Different accountants define advisory services differently. However, in simple words, it is the service where you provide guidance to your clients. This service can include simple discussions on various topics like taxes and risk consultation. It can also include complex discussions on financial reporting. You might have to prepare financial statements and analyze the business number. You will then have to get one-on-one with your clients to discuss these numbers, financial reporting issues, and how to improve them.
Moving forward, you might be whether it is a good niche to get into? Why should you provide advisory service to your clients? The simple answer is that all businesses need these services. Even today, many small business owners do not know their own financial data to make the right decisions.
This will be further explained through a study commissioned by 800 small business owners in Canada. The result was that most young adults have poor financial literacy. This means that they opt for advice as these people do not have knowledge of technical accounting. The small business owners also do not have a big finance team to help them out. So in order to attain their goals, they need advice from experienced people and companies.
So, let’s look at the top 3 tips for providing top-notch advisory services:
Regular Check-Up Calls with Every Client
It is surprising to see many customers only hear from their accountant once a year. That is at the end of the fiscal year. However, in this ever-changing world of business and technology, business owners should get constant feedback. To be honest, getting advice once a year is not sufficient at all. Regular check-up calls must be scheduled to review financial reporting. This helps you figure out different problems ahead of time. The best thing an accounting advisory firm can do is to review all the issues before the call. Then come to the call with a few talking points so the time of both parties does not get wasted.
Thus, such valuable advisory services can actually give a good insight into the numbers. It helps in coming up with new ideas and maintaining a closer relationship with your customers.
People think that advisory services are not scalable. However, that is far from the truth. If your services are productized in the correct manner, they can be extremely scalable. A very good example of this can be cash flow forecasting and budgeting services. This is something you can make more repeatable. Making it more repeatable means that now you can charge a monthly fee.
You can also do this by establishing a once-off price to develop, for example, twelve-month budget forecast. Do this on the basis of previous years’ reports. Yes, a lot of work will go into putting this model into place. However, once this is done, you can include monthly, quarterly, semi-annually, and annually budgets. Side by side you can perform budget vs actual budget to analyze the changes. Depending on the period the customer selected, you can set the meeting plan and have a more scalable service.
Teaching and Coaching
You must understand where your customers are now and where they want to be. Because only after that you can devise a plan to get there. So, when providing advisory services, you must help guide your clients and customers. You must keep them on track. Challenge their ideas to come up with better ones. And, lastly, hold them accountable yet be their sounding board and a firm supporter. This is because a lot of times, the customers are not financially literate to take decisions.
Coming to the conclusion, there are multiple reasons why advisory services may be needed. But the biggest one is that most of the time clients cannot perform on their own. As their accountant, you must provide them with tailored advice and opinions. By offering this valuable service, you are the guiding pillar in their accounting journey!