It’s no secret that advancements in technology have resulted in the accounting industry taking some huge steps forward recently. These advancements have driven some big changes in how most accounting practices across the world operate, and unlock accountants’ potential as advisors.
The need for compliance services isn’t going anywhere. Clients will always need help with things like tax-related matters. In fact, Xero’s internal data indicates that accountants who embrace technology to evolve their practices are growing revenues by 11.5 percent. Advancements in technology mean that accountants no longer need to spend as much time caught up in the weeds of compliance-based tasks. Increasingly, we’re seeing accountants’ time freed up, enabling them to evolve towards true advisory services if they desire.
So, what does the evolution from compliance work to complex advisory look like? It pays to look at it as a journey, one that has several stages. Any major change in how your practice operates will not happen overnight.
Walk the talk; practice what you preach; or, "eat your own dog food"
To be great advisors in any industry, first you need to truly buy into your own products and services, or those you recommend. If you want to take your clients over to the world of online and apps, first you should make sure you are part of that world.
It seems like a strange saying, but "eat your own dog food" simply means that companies should use their own products and services where possible. It’s a good mantra to keep in mind no matter what industry you’re in. If you or any of your employees don’t use your business’ own product or service, change this as a matter of priority – you are bound to identify some improvements that could be made to improve the user experience.
Similarly, in order to best be able to expand your advisory, you need to have experience with what you’re recommending. I’ve worked with many firms that are busy investing in new brands and building great websites to tell their new advisory story. They’re advertising strategic planning, business planning, goal setting and advocating regular performance check-ins with clients.
It sounds great on paper, but what’s scary is the number of these firms that simply aren’t following their own advice.
How can you offer effective business planning for clients if you don’t do it for your own business? How can you genuinely position the cloud as an opportunity if most of your internal work still sits on a desktop or server? Why would you advocate a product or service if you don’t believe in it enough to use yourself? To be able to sell a product or process, you really need to know its ins and outs, and that’s usually part and parcel of using it regularly.
If you’re not walking the talk, now is the time to take a look at your business processes and identify areas where you would benefit from taking your own advice. If you’re in app advisory, use the apps you’re recommending. If you want to improve your business planning uptake, make sure your business has its own robust business plan.
Map out your pathway
Before you map out your pathway, it’s important to consider what your starting point is and where you want to go. What is your foundation? Are you currently offering simple advisory, like budgeting, forecasting or tax compliance? Or are you further down the road, offering complex advisory — business development, strategic consulting or startup mentoring — but looking for ways to provide this more effectively?
Just getting started? Aim to scale
If you haven’t started along the advisory pathway, a good first step is to aim to scale your current service to serve more clients. If you haven’t yet taken your business online, now is the time to jump in with both feet— this is the gateway to really improving your practice’s efficiency.
By connecting with apps and cloud software such as Xero and its partners, you’ll be able to digitize your business and rethink your compliance workflows. We routinely hear about clients experiencing time savings on compliance workflow of 40 to 60 percent — this frees your practice up to take on more clients, and expand from compliance into simple advisory.
From scaling to simple advisory
Simple advisory is the first chunk of the advisory journey — basic business analysis, forecasting, tax advice and regular engagement. But here’s the thing — many advisors already offer these services. They have been for years.
Tax planning, budgeting and forecasting is not new to the accounting profession. What is new, however, are the tools available to accountants. Previously, most of this simple advisory was completed in spreadsheets and ledger books. More advanced technology existed, but was usually reserved for larger clients or businesses due to cost.
With this type of technology becoming increasingly prevalent and affordable, online compliance is easier and cheaper than ever, and that’s really exciting. More clients, such as the smaller mom-and-pop businesses that are dear to Xero, can now get the time-saving benefits previously afforded to large businesses. These benefits open up smaller accounting firms to not only increase their client base, but to give their clients more value for money. Tasks that previously may have taken several hours per week, can now be completed in a fraction of that time. This extra time opens up the capacity for advisors to offer more complex services to their clients.
Let’s get complex
If you’ve been following the above path successfully for a while, you might be eager to start looking into new revenue opportunities. Taking your business online, scaling it, and then streamlining your compliance work should have increased your capacity, and grown your client list. Firms that invest in the journey — from building a solid foundation of practicing what they preach, to scaling, to simple advisory — have the competitive advantage and opportunity to pursue countless new revenue opportunities.
So, if streamlining your compliance business has given you more capacity and a larger base of clients that are online and connected, you are ready to start building capability to capitalize on many new revenue streams — whether internally or through outsourced partnerships.
There are so many options: full business development, strategic consulting, vertical plays, startup mentoring, full virtual CFO, technology consulting, capital raising and more. We know small businesses that are ambitious about growth want these advisory services. We know that accountants are small businesses’ most trusted advisors. It’s time to use the knowledge and extra capacity you’ve gained to become a really valuable business partner for your clients.