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Advisory schmadvisory! … Just stick with compliance

20th May 2024
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Are you running an accountancy practice? Or is it running you?

AVN helps you to take back control of your practice.

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Change in the accountancy profession is inevitable. You've likely heard countless discussions about the need to adapt and the impending doom of the profession due to AI advancements. But the real questions are: Do you need to transition to providing business advisory services? More importantly, do you want to? Shane Lukas looks at the options.

Advisory Spectrum - AVN Inspiring Accountants - image of desk with booklet

The Reality of AI in Accounting

AI is not a future threat; it's a present reality. Accounting software integrated with AI is revolutionising how compliance tasks are managed, making these processes faster and more efficient. But these technological advances don’t mean that accountants are no longer needed. Business owners will continue to want a trusted, qualified professional to look after their finances.

As an accountant today, you are presented with two clear paths – compliance or advisory. So how will you face the future?

1. Advisory Schmadvisory!…Just Stick with Compliance

Embracing AI-driven software in compliance tasks allows you to enhance your efficiency and handle client work at an accelerated pace. 

This path offers stability and less immediate change. You won’t have to venture into unknown advisory territories – phew! 

 But, prepare for competitive pricing pressures as more accountants adopt similar strategies. The risk here is becoming part of a 'race to the bottom' in pricing and needing to manage a higher volume of clients to maintain profitability.

2.  Exploring Advisory: A Road Less Travelled by Many

Transitioning to advisory services using AI tools can seem daunting but it offers substantial benefits. 

It allows for more profitable client engagements and deeper relationships. Clients will value and appreciate your guidance in navigating their business challenges, leading to a more fulfilling professional life for you.

Debunking the Myths of Advisory Services

Many accountants hesitate to transition to advisory services due to common misconceptions:

"I need to know more about the client’s business than they do." 
"Clients don’t want advisory services." 
"I need to be a great salesperson to convince clients to pay me for advisory." 
“My clients are used to me giving them free advice, why should they suddenly start to pay me for it?”

These and many more common assumptions are simply not true (in fact we looked at common myths in two previous articles – 5 Myths About Advisory Part 1 and 5 Myths About Advisory Part 2).

The skills you already possess as an accountant are the skills you need to successfully deliver advisory services. You just need to use them in a slightly different way. 

When you position the service in the right way, take the right approach and ask the right questions, clients will appreciate the value you bring – and pay for it.

Weighing the Emotional Impact of Your Choices

The path you choose will impact you not just professionally, but personally too.

Option 1: Compliance-Focused Approach

  • Requires aggressive marketing and client acquisition.
  • Often deals with price-sensitive clients who may underappreciate your work.
  • Likely results in lower profits and longer hours.
  • Could lead to high stress and little sense of fulfilment.

Option 2: Advisory Services Approach

  • Utilises your accounting skills to their fullest potential.
  • Engages with fewer, more appreciative clients willing to pay a premium.
  • Enables life-changing conversations and deeper client relationships.
  • Offers higher personal fulfilment and quality of life.
  • Provides more freedom and enjoyment in your professional career.

The evolution of AI in accounting doesn’t spell the end for accountants. But it does mean a shift in how you can deliver value. By embracing AI and adapting to advisory focused services, you can enhance your practice, build stronger client relationships and lead a more fulfilling professional life. 

The choice is yours: adapt and thrive or stick to the familiar yet increasingly competitive compliance path.

Final Thoughts

It may not be lost on you that this article is ever so slightly biased towards encouraging you to shift towards advisory. It’s my hope that you’d do it because you want to, not because you have to. I firmly believe that accountancy is a noble profession that can make a profound difference to clients and you deserve to be really well rewarded for it. You’re much more important to clients than being a production line.

I recently created a booklet called The Advisory Spectrum and I’ll be writing another article about it on this platform in the coming days. But if you’d like to grab yourself a free copy right now, here it is: The Spectrum of Advisory