[IMGCAP(1)] Exhale. You’ve made it through another busy season. Now it’s time to recharge and reassess the bigger picture.

Where are the growth opportunities for your firm? What is holding you back?

Increasingly, firms are turning to advisory services as a way to differentiate and generate new revenue. Advisory and consulting services revenue growth was up in 2015 for 32 percent of small- and mid-size North American accounting firms, according to the latest International Federation of Accountants (IFAC) Global SMP Survey.

Making the shift from crunching numbers to providing consultative services is a major undertaking. Before you set sail, stop to map out the best route and ask yourself these key questions:

1. Who will lead the charge?

Management-level sponsorship is crucial. There may not be a partner available to run the advisory practice, but there must be at least one key firm executive who champions the shift.

Where the leader comes from need not matter. It’s passion and commitment that will make the difference. A leader’s excitement (or lack thereof) will seep into everything.

One of the biggest mistakes firms make is the “half commitment.” In other words, the leader is asked to wear two hats: straddle existing client work while launching the new advisory practice. Starting up a new business line requires time, energy and intense focus. If you’re serious about it, it can’t take a backseat to client work. You don’t want your leader to burn out at a time when they should be getting other people excited.

2. Who will participate?

Is there interest in advisory services among employees? Having the right skill set for advisory work is an important consideration for success, but so is having the desire.

The summer is opportune for performance reviews and goal-setting. Ask employees what interests them. Are there new areas they would like to get into? These questions aren’t asked enough.

You can hire from the outside or identify employees within the firm that are interested in spearheading the cause. I have found in my career that auditors tend to have the most natural skills to transition into advisory work. They’re used to reviewing financial statements for anomalies and asking questions. Shifting to advisory is a natural evolution of the work: instead of delivering a report, you’re sitting down with clients to discuss the report in the context of improving their business operations.

3. How will you get the word out?

Everyone wants to start off a new business with a bang: Issue a news release! Shout it from the mountain tops! However, a steady, slow-building effort is more likely appropriate.

The first priority should be to create a smart business plan. Build a strong foundation through intelligence gathering. Attend conferences and talk to potential clients, referrers and other accounting firms to get a lay of the land. Invest the time to really understand who you are targeting, what you are delivering and how you’ll deliver it before you start pushing out the news.

Give the advisory services leader appropriate time and space to develop their plan, avoiding chargeable hour or revenue goals until things get off the ground.

Internal engagement will be key to success, so allow time for education and questions before going out to clients. A few options for employee engagement:

  • Identify specific strategies that can help upsell advisory services and share those ideas across the firm. For example, suggest that tax managers flag client problem areas as they review financials. A simple note to the client on a tax return that says, “noticed inventory turnover slowed down; let’s have a discussion,” could open a new door.
  • Conduct “lunch and learn” sessions with managers across the firm to demonstrate what the solution looks and feels like. They likely have clients that will benefit from the service.
  • Review every tax manager’s client list and discuss possible targets.

4. How will you encourage participation within organization?

The right incentives will need to be in place to encourage participation and cross-selling. The best way to start up a new service is to sell it to existing clients. However, that raises sensitive questions. How will an audit or tax partner that refers a client to advisory services be rewarded? There must be appropriate compensation for those who have built the client relationship and gained the client’s trust to consider new avenues.

An expanding relationship will also invite concerns from the main client manager about their involvement. How will the referrer be kept in the loop once an advisory project is underway? This holds true whether the referrer is someone from inside or outside of the firm. Have upfront conversations with those referring business your way to agree to the level of detail they’d like about the project to ensure they feel comfortable. Do they want to be copied on emails? Set a monthly call? Be flexible in how you work.

5. When do you consider outside help?

Perhaps your firm doesn’t have a luxury of resources to commit to doing some of the market research and planning legwork. Fortunately, there are outside resources available, such as firm growth programs, that can help develop a change management plan to move into advisory services and identify the necessary steps to achieve your goals. You can also decide to hire an outside advisory practice to work with you on your first few clients until you are ready to go at it alone. The Information Management and Technology Assurance (IMTA) section of the American Institute of CPAs (AICPA) is another useful resource, particularly as it relates to how to leverage technology in your shift to advisory services.

Amy Vetter is the global vice president of education and head of accounting, USA, for Xero.


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