accountant, you’ll already know the story: While compliance has been
the bread and butter of the industry for years, the displacement of traditional
compliance-related services by technology is increasing while the market remains
as competitive as ever.
For accountants, advisory services offer a way to maintain revenue, bring in new
customers, increase customer loyalty and to prevent your business model
becoming a race-to-the-bottom price war.
So what changes do compliance-focused accountants have to make as they
transition into advisory?
We take a look at the strategies - as well as the tech, the marketing, and the
upskilling - required to successfully transition from a compliance-based
accountancy firm to an advisory-focused one.
3. Contents
GET EDUCATED
CONFIDENCE GAME
HOW MUCH SHOULD YOU CHARGE?
POSITION YOURSELF
USE TECH TO HELP YOU MASTER SOFT SKILLS
BUILD TRUST
MORE ABOUT TECH
IDENTIFY AND GRADE YOUR CLIENTS
CHECKLIST
SOURCES
4. The rationale is simple - provide customers with the tools and knowledge to do
their jobs better and they will reward you with loyalty, increased spend and a
sustainable, referral-based business. Now advisory is a broad term. It can cover
any of the following, or any combination of the following:
❏ Debtor management
❏ Cashflow analysis
❏ Wealth management
❏ Forensic accounting
❏ Sustainability advice
❏ Risk management
❏ Financial literacy advice
❏ Financial technology training
But what you can offer and what you should offer are two different things
right? So how to decide? Paul Greenwell, blogger and platform strategy
manager for MYOB suggests proving your value proposition with a handful of
clients before broadcasting your intentions to the world. And the most obvious
way to do that says Greenwell, is simply to ask your clients:
❏ What parts of your business do you feel you need help with?
❏ Would you be interested in finding ways to improve your cash flow
easily?
❏ Would you be interested in a review of your business assets and
prospective purchases?
❏ Do you want to know more about SMSFs?
❏ Have you thought about succession planning?
❏ How would you feel about regular check-ins regarding your business
finances?
Source: http://www.accountantsdaily.com.au/
So it’s as simple as adding those elements to your services roster and roaring
ahead, right?
Probably not. And the issue may be you.
Get educated
Accountants typically
provide customers with
three distinct but
overlapping areas of
expertise:
Accounting/record keeping,
tax advice, auditing. Now
advisory is being added to
that list.
Get educated
5. Confidence game
“Most accounting practices don’t know enough about
themselves, and their practice,” the report says. “They
don’t have a clear understanding of what they can offer,
who their target client is, and how much to charge. Before
accountants are ready for advice services, they need to do
their homework.”
Margaret Holmes, CEO and director at Engine Room puts
it in stronger terms.
“The fact is, not everyone is qualified to do advisory
work,” she says. “Some accountants aren't even qualified
to do accounting!”
The issue, she says, is experience.
“So you’ve run an accounting practice, but what do
you really know about running a business? What do
you know about all the sales, marketing, HR and all
that stuff? What about launching a product or
promotion, or any of that top line stuff that they've
never had to do? That's the real challenge.”
Luckily, with diligence, accountants can develop ‘real
world’ skills while still keeping their day jobs.
“The secret is to get exposed to the ideas that can
form the basis of your advisory,” says Hamish
Mexted, Wellington-based accountant with iif. “Go to
every meetup you can go to, every entrepreneurial
meeting, get out of the office.”
“Advisory isn’t about being able to do a capital
analysis. Advisory is knowing how to deal with people
and knowing what's going on with them, so you just
need to be able to talk to people and get comfortable
having those conversations.”
“That's really what they're really paying us for.”
Bstar's Accountants Research
Report 2016 says that 81% of
accountants lack confidence in their
ability to deliver advisory services.
6. How much should you charge?
While accountants often bill on a simple per-hour basis, Colin Dunn, accountant and contributor to Accountants
Daily, says that the underlying principle when pricing business advisory work is this: “The price must be based on
value, not time.”
“What this means is the more you can quantify the value to the client, the easier it becomes to price the job,” he
says.
Consider this: Most clients don't care how long it took you to produce a compliance service - they simply want
the result. So when it comes to discussing the value of your advisory services, talk about what’s really important
for your clients - what’s in it for them. A conversation about outcomes is a conversation most clients are very
ready to have.
Dunn points out that this has three important ramifications.
1. You should price to the customer: The value for similar projects can be different from client to client (If
you save a client $20,000 you’ll charge less than if you save the client $200,000)
2. All value is perception: The price you charge is a negotiation between the client’s perception of value and
your belief of the value you create.
3. To price a piece of advisory work you must truly understand what it means to your client (Is it a
make-or-break piece of work for your client? Or just a nice-to-have?)
At the end of the day it again comes down to communication. Spend time having your client articulate what the
work means to them. Similarly, communicate the value well to your client in the beginning and go from there.
Read Dunn’s full breakdown here:
❏ Advisory and pricing
Further reading:
❏ How to position, price and sell business advisory services (podcast)
Clients value good advice. It’s
ironic then, that a common
complaint from the industry
is that clients are often
unwilling to pay for advisory
services, which they see as an
unpaid add-on, rather than a
stand-alone service. So given
the sometimes gulf between
clients’ and advisors’
expectations, what should
accountants charge for
advisory?How much should you charge?
7. Position yourself
“Ask yourself the question,” says Angus Ogilvie, CEO of
Generate Accounting. “‘What is it I’m doing that's going
to make a difference to the client's business?’”
“What too many accounts fail to do is actually explain
what advisory is. They too often talk about waffly stuff
that's essentially ‘sell more’ or ‘buy at a better price’.
They just talk about ‘helping you build your business’ and
that's not really precise enough. Most business owners
really just need a firm plan.”
“Our clients come to us because we portray ourselves as
advisors online and in the way we talk to people,” says
Holmes. “The biggest problem for most accountants is
that they don't know how to sell. If you can't have a
good conversation to sell your services, and you aren't
prepared to learn those skills, you will be stuck doing
compliance work because the customer doesn't always
know what they need.”
“You can't go in and say ‘I'm going to add numbers up
and come out with an answer. You need to make them
understand what the numbers are made of.”
It’s common enough wisdom, but in 2016
content creation, ‘thought leadership’ or
whatever you
choose to call the sharing of your expertise, is a
crucial step in creating and nurturing long-term
relationships with advisory-seeking clients.
It doesn't have to be complicated, and there’s
no need to over-commit yourself, but it has to
be consistent. The secret to good writing? Write
what you know. It’s the surest way to add value,
build credibility and trust.
Staying on point, or, at least staying on message is the
key to attracting advisory-hungry clients and converting
current compliance-focused customers into advisory
consumers.
“When we don't get out value proposition right is when
we haven't sold it properly,” says Mexted. “Sometimes
we’re good at it, sometimes not, but we know that it's
about making it a part of every single one of our
conversations. Yes, its social media; yes, it's blog posts;
but it’s really about making it a part of every single
conversation. To us, compliance and advisory are one
and the same. Our whole model has to be geared
around it. It's not the selling of a different set of
products. It is the product. That’s where other people fall
down.”
For inspiration, check out these examples of who’s
doing the content thing best:
❏ Kelly Phillips Erb
❏ Tax Talk
❏ Don’t Mess with Taxes
8. Use tech to help you master soft-skills
In a service-based industry, the soft-skill is essential. Many accountants however openly admit that they have a
great deal more technical than social skill.
That’s nothing that can't be managed however.
“The universal for all business owners - whether they wear a suit or a tool belt - is: ‘I don't know where my money's
gone’,” says Ogilvie.
“With a good piece of analysis software you can break that down and that's what an advisor’s clients are looking
for. It’s your job to bring these numbers alive for the client and give them meaning. The the client will see, ‘Oh, I can
make a quid here’.”
Mexted concurs:
“Tech can give the client a whole bunch of data - Xero for example is really good for that - but they don't get the
human element around it and that’s what really important. The role that technology plays is giving us the raw data.
We then need to tell the story and paint the picture to help our customers make better informed decisions.”
Watch:
❏ Strengthening Soft Skills - Andy Wible, TEDx
❏ Soft skills guide
❏ Ultimate Guide to Soft Skills
9. Marjorie Adams, Fourlane CEO and Forbes contributor, says that what you must avoid at all costs is insincerity.
“Organizations with great customer relationships are able to grow their businesses without gimmicks, fee cuts or
special treatment,” she says. “You have to be good at what you do, of course, but having a truly successful business
is based on one simple concept: trust.”
The way you do that, she says, is through three key concepts: Service, consistency and transparency. Furthermore,
don't let your rush to demonstrate proficiency get in the way of building trust. Is the early stages it’s much more
important to listen and learn exactly what your customer is looking for than to anticipate solutions before you fully
understand their problems. (Discipline around listening will go a long way towards your pricing strategy too - see
below).
Repeat this mantra: It’s more important to be engaged than it is be right.
For another take on building trust, read this fascinating life-hack courtesy of the Harvard Business Revue, about
emphasising similarly in business relationships.
Read:
❏ Marjorie Adams’ Three Ways to Build Customer Trust
Watch:
❏ 3 ways to build trust (video)
❏ Building Trust - James Davis (Tedx)
“Trust”, said Stephen Covey, “is the glue of life”.
While expertise and skill may be what attracts customers to accountants for compliance
services, advisory is a different beast entirely. Trust is how you gain advisory clients and how
you keep them.
Build trust
10. More about the tech
“The skill,” says Ogilvie, “is being eloquent enough to
explain what the client needs to do. So some of it comes
down to presentation skills and the ability to impart this in
layman's terms. Accountants mustn’t talk jargon to clients,
or talk in numerals which the client doesn't understand.”
“You need software that can can supply the data in either
graphical or visual terms. Even a basic traffic light system -
green is good, red is bad.”
Note: Debtor Daddy is currently building a free dashboard
tool for accountants to provide cash flow and debtor
analysis to their clients. Such tools take seconds to
implement and provide real value for clients. (Click here to
be alerted when the dashboard is released).
Advisory companies should be tech-centric
companies. From client reporting to streamlining
your accounts receivable, cloud-tech is an affordable
way to free up time and tighten up processes.
“Technology should play a huge role in advisory,”
says Ogilvie.
Too often accountants’ advisory meetings lack the
necessary structure to provide clear, concise,
actionable advice for the client, and that can be
provided with the software.
“Software can create the agenda,” he says.
“Spotlight, Fathom and Crunchboards are the big
three players, but it doesn't matter which one you
use. The software pulls that data out of the cloud
and instantaneously tells you what you have to talk
about with the client.”
“There needs to be some rigour around advisory
meetings,” he says. “Things that get covered every
time and questions that get answered: ‘Did you
meet your numbers?’ A good software system is
going to flag the important issues: ‘You’re going to
run out of money soon; Your clients aren't paying
you; You need Debtor Daddy; You're paying your
creditors too soon’. These are the things you need
to be telling your clients.”
You’ll need to put aside time to think
carefully about how you’re going to
incorporate new services into your
day-to-day offering and to put
processes in place to streamline that
workflow. Offering advisory is not
about trading one yoke for another.
Simply put, if you’re overburdened by
the demands you face with your
compliance-based activities, you
won’t be able to create value in an
advisory capacity.
11. Identify and grade your clients
Our Why we pay and why we don’t survey has revealed some reasons for customers not paying:
● just under a quarter of people say their invoice shows incorrect items or amounts
● a quarter of people don’t pay because the invoice was sent to the wrong email or person
These portions are very large, especially considering the fact that these problems are avoidable.
So it’s important to reach out to debtors if you find your emails aren't having much effect.
Companies such as Invoice Hunter will give clients a chase up phone call - a good option to
consider.
Your next step is debt collection. The general consensus is that debt collection agencies are
serious, and they are - but when people don’t pay your bills this is serious in itself.
Debt collection agencies offer a range of services such as:
● debt resolution - reaching out to customers who are in arrears (including face to face);
● legal services - litigation on behalf of clients;
● field services - face-to-face meetings with defaulting clients;
● purchasing your debt - larger companies have the option to sell their debt to the agency
to immediately recover a portion of the debt owed to them.
Using an agency is worth looking into for the big bills and as a third party, they are removed
from the situation and can make objective decisions regarding the best approach to take when
getting you paid - whereas you’re probably a bit close to the situation to make objective
decisions.
Debtor Daddy can help with the pre-reminders and post-due invoice emails. By linking in
with your accounting software, you can set everything to automatically send out and
then you don’t have to worry about it. However, this can realistically only go so far -
maybe a customer supplied you with an incorrect email address, or they receive 100
emails a day and never check them. So what steps should you take?
Identify and grade your clients
12. Checklist
❏ Provide real, actionable data: Nebulous, vague advice is difficult to action and problematic to bill for.
Provide real data points, such as the Debtor Dashboard too, for your client during every meeting. Keep it
simple and only supply them with as much information as they need to make informed decisions.
❏ Be action oriented in your advice: Provide clients with a ‘to-do’ list that they should have completed by the
next meeting.
❏ Recommend the tech that matters: Identify your client's pain points and recommend appropriate solutions.
If their debtor days are too many or if they’re having cash flow issues, suggest a debtor management tool
to automate the invoice chasing process. Similarly, if they’re failing to retain customers, point them in the
direction of a suitable CRM system.
Sources
❏ https://www.sageworks.com/blog/
❏ https://www.entrepreneur.com/article/225903
❏ http://www.accountantsdaily.com.au/columns/8979-accountants-shift-to-business-advisory
13. About Debtor Daddy
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Debtor Daddy picks up where the invoice leaves off, taking the
hassle off your clients, so they can focus on making money
instead collecting on debts.
Take a free two week subscription to try it out yourself. There
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