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5 myths about advisory – part 1

8th Mar 2024
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Are you running an accountancy practice? Or is it running you?

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AVN’s Shane Lukas recently interviewed Gloria Murray of Xeinadin Murray Associates to find out how this small Scottish practice has made such a success of delivering advisory services. 

5 myths about advisory - Gloria Murray photo
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The move into advisory is a huge opportunity for accountants. In fact, it’s my belief that accountants who don’t make the shift will ultimately get left behind, with a shrinking clientele paying rock bottom fees for compliance services. 

But there are many myths around advisory that can make it seem impossible to break into for the average accountant. What became clear in the course of Gloria’s interview is that many of these myths are just that, myths. As she shows, accountants already have the skills to be successful in this area. 

Read on to see why five common myths about advisory are simply untrue.  

But before we get into that, how do you actually define ‘advisory’?

Here’s what Gloria has to say on this:

“Advisory means to me just going above and beyond the numbers. Accounts tell a story. Sometimes it's a really bad story. Sometimes there's a really good story. Sometimes it tells you a story about where a business could go. And so for me, advisory is just interpreting the numbers for the client. It might lead to business growth and that's what I do with clients, or it could be just so that they understand exactly what the numbers are telling them.”

And that’s it in a nutshell. Advisory is going beyond the numbers and helping your client understand what they mean for them and their business. Then helping them to improve those numbers and make a really valuable difference to their lives. 

Myth 1: I need specific skills to make it work

Advisory starts with simply asking your client questions. What really matters to them? What do they want to achieve? 

Gloria’s approach is well within most accountant’s comfort zone: “When I first started off, I would have a year-end meeting with the client and use Business Potential with them (AVN software that shows how small changes to their business can dramatically increase profitability). We could then get into conversation about where do you want to be in your business over the next year?” 

“Normally, they're very focused on turnover and sales but I try to bring it down to profit and where do you want to be personally. So I just started having conversations with clients about what their personal goals were and then extrapolating that into their business, using Business Potential. And as I grew in confidence, I would start to offer it as one-to-one sessions.”

Understanding what the client wants their life to look like is the first step into advisory.

Myth 2: It only works for big clients

Perhaps only the bigger clients will want the whole range of advisory services. But small businesses still need help with their financials.

Gloria has a great suggestion: “If you've got a very small client who's just become VAT registered, it's a very good time to step in and say, ‘Let's look at doing some meetings and a cash flow projection for the next 6 months to a year, just to help you transition from this scary period of becoming VAT registered.’ Often they’ll say yes to this. And if not, at least you've put that into their mind, and they know that you offer that as a service.” 

“Sometimes compliance clients become advisory clients as they grow. From a conversation I'll have with them at year end, they suddenly realise that actually they can do more with their business. If I've got a client who is suddenly deciding that they want to take on bigger premises, I'll say to them, ‘Have you thought this through? Have you got cashflow projections?’ And sometimes, it could just be meeting with a client to discuss their cashflow once a quarter but again, from those conversations, you're always looking to give them suggestions about areas of their business that they can improve on.”

In the next article we’ll look at three more myths about advisory: it only works for big practices; you have to be an expert in your client’s industry; and your clients won’t pay for it. Read Part 2 here.

The full interview with Gloria is available to watch on the AVN website. We cover a lot more ground and answer questions directly from accountants in practice so it’s well worth watching – watch here Advisory is a scary word for many accountants