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Do you provide advisory services?

Take up and what do you do?

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Do you provide advisory services to clients? What does that entail? My thinking is:

  • Management Accounts (quarterly/monthly)
  • Budget setting
  • Cashflow forecast
  • Help with Business Planning 

If you provide advisory services to clients, would you mind sharing your experience? I am thinking:

  • What is the turnover of clients who buy advisory services
  • How much do they pay
  • What did you do for your clients to take up these services. 
  • Average hourly rate?
  • How do you sell advisory services to clients? 

I am very much a compliance factory approach. I switch off when I read Practice Gurus material on this subject. 

It would be good to hear from those who are doing it. 

Replies (13)

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By Slim
30th Nov 2017 19:45

For basic management accounts we charge £200 per year, so £50 a quarter, not a great fee earner but not that hard to produce either.

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Replying to Slim:
By Ruddles
30th Nov 2017 19:58

For meaningful management accounts we charge a minimum of £500 (per month for monthly)

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Replying to Slim:
By andy.partridge
30th Nov 2017 21:34

Do you really mean management accounts?

What do you provide that is going to help your client make better business decisions . . . for £50 a quarter?

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Replying to Slim:
By Slim
01st Dec 2017 08:11

Like I said that is for basic management accounts, which are quick to produce. This is actually very profitable for us.

Larger clients who want more information, we charge approx £1000.

These are the two sweet spots for us.

As for other advisory services, it’s always the same clients who are willing to pay worthwhile prices ime. I have thought about focusing on just these clients, shouldn’t affect the bottom line too much.

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Replying to Slim:
By JCresswellTax
01st Dec 2017 09:56

£200 per year, jeez that's cheap!

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Replying to JCresswellTax:
By MissAccounting
01st Dec 2017 10:12

JCresswellTax wrote:

£200 per year, jeez that's cheap!

Indeed and the poster said its very profitable for them? They would get about half an hour of my time for that...

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Replying to MissAccounting:
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By tom123
01st Dec 2017 10:34

I am pretty sure it would just be sage standard P&L and BS for that price. (or whatever is used for the bookkeeping)

Management Accounts are a little bit more than that to my mind.

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Man of Kent
By Kent accountant
30th Nov 2017 21:30

Do you provide advisory services to clients? Yes
What does that entail? Depends what they want
My thinking is:

Management Accounts (quarterly/monthly) - Yes
Budget setting - yes
Cashflow forecast - yes
Help with Business Planning - yes
If you provide advisory services to clients, would you mind sharing your experience? I am thinking:

What is the turnover of clients who buy advisory services - ranges from £150k to £4m
How much do they pay - ranges from £75 a month to £600
What did you do for your clients to take up these services. - Listened to them and discussed with them what they needed
Average hourly rate? N/A
How do you sell advisory services to clients? Meet and talk with clients. Ask them about their business, tell them how we can help.

Simples ;o)

Thanks (2)
By Kim Jong Un's Hair
30th Nov 2017 22:53

Everything you list are just tools and reports with which you may provide advice. They aren't an advisory service.

An advisory service needs some advice and interpretation of those reports and, to my mind, need to be considered in view of the business' objectives which may range from something as simple as "make profit" to a more specific objective of "increase sales of product x in region y".

There isn't a formula for it. You need to engage brain.

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Replying to Kim Jong Un's Hair:
By Slim
01st Dec 2017 08:12

Agree wit you, and this is where the good fees are.

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By Glenn Martin
01st Dec 2017 14:49

FT everyone offers or (claims to) to do advisory services.

The term is well over used.

First, don't jump on the bandwagon as you feel you have to and don't have the skills in house to do it justice.

There is nothing wrong with operating as a compliance factory MTD is going to increase the level of compliance require so that sort of work is going to be around for some time yet.

The advisory sector is a crowded space. In North East you can employ a newly qualified accountant for £25k so a business does not have to be that big before the £18k bookkeeper is replaced with an in house accountant who should be able to provide all the advice the owners need.

So the space that people are big enough to need extra advice and before they need an in house accountant is quite a small area and everyone is chasing it, ultimately driving price down.

Also a good compliance service should include pre tax year end reviews/pension planning etc which is as much as most clients want.

For me the sweet spot I have found is by being an alternative to 4/5 partner old school firms that still knock around locally. They may charge £4k-£5k for a one per year compliance job for a family business.
Compared to that I can offer the same service for less, but just with more contact and no hourly billing, or charge just slightly less and then give them an "enhenced Xero" based service where they get a good quarterly report pack and a lot more hands on contact, so a better job for similar fee.

Most family based business who are just looking at incremental growth in size just want a good job doing with support when they need it but more regular information, and appreciate you working with them "in year" as opposed to only working on historical figures.

As I have some industry specific skills from my FD days I do have some true advisory work in leisure where I do a lot of KPI improvement and strategy planning/ acquisitions etc for some clients who have an external auditors who deal with the compliance work.

I look after about 120 clients now of them, I would say 15 I am heavily involved with in an advisory capacity, I have another 15 where I do enhenced reporting/profit improvement. I have maybe 10 in the youth team where I am looking to bring through next year onto additional services. Then I have 70/80 standard compliance jobs which my main focus is just getting them into shape for MTD without having to pass massive fee increases onto them.

I would like to get into a position where I only review and deal with client contact on the compliance work and spend 50% of my time on the better stuff which I prefer.

Whilst a lot of people boast they are full advisory practices I suspect the truth is the services are maybe used by the top 25% of clients, and beneath it all beats the heart of a compliance factory, with a few exceptions like the guy from FD Worx who has a genuine VCFO only practice, but he had a background in banking so probably had access to a better client pool, more suited to higher level services than your standard start up sole trader accountant..

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By Portia Nina Levin
01st Dec 2017 11:03

More of your conversation would infect my brain.

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By Jack the Lad
05th Dec 2017 16:08

How long is a piece of string? Also how much are your hourly rates?
Some services may be quantifiable in terms of time, so easy to calculate a fixed rate, monthly or quarterly, which is reasonable for you and the client.
Others could well take many unquantifiable hours. For those services, I always charged at my "special" hourly rate, sending regular detailed bills, always with a covering letter setting out what had been done, and the benefits to the client.

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