There is lots of talk about accountants shifting from compliance to advisory work within their firms. But what does it mean for a typical small practice to go from compliance to advisory? What should you be thinking about in your firm? Are advisory services for accountants worth your time and how might you start?
Is there really a shift from compliance to advisory?
A few years ago I remember several discussions at accountants networking events in London where the general feelings were (and I quote one delegate) 'the professional bodies have been banging on about this for years, we don't need to worry'. Since then the pace of change has accelerated and I suspect it will accelerate further. Do you need to worry about changing the emphasis in your firm, I don't know. Do you need to think about it and what it might mean to you - yes.
What's caused this shift, and why has it accelerated?
- Dramatically faster uptake of cloud accounting systems: Many clients can now get more data than ever before from their accounts (not their accountants). It's also easier to get bookkeepers to keep them up to date. If you haven't yet embraced cloud accounting yet, is it because you never will?
- Client expectations: Several accountants confide that clients wonder why their accounting fees remain so high when cloud systems are doing more work. What are clients expecting of you, really expecting? If all they want is the comfort of knowing their accounts are legal and some ideas on saving tax, are they prepared to pay what they used to?
- Competition: Are there more small firms than ever, as accountants leave industry and set up on their own?
- MTD: It's a big change, but when it's all done, what will people expect from you?
- Technology: We seem to be turning into 'datavores'. Data just used to sit on the PC. Now mobile apps give us the ability to look at figures and enter data on the go.
Advisory services for Accountants
I love walking around a country park near my home. One walk with a friend was spent in a state of violent agreement, saying the same thing, about different birds, but giving them the same name! We shouldn't have been disagreeing with each other, we each had our own names for the same things. Once we sorted our terminology, all was sorted.
The point of this story about definitions. How do you define advisory services for accountants? Many accountants say they have been advisers for years. We spent time on this with our Accountants Millionaires' Club mastermind last year and they concluded that advisory services go much deeper than they previously thought.
Advisory services for accountants will help you to stand out from the crowd. It will get you really focusing on helping clients achieve their ambitions. That's not the same as telling them what their accounts mean, or what you think they should do. Anybody (or one of the upcoming artificial intelligence systems) can offer advice based on what you think somebody should do. A skilled coach asks great questions, that help the client understand in their own mind. After many years of coaching, I have realised that questions are more powerful than advice.
My link with business coaching is intentional. If you have good coaching skills and already have client data, you are in a far better place than most business coaches to help your clients. Are you ready to move your practice along a spectrum that starts with compliance, goes through 'advice' and ends getting paid to ask really powerful questions? If so, you are ready to start adjusting the processes in your firm, so you can do higher valued work, while your team deals with data integrity and some of the processing work.
The future - it gets worse?
- It becomes easier to move accountants. Old desk-based systems and physical data made it harder to change accountants than cloud accounting does. In the future, client service, value delivery and relationships will be the thing that stops clients changing accountants.
- The big button: Can it really be long before the new cloud-based client systems will allow them to submit statutory accounts and tax returns at the click of a couple of buttons? Whether you, or they, click the button - it's lower fees for you.
- Compliance work becomes even more commoditised: BBC News ran a story (the jobs robots will steal first) where accountants featured prominently, due to ever-increasing computing power. Even if you don't totally believe that story, think about computing power being better able to process and check data. Will HMRC and cloud systems work together, especially as clients are more used to entering data into the internet in all other areas of their lives. What will your role be? Fees for compliance work will drop.
- Fees will change: Fixed fee is normal for many accountants, and alien to others who still charge by time. But if compliance becomes really commoditised and real advisory services become your strategic platform, innovative value-based pricing models will become important (and the skills to sign them up).
- Marketing will change: If you want to develop advisory services, your marketing programmes need to change. Demonstrating your expertise with webinars, mastermind groups and more speaking will become more important.
I think these points are only going to increase the importance of you charging for advisory services. Advisory services for accountants: what do you think and how will you start to re-skill yourself and your firm?
How does the shift from compliance to advisory matter for your firm?