Should Your Accountancy Firm Offer More Advisory Services?
20th Apr 2020
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It’s no secret that the bread and butter of many accounting firms is providing compliance services, from accounts preparation to tax compliance work.
Thankfully, the advance of cloud accounting and tax preparation software has meant that such tasks, which used to take a long time to complete, can now be done much more quickly.
Despite these efficiencies, many accounting firms still face high levels of fee pressure, as pricing for compliance services have become more competitive. As such, it’s unsurprising if firms might be looking for alternative services that have good fee-earning potential.
Advisory work is one such option.
Why offer advisory work?
One of the principal reasons why advisory work is seen as desirable is because it typically commands higher fees compared to run-of-the-mill compliance work.
As such, firms that want to maximise their returns without having their staff work more hours might be better off by introducing at least some advisory work to the services they provide for clients.
What advisory services could my firm offer?
Just like compliance work isn’t all about completing personal tax returns, there are lots of areas that can fall under the umbrella term of “advisory services”. Some examples include:
· Tax planning and structuring;
· Business start-ups or wind-downs;
· Due diligence;
· Cash flow management;
· Detailed financial reporting and budgeting;
· Wealth management.
You don’t need to offer all the above services. Instead, focus on the advisory areas that you or your staff have experience with and are appropriately qualified to offer and start from there. For example, you might start with offering cash flow and budgeting services and see how things go from there.
Once you’ve decided what type of advisory work your firm should offer, think about whether there are any barriers that are holding your firm back from providing that service. For example, the volume of compliance work may be too high at the moment to introduce advisory pieces, or you may just not know how to pitch new advisory services to clients.
When it comes to managing the additional workload that advisory services will bring, try to decide in the first instance whether the advisory work offered will be fairly regular in nature (e.g. quarterly financial reporting services) or based around one-off pieces (e.g. due diligence work on a prospective business acquisition).
One-off pieces may be manageable, but if you’re going to try and secure more regular advisory work, consider whether it would be appropriate to hire additional staff during the transition period, or if outsourcing some of your compliance work might reduce any existing strains on workload.
Equally, adopting more effective working practices might be all that’s needed to manage new demands for advisory work – whether that’s better workflow planning or utilising new software to reduce the time spent on tasks such as tax return preparation.
In terms of marketing, odds are that there will be some existing clients that can make use of your new services. Target the clients that you think might be interested and make sure to screen any new clients to see whether they would be interested in advisory work.
Try to also speak and meet with your clients in person as much as possible. In practice, this might only mean meeting them a few times a year, but by meeting with them rather than corresponding via email you keep your client relationship strong, which means a better chance of landing advisory work when it is pitched.
Taxfiler is an award-winning solution that uses the cloud to help firms prepare and file accounts, tax returns, and Making Tax Digital for VAT returns. For more information, speak to a member of the team on 0330 2233 406 or email [email protected]