CPAs Beyond Accounting - How Can CPAs Add Value As Business Advisors?

These days, everyone seems to be talking about branching out from accounting to advisory services. While I’ve talked about how to launch a CAS practice before, what is the inherent value to gain as a CPA by offering advisory services? After all, it’s not something any CPA should take on without serious thought first. Let’s take a closer look at how CPAs can add value to their services as business advisors, and what the requirements are.?

Branching Out Beyond Accounting Services - What Are The Benefits for CPAs?

For many CPAs, offering business advice to your clients is nothing new. In ongoing meetings with clients, you’ve likely been offering advice and making suggestions for how clients can get more returns from their business operations.?

By choosing to formalize the business advice you give into specific services and offering them as additional value-based services, your accounting practice as a whole can benefit.?

Choosing to expand into the advisory sphere allows you to:

• Strengthen your existing client relationships - by spending more time with your clients and getting to know their business better, you can offer tailored advice that will help their business expand. This will strengthen your relationships with clients and embed a deep sense of trust in your ability to guide their business.?
• Increase incoming revenue to your firm - becoming your client’s go-to business advisor will bring in more work, increased fees, and eventually higher revenue to your accounting business.
• Add more value to your practice - Many practices focus solely on either accounting or CAS and base their entire business around it. Offering additional advisory services on top of standard accounting practices will help to position your firm as a trusted source of both services for businesses and increase its inherent value.?

How CPAs Can Add Value as Business Advisors?

As a CPA you already provide an important service to your clients. You have an established relationship and, chances are, your clients would prefer to listen to advice coming from you than from an external expert hired to run an analysis.?

While they may have the credentials, you have something equally valuable - your client’s trust. Leveraging your insight into their business combined with your accounting prowess to offer considered business advice can benefit your clients in several ways:

• Trusted, reliable advice - As a client’s CPA, you’re constantly working on their account, meaning you’re constantly reviewing the ins and outs of their business operations, as opposed to a hired consultant who bases their advice on a singular, large-scale review. Having first-hand knowledge of the stats puts you in the ideal position to give objective advice based on the data and your ongoing work.?
• Streamlined operations - As an accountant, you’re used to analyzing things on a granular level and that ability can be leveraged beyond numbers to processes and systems in the business. You can use this to help your client fine-tune and improve existing operations, reduce time lost and wasted, and optimize business productivity.?
• Increased profitability - To be clear, we’re not saying go into meetings with clients making promises about profitability. But we should be focusing our efforts on assessing current performance metrics, recommending how to improve existing processes, and forecasting future performance trends and potential roadblocks - all in the name of improving the client’s business profitability.

Becoming a Business Advisor: Steps for Success

While we won’t launch into a full explanation, we can make a few recommendations for how to get started on offering additional advisory services in your accounting firm. Here’s where the work really begins and this is only the tip of the iceberg - before going any further you’ll need to decide if being a business advisor is worth the time and effort to you.?

1) Define the scope of your advisory services

If you decide that offering business advisory services is something you’d like to do, you first need to define the scope of your services. Are your target clients ones you’ve onboarded already or clients you would like to onboard??

Taking on a wide range of clients for both accounting and advisory services will bring in more revenue initially, but opting for a niche focus will allow you to work more closely with clients within a specific industry, create a following and mastery, and generate greater scale and profitability in the long run. Businesses will usually expect you to have a deep knowledge of the industry they operate in to be able to leverage advice.?

Without extensive knowledge of a particular industry, you won’t be able to provide the types of useful insight that businesses will expect. To be a truly effective advisor, you’ll likely need to become intimately familiar with a chosen industry’s operations, risks, ideal customers, and regulations.?

Going the generalist route may win you more clients initially but taking a niche approach and focusing on advising businesses in a specific industry will help you win more long-term, high-value clients.?

2) Communicate clearly and manage client expectations

Make sure your clients understand exactly what they’re receiving from your advisory services - and what they’re not receiving. Communicate clearly with clients about the nature of your services and how they can benefit their businesses from the get-go.?

Answer any questions they might have and manage their expectations so you’re both aligned in terms of what you want to get out of your advisory services. Doing this from the beginning will prevent any misunderstandings from happening further down the road.?

3) Pick the right pricing strategy

Offering advisory services adds value to the client experience. It’s important that you pick the right pricing strategy to reflect the value of this service. This decision will likely tie into the overall pricing strategy you use for your practice.?

Keep in mind the time that it will take for you to analyze a client’s business data and procedures and come up with leveled reports and recommendations for growth and success.?

Make sure your pricing reflects the value of the service you’re offering. More often than not, clients who want to consult will be willing to pay the necessary fees for the invaluable insight you’re able to share with them.?

4) Invest in the necessary resources

As your advisory services develop and you begin advising more clients, you’ll need to be able to keep up with demand in both the accounting and advising spheres of your business.?

If you need to hire additional staff to help you keep up with accounting operations, invest the time and resources needed to do this. It will help free up your time to focus on providing valuable advisory services while maintaining the standard of accounting services your clients expect.?

You also can’t be stuck overseeing small, manual processes. Invest in the tools and workflows that will help your business run efficiently, especially as it begins to scale. For instance, Botkeeper automates all back-end accounting tasks , as well as front-end task management like bank statement fetching, document management, client communication, and password management, among others. This frees up your time and allows you to focus on providing better advisory services and building new and ongoing client relationships.?

Conclusion

Offering advisory services is not for everyone. It requires a lot of learning, preparation, and ongoing work but, if you’re willing to take it on, it can be a great way to deepen your client relationships, provide more value to their experience, and increase your firm’s profitability.?