Four Reasons NOT To Add Advisory Services To Your Client Offering (And Why They’re Wrong)

At Malartu we work with accountants and bookkeepers to move from offering pure compliance services (bookkeeping, audit, tax work) to compliance plus strategic advisory services.


As you could imagine, we hear a handful of objections to offering advisory services, especially services that incorporate business strategy.

Earlier this week I listened to a podcast by Accounting Today where Todd Shapiro of the Illinois CPA Society addressed a handful of objections that CPAs and accounting professionals make when considering becoming a strategic advisor.

These objections aren’t crazy, they’re rooted in logic. They’re based on decades of experience from successful CPAs and bookkeepers who have built profitable businesses providing quality bookkeeping, audit, and tax services.

They’re not crazy, but they are wrong.

In this post I’ll echo the sentiments of Todd Shapiro and address four common objections to offering advisory services and a simple explanation to why those objections aren’t entirely reasonable.

But before we get to objections, let’s explain something. 

The difference between a strategic advisor and a trusted advisor

The term “trusted advisor” is, by any measure, the biggest buzzword in accounting. But becoming a “trusted advisor” is not what I’m talking about here. 

For decades, accountants have positioned themselves as their client’s trusted advisor. It’s not a new concept, and it’s not a bad thing. 

If you’re performing an audit for the client, the client knows it’s being done with the highest caliber of expertise. It’s getting done right.

If you’re preparing financial statements, they know they will be fairly reflected. 

If you prepare their tax returns the client knows they are receiving best-in-class thinking, they will be done correctly, and you’re maximizing their savings.

They trust you, therefore you are, and have always been, their trusted advisor. But if you’re just offering these services, you’re not their strategic advisor.

Strategy is about maximizing profits, whether through growing revenues or decreasing costs. Clients are not wildly successful because they had a great audit or their tax return was done to perfection. 

Sure, the audit may have gotten them that bank loan and the tax return was a nice savings, but those things don't materially impact their growth.

So how can you offer strategic advisory services to build value in your clients business? By reframing the application of what you already know.

kaleidico-26MJGnCM0Wc-unsplash.jpg

Why you should offer strategic advisory services

Most accounting professionals have had a relationship with their client for a number of years. It’s safe to say you know A LOT about their business.

In many cases, you know more about the financial well-being of their business than they do. 

In many cases, the client is trying to grow their business without a strong understanding of its financial well-being.

This is your opportunity to become a strategic advisor. This is where you can apply your wisdom and create real value for your clients.

Now, I’m not saying you should shift away from audit and tax services, that would be a mistake. Audit and tax are always going to be critical, but technology is taking a greater role in how these services are performed, and to ignore this shift, would be a critical mistake. 

So without further ado:

The four most common objections to offering strategic advisory services

Objection 1: I am super busy, I have audits and tax returns, plenty of money coming in, why do I need to do this?

This, like all four objections, is a legitimate line of thinking but is dangerously short-sighted. Anyone who says technology isn’t going to affect the way audit and tax services are done, is wrong. 

Within five to ten years, someone is going to figure out how to reduce the cost of audit or the tax return by a significant margin. 

While you might argue this will increase the margin of your service, the competitive nature of business in a free market means it will actually decrease the overall price of the service. Inevitably, someone will leverage that technology to offer the same quality service for a better price.

This will cause a race to the bottom.  

Objection 2: Isn’t consulting just one-off business? Taxes happen each year, audits happen each year, those are annuities. Why switch to something that’s one-off?

Two things here, the first:  Adding strategic advisory services isn’t an either/or choice. You can, and should offer both compliance and advisory services.

Offer taxes AND consulting, audit AND consulting. 

If you can add value to a client business along with an audit/tax service, you’re much better off. By shedding less profitable clients, you can free up your time to offer a higher level of service to a more profitable client. 

And second thing: Strategic consulting is regular work. If you’re a business owner and you optimize once a year, you go out of business. 

Strategic advice can be provided on a monthly/weekly basis. As a strategic advisor, you’re a sounding board for the client. Once a month, sit down and talk about the business. What’s going right? What’s going wrong? This type of model lends itself to fixed-fee, retainer pricing models and that predictability and peace of mind will work wonders for your client.

Objection 3: Audit and tax work is primarily about looking backward and confirming things happened and have been properly accounted for. Strategy is forward-looking, how would I do something so different?

When you boil it down, the skills you have developed doing historical analysis are the same ones you will use to offer forward-looking, strategic advice. 

In an audit, you look to see what’s changed. Same for setting a strategy. Great strategy comes from understanding things like margins, sales trends, utilization, cost structures, yields, etc. To develop an informed idea of the future, you have to study the past. You’re already doing that. 

Also, you can bet your business your clients are constantly thinking about the future.  

But they’re guessing. 

You KNOW what has happened (it has been your job thus far), use this data to understand trends, and use the trends to estimate what’s going to happen.

Chances are, your version of “Based on what I know, this is probably what’s going to happen” is incredibly valuable advice to your client. Advice they could have been getting this whole time.

Objection 4: My client will never pay for this. With my current services it’s straightforward pricing. I do the audit, they pay X fee. I file the tax return, they pay X fee. How do I even charge for this?

This is about understanding the value of your advice. If the advice you’re giving on a monthly basis costs $500-$600 and generates $2k-$3k? They will pay for it. That’s a great return on investment. We wrote a post on building a pricing strategy that’s worth a look if this is something you’re debating. 

Alternatively, you don’t need to overcomplicate the initial offering. You can start by introducing tools and strategy sessions for free a handful of times. When the client says, “wow, this is really helpful,” introduce the paid service. By this time, you will both have a better understanding of the value that can be provided. Just make sure to frame the free offering as a trial of the paid service, otherwise you’ll end up putting yourself in a sticky situation.

Finally, make sure to put tools in place to track the ROI of your service, from when it starts to at least a year from that point. This instills to your client that this isn’t a zero-sum game. It’s an exchange where you both win. You generate real value in their business while they compensate you for that value generation. 

Getting started

When it comes to your clients’ businesses, you know exactly what has happened and with the help of a few frameworks, can form a highly educated guess at what might happen in the future. 

Not to mention, you likely work with a number of similar businesses, so you can draw correlations to what is going on in a broader market.

Our team at Malartu has put together many resources for getting started on your path to becoming a strategic advisor, and our friend Heather Smith of The Accounting Apps newsletter put together a helpful list to simplify implementing business intelligence and strategic advising with clients.

Here’s where how to get started and helpful resources to boot:

  1. Start with clients who have already raised issues their facing and are open to trying a new solution: How to set your advisory implementation goals 

  2. Get familiar with key metrics that may offer insight into client challenges: 156 Financial KPIs for any business

  3. Ask questions that identify key issues in their business. Listen for what they are not saying: Ask these five questions to every client

  4. Start with a small issue, identify meaningful metrics to solving it, and move to the next: How we use KPI scorecards and dashboards to empower a data-driven team

  5. Start by mapping out the data structure in Excel. Identify metrics and KPIs that offer insight into the issue, record their calculation, and map where the data for those calculations comes from: How to turn KPIs into the ultimate dashboard

  6. Focus on helping your clients understand their data: The ultimate pre-meeting checklist 

Hire internal or external data experts to support this service offering. The Malartu managed services team can be leveraged to do the heavy lifting, surfacing useful information, and support your clients alongside your team. Learn about managed services here.