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Why accountants struggle with advisory work

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18th Aug 2015
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Before too long, says Profitable Firm founder Karen Reyburn, accountants are “going to get to a situation where you’re either a glorified bookkeeper or a business adviser”.

As a consultant to a new generation of digitally minded accountancy firms, Reyburn regularly works with practices where clients no longer pay for compliance, but sign up for monthly fees that bring them a service based around management accounts, dashboards and integrated cloud systems.

“Accounts and tax will become a small afterthought,” she says. “There are some accountants who are going to get a shock in a few years’ time if they haven’t gone down that route.”

Reyburn will be bringing this message to her sessions at the Practice Excellence Conference in London on 24 September. Her predictions flow very naturally out of the profession’s development during the past few years, she argues.

“It’s almost unnoticeable, but if we take the opportunity to step back at the event and look around, you can see that all the elements are in place to make that happen.”

Cloud accounting and the connection to a vast array of add-on applications have opened up the opportunities to do advisory services, she says.

“The cloud has connected the numbers to advisory services. If you put the foundational data in with a cloud system, you can bolt on reporting tools, dashboards and things like MailChimp and Receipt Bank to make the business owner’s life better.”

But Reyburn recognises that for many accountants there’s a significant gap between having that infrastructure in place and actually doing something with it.

“It’s hard for accountants, because they’re not salespeople -they always come back to the numbers,” she says.

Accountants often fall into the habit of coming up with a service idea and asking, “How do we sell it, price it and market it?” That’s going about providing advisory services in the wrong way, according to Reyburn. Instead, they need to look at who they are providing the service to, and what problems those clients are struggling with.

If a client asks their adviser what they get for their extra fees and the answer is a bunch of reports, they’re unlikely to be convinced, she explains. Accountants who want to do advisory work need to be clearer about what they can offer, and explain it in a way that clients understand, such as: “Every month we will chase debts and have a meeting with you to the review results.”

What’s your niche?

One of Reyburn’s key themes for accountants is the power of visible expertise:  “You can’t just be an expert – you’ve got to be visible as an expert.” 

This differentiation starts with working on a specific niche, industry or issue. “I don’t care if it’s property, R&D tax credits or anything else, so long as you focus on something specific,” she says.

“Business advisory is going to be a very broad topic until you explain to your clients exactly what it is you can provide them.”

In the digital economy, she continues, clients will increasingly turn to the internet to look for solutions to their problems or topic of interest. So accountants' marketing should speak directly to the niche markets they serve. “Successful advisory firms don’t say they offer ‘business advice’, they offer to give owners more control over their businesses, save them time and help them manage cashflow,” Reyburn says.

“Once you go down that road, it becomes easy because you know what you’re offering, who you’re offering it to, how much it costs you and therefore how you will price it.”

Karen Reyburn will be presenting her thoughts on what business advice really means as part of the “Going beyond compliance” stream at the Practice Excellence Conference in London on 24 September. Other advisory sessions will cover the needs of entrepreneurial clients, pricing and how to future proof your practice. Tickets for the day-long event cost £99. Book your place now and start growing. Visit the Practice Excellence Conference website for more details.

Replies (34)

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By justsotax
19th Aug 2015 11:56

is it just me or

 are all marketing accountancy experts sounding the same these days.  I feel like I should act as their consultant advising on how to differentiate themselves from the masses, take up a niche sector, value price (perhaps on a 'success' basis if they have any balls etc)...

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By andrew55
19th Aug 2015 13:21

Ohh dear

Another practice advisor who doesn't seem to understand what the average small client actually wants.

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By ireallyshouldknowthisbut
19th Aug 2015 13:46

.

Form filled, tax sorted without too much pain and some advice on how to pay less next time. 

It ain't rocket science, but it is quite hard to do well. 

 

 

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By justsotax
19th Aug 2015 13:52

isn't the truth that

these kind of advisers (not suggesting they are not good) are looking for practices with client's who already require significant support/services and are willing to pay substantial fees (£5-10k plus) per year.  They are not interested in those with small clients (average fees £500 per year) because they simply will not be able to justify their own charges for 'developing the practice'.

 

 

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By David Beaumont
20th Aug 2015 10:17

This is the point

... most small practices will have sole traders, partnerships and small limited companies most of which the owners are involved in their business on a day to day basis. They are willing to pay for compliance because they need it and contrary to to current thoughts, will continue to do so in my opinion. If I was to approach most of my clients with almost anything that involved an increase in fees, being mainly good old Yorkshire folk they'd more than likely exclaim 'ar much ? and graciously decline.

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Red Leader
By Red Leader
19th Aug 2015 14:09

guess what?

ex-RAN ONE.

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By justsotax
19th Aug 2015 14:14

and how does

'chasing debts and reviewing the results' equate to advisory work...? (isn't that just a glorified credit controller...I must have missed the point)

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By redboam
19th Aug 2015 14:23

The "Cloud"

Once again "cloud-computing" gets a mention. Would that be the same cloud computing that recently enabled hackers to take charge of Chevrolet vehicles and among many other things, disable their brakes?

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Adrian Pearson
By Adrian Pearson
19th Aug 2015 14:39

If you don't have the clients ...

Accountants struggle to generate significant income from "advisory work" not because they are not good at advising, or marketing that expertise. Though that may be a factor in some cases, the simple reason is that they do not have enough very profitable clients who have the money to pay for such services.

Selling a package of "added-value" services at, say, £500 per month is handing the small business owner client with an extra £6,000 of overhead (or "investment"). The typical accountancy firm does not have many (if any) clients who would see that as an attractive proposition.

It's time for some transparency: those advocating should provide clear, specific and provable examples of real firms, generating significant advisory profits from real (small business) clients.

I agree that the world is changing and that accountants need to change with it, but if you don't have the clients ...

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ghm
By TaxTeddy
19th Aug 2015 15:01

How do they do it?

In a way I have to admire people like Karen.

They pop up frequently on AW - spouting the same old same old - and we shoot them down rather harshly, telling them it's all b****cks (which it is).

Now, if I were the OP / consultant I would be crushed - but apparently not. These people must have INCREDIBLE self confidence. Or are very thick skinned.

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By justsotax
19th Aug 2015 15:11

isn't their strategy based upon

the laws of probability - the more [***] they throw the more likely some of it will stick, and having seen some of the 'fees' they charge, they really don't need many suckers...(oops I mean takers) to make a good living.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
19th Aug 2015 15:19

Moderated comments

Some of the comments on this thread have been removed for violating our community rules.

You can disagree with someone's ideas - as several people have done subsequently - but can everyone remember remember the need to play the ball, not the person. We will not allow personally demeaning or insulting comments and jibes to remain visible on the site.

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By ireallyshouldknowthisbut
19th Aug 2015 16:43

.

IN terms of the size of clients, this stuff only works for a "proper business', so ones of the size something like 10-50 heads.   Below this point there really wont be that much you can do for most clients, above this point they are likely to have their own in-house accountants so the role for an external one will be limited to filling the gaps in the in-house knowledge. 

Fact of the matter is this represents (by volume) only a small % of the total market place. So suggesting we all work for this segmant is a bit of a nonsense. Larger business will just want compliance work doing with the odd suggestion.  Smaller businesses will want....compliance work doing and the odd adhoc project or set up.  Of course there are exceptions, but this is the broad position. 

However firms who do mainly work in this area which will tend to be multi-partner highstreet style firms, already do all of this stuff.  Its just called "part time FD" or something similar.  Ie same stuff, less buzz word bingo . 

Trying to apply the same stuff to small enterprises however seems to be doomed to failure, much like when your client gets a "business coach" and blows £1000 a month on what amounts to a 2 hour phone call checking what of their targets they have done and being asked "what is your next challenge?" "how do YOU think you are doing?" 

 

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Man of Kent
By Kent accountant
19th Aug 2015 17:36

@John

You must have known that this article would get shot down in flames? I expect you batten down the hatches and get ready for the barrage?

Perhaps the article should have been more explicit about the size of the clients that accountants should be looking to 'sell' additional services to?

I tried the 'consultant FD' route and its very tough - as no doubt the Business Growth Consulting Network LLP - the vehicle that Karen trades through is finding out (judging by the accounts filed at Companies House).

This type of article would be far better if it highlighted real case studies - accountants and clients who followed a certain approach and the results they achieved.

 

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By Moonbeam
19th Aug 2015 18:26

For a certain category of client the advice is spot on

I have for years occupied the niche of offsite financial controller for several companies whose net profits are anything from £50k to £3m. And it is true that they do want all manner of extra services from me because they don't have enough work in that area to justify an in house person. These companies have a firm of accountants already ensconced, but that firm is not geared up to do what I do. It is very different work from what they are set up to do and have experience in.

At the other end of the scale my average startup client just wants at the very most training on bookkeeping, supervision of VAT returns and statutory accounts and tax. Some of them may grow quickly, but most won't.

It's like comparing gynaecology and cardiology. Both sets of medical personnel have similar basic training. After that they build up different skill sets.

To offer extra services, as has already been said, you have to have a certain sort of client before you even start.

Even with the right client I think many in the practice world would find the commercial atmosphere very challenging and that is why they don't look for extra services to offer.

 

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By abaco
19th Aug 2015 19:06

Reports of demise are premature.

So accountants as "business advisors" or always coming "back to the numbers” are worthy of being brushed aside. Ridiculous - Advice is what clients consistently seek from accountants and that advice ultimately depends on "numbers."

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Teignmouth
By Paul Scholes
19th Aug 2015 20:46

For once I found myself nodding

Over the years I have fired my fair share of barrages at pontifications from "gurus" but some of the above rang true for how my practice has gone over the past 4-5 years.

The bit getting the biggest nod was:

"Accountants often fall into the habit of coming up with a service idea and asking, “How do we sell it, price it and market it?” That’s going about providing advisory services in the wrong way"

All too often, because it's directed at accountants, the people pushing this stuff think they need to do it as a systemised, tick box exercise based upon "the typical client", who doesn't actually exist.

Yes, there will be firms who can recognise a niche and go for it, eg AE, capital allowances on property or R&D claims, (yummy eh?) but for me the tingle factor is in spending the time getting to know clients and other people in a wide variety of businesses and situations, knowing that by doing so, opportunities will arise in a small % of them every year where I can get involved in extra work that they need, that I enjoy and for which I can charge premium rates.

Whilst 90% of my time was involved in compliance work this quality time was a dream so, by cutting the number of clients and sharing the compliance stuff with them (by using the cloud), this is what I now do every week, with perhaps 15% of clients making up for most of the routine fees I lost.

Not good for everyone but doesn't make it invalid or not worth a few minutes thought.

 

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By justsotax
20th Aug 2015 11:35

I have to disagree Paul...

my suspicion (and experience) suggests that it is the marketing consultant, not the accountant who comes up with the service idea and asking, “How do we sell it, price it and market it?”. 

 

The process of packaging services (such as incorporation), valuing pricing the service and then marketing it, with the process fully systemised (with appropriate tickbox) come from (may I suggest) marketing consultants who want to trot out their own formalised services so that they don't have to think up 'new' or 'bespoke' ideas to suit the practice, its owner and the clients. 

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Teignmouth
By Paul Scholes
20th Aug 2015 11:47

@David

Over the past 5 years all of my clients are the ones you describe (except most are good old sarflondon folk)..

You're right, as I say (or tried to say) above, approaching the client with your idea of what they need, ie as a selling exercise, is a complete non-starter with business like this, so all you do is chat, find an excuse to make contact every so often and see how they are,get to know them and their business better and let them into what you have been getting up to.  

In the majority of cases it will generate no new business, maybe for months but, from time to time, when one of them thinks about doing something differently there is more of a chance they will contact you for your view.  I've also had several instances of people calling me out the blue saying "Fred (name changed!) tells me you have a client that's been involved in X, we are thinking of doing that and want to know what's involved".

If that doesn't make sense, turn it on its head, stay in a bubble, only do compliance work, have as little direct client contact as possible, sending them their accounts & tax return on email, so you can avoid talking to them at all. How likely is that to generate new business?

Via my work with Clear Books I've spoken to groups of users and accountants and it never ceases to amaze me that in 2015, there are still a significant number of business owners who won't consider talking to their accountants about anything other than their year end stuff, to the point where they will actually go out and find their own accounting package without asking their accountant first.

Similarly, there are many accountants who have clients using Cloud accounting, who only login to it after the year end to get the TB and discover the dozens of mistakes, I've even come across cases of accountants asking the client to print off a TB and other reports and post to them.  Collaboration via cloud accounting has been the biggest change in how I relate to my clients and has generated all those chats.

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Teignmouth
By Paul Scholes
20th Aug 2015 11:58

@justsotax

Yes, as I say above "people pushing this stuff" will con accountants into thinking that there's all this new stuff they can package up, as well as a huge number of clients just sitting there waiting to buy it, but it's crap.

But it's a mix, there are also accountants who hear about this stuff and go off on one designing all the new stuff for their typical (non existent) client, without asking any of their living clients whether they think it's a good idea.  This was me and my firm in the 80s & early 90s when we learned of the almost certain demise of or auditing income and so went off on one to become management consultants or the lower "business advisers", a complete waste of time.

Ironically, despite the pull away from compliance, or rather getting the client to do more of it, I've rediscovered the wonders of bookkeeping via using & testing all the cloud packages, so yes, I'm getting my hands dirty with some book work but, as an example, it has lead to extra fees in advising and training non-client businesses and other firms of accountants.

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By justsotax
20th Aug 2015 12:25

i am sure you

are correct regarding agents coming up with their own service package, but it will be off the back of marketing seminars (in the vast majority of cases) with the suggested route,  and not as implied in this article off their own back.

I especially get aggravated by the implication that all accountants are numpty's who are oblivious to any changes in the world.  Especially with patronising statements such as, “It’s hard for accountants, because they’re not salespeople -they always come back to the numbers,” she says.

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Glenn Martin
By Glenn Martin
20th Aug 2015 14:21

I dont struggle with it.

I actually prefer advisory roll to standard compliance work, which I find boring and difficult to engage with. i have different background to most in that I have solit my time 50/50 between practice and business roles so do feel more comfortable in the advisor roll. Even when i was employed in practice 15 years ago I still built my client portfolio up on a advisory basis and not just huge numbers signed up for basic compliance services. This was way back when the cloud was something that rain come from and Sage was your sole option from software. For me the comments above are about right. If you have a practice now built up on a complaince basis you cannot all of sudden sell them all loads more services and double their fees as most simply will not have any needs other than the compliance services they signed up for. So if you are wanting to do more of the added value work, it maybe appropriate for 10% of your current clients  and the rest will have to be sort from outside. 

The firms that have done this well have set up to only do the value added work and have targeted the clients that its fits better with. Someone like FD works have set out to only do virtual FD rolls and dont look or advertise for compliance based work. trying to convert an existing practice built solely on compliance will not work. You almost need to split your practice in 2 and have 2 identities. If you were a new start up and you had the backing to do it that would be the way to go. Compliance work is cheaper and easier to break into.

For me I think the reality will be that the introduction of things like receipt bank to automate the labour intensive part of our work will see that part of accounts prep done well freeing up time to have discussions around other items that will make a difference. But rather than it being a big fee earner it will simply allow us to do a better more informed job for the same price as when we had to do lot of work sorting bookkeeping out to do a meaningful set of accounts.

Well thats how I am pitching it anyway.

I have just taking over a client who was paying for a virtual FD service tagged onto a cloud accounting package but I couldnt see where any FD input virtual or otherwise was apperent  and it was just an expensive bookkeeping service to be honest, and a few of the cleints activities were actually loss making but that hadnt been picked up as it was just lost in the overall picture. I would also question how many people offering these services actually are qualified to do so, i dont mean ACA, CIMA or ACCA but have they actually been involved in a succesful business at grass roots level.

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Teignmouth
By Paul Scholes
21st Aug 2015 10:45

Yes Glennzy

As if to back that up, I was the traditional 90% compliance based firm and, despite boredom and frustration, it took me the best part of 10 years (pre Cloud) to streamline those services to the point where there was sufficient spare time to start exploring the other side.

The advent of both the Cloud and the Government's online stuff has accelerated this many times over, so whilst it can not happen overnight, if a firm sees this as the way they want to develop, it might only take 2 years to start making a significant shift in emphasis.

Facilities like Receipt bank not only change the way things work overnight but they make you question what you regard as normal and I have no doubt that in the near future, the bookkeeping of customers & suppliers will be linking directly, as they will to the Government's systems, cutting all human intervention to a mere supervisory role.

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Teignmouth
By Paul Scholes
21st Aug 2015 11:04

@justsotax

My only problem with:  “It’s hard for accountants, because they’re not salespeople -they always come back to the numbers,” is the use of "always", I'd have put "tend to".

I'm an accountant and I don't take it personally, as I tend to agree with the statement.  

It was only when I started on an MBA type course in the 90s that I realised how little I knew about marketing (in its pure sense) and it significantly changed the way I looked at the clients and how the firm functioned.

With regard to the C word "change" (which Karen didn't use), whilst I can't speak for formal accountancy training these days, I do speak to lots of accountants and there still is significant inertia to change within practices, or rather an inability to lift heads up from the keyboard and look forward, out of the box, to where others (including clients) are heading.

Glennzy's two identities comment is apt, there's nothing wrong with liking or thriving on compliance work but the fact is that it is diminishing and so firms put themselves at risk by not having, or even thinking about, getting a better mix.

 

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By justsotax
21st Aug 2015 13:17

you are probably correct regarding the

'tend to', however isn't that your job?  Whilst I appreciate a mechanic can offer advice on how to make my car more fuel efficient, type of enhancements I may feel appropriate, a better tyre for the car, a better exhaust etc etc I want my car to go...so am I bothered if he just fixes it rather than making suggestion that will cost me a small fortune...

 

Consultants need to buck their ideas up - its about time they stop droning on about the same old things and offer bespoke solutions for their clients - when they start working on 'performance related' fee/pay structure I will listen...but that's never gonna happen...because they now one thing above all....accountants aren't salesman...so whatever they suggest from the usual tool box of 'marketing' strategies it is not likely to result in a great result because the person selling it isn't a salesperson.

 

 

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By Bob Harper
22nd Aug 2015 11:38

Late to the party

I appreciate I'm late to the party and it's been interesting watching.

@JustSoTax – accountants can be REALLY good sales people because they are good at asking questions and number crunching. Both are required to build a strong sales pitch.

And, for the record for the record, I and happy to work/charge on a results basis if the client is prepared to guarantee their performance.

It's a shame more accountants didn't work like with with their clients!

@Paul – the truth is that this is not about technology but a radical change of business model.

The technology is VERY easy to adopt - the new business model is not. And, change rarely comes from the existing players - as can be seen (again) here.

@David – you’re right, clients will continue to pay for help with compliance but in the future that help will be less and at a lower price.

Have you considered approaching your clients for free to start with?

Yorkshire folk are no different – apart from a funny accent, they are driven by the classic human drivers. We all want to feel safe and secure. We want control over our life, We want to be liked, loved and respected and the freedom to express ourselves.

Start focussing on the emotions of your clients and educate them how their business can give them what they crave and you may be surprised how many come forward.

See below - you do not need to charge a lot to help a lot.

@Adrian – you do need the right type of clients but they don’t need to be able to afford £500 a month.

Accountants can offer very low cost and free advice with.

Reports, guides and checklistsCase study examplesSeminars/WebinarsPodcastsVideosSoftware1-2-1 Skype calls

It’s not easy. It takes time and money to develop these things but it can be done – watch Crunchers release all the above over the coming 3-6 months.

Bob Harper

Crunchers and the MORE network

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Teignmouth
By Paul Scholes
22nd Aug 2015 18:02

Too late to the party

I'm already in the taxi home.

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By ireallyshouldknowthisbut
24th Aug 2015 09:04

.

Ah Bob served his latest ban and back to play? 

What fun. 

So did you deliver on promises last time around, or is your franchise still dying on its [***] with its single tiny office making less money that most part time accounting practices do?

 

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By Bob Harper
24th Aug 2015 09:44

Wrong

@YouReallyShouldn't - never gone away:

Wrong - there was no ban

Wrong - adding value works for all businesses

Wrong - there's lots accountants can do for businesses with less than 10 heads

Wrong - coaching is NOT how you described it

Correct - we have one office doing Crunchers and we may only ever have one office.

Bob Harper

Crunchers and MORE network

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Replying to Red Leader:
By ireallyshouldknowthisbut
24th Aug 2015 11:59

heh

Bob Harper wrote:

we may only ever have one office.

I would imagine so.  

Last time you came on here you were trying to get someone to pay you several thousand pounds to start up a second franchise.

So that failed then did it?

 

Bit confused about the rest of your post, but no change there then. 

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By justsotax
24th Aug 2015 11:00

I was questioning

what marketing 'consultants' bring to the game, other than rolling out the same old same old.  I am sure you are correct in your assertion that accountants should make good salesman, but the fact is that if they were truly aligned with that profession they would be...erm...salemen not accountants.

 

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By Bob Harper
24th Aug 2015 11:28

Consultants

@JustSoTax - in truth there hasn't been the need for accountants to "sell" too much (or even market) because they have focussed on accounts/tax which are compulsory.

But, if accountants are going to create revenue from discretionary services they will need to both market and sell. 

As regards consultants, they bring what accountants should to their clients:

PerspectiveInsights, research and knowledgeMotivation, encouragement and accountabilityFeedback and ideasSoftware

All things designed to improve the numbers!

Bob Harper

Crunchers and MORE network.

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By Bob Harper
24th Aug 2015 12:39

No change

@YouReallyShouldn't - the last few words of your post are so true.

Bob Harper

Crunchers and the MORE network.

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By karenreyburn
24th Sep 2015 20:46

a reply from Karen Reyburn

Hello everyone, 

I can see that this is an area that many of you feel very strongly about. 

My opinions on this were based on the experiences of accountancy firms I am working with, particularly those who have embraced cloud accounting in a big way, and are finding that it has begun to change the way they approach the provision of accountancy services, and often there is a dividing line between 'just compliance' and 'everything else'. For many of them it has enabled them to be much more profitable.

It was not my intention to tell everyone to be what is known as a 'business advisor'. If you can make a profitable, successful business and living by doing compliance work, by all means please do that, and I wish you very well. 

I enjoyed and appreciated the opportunity to share on this topic at the AccountingWeb conference today in London. Thank you John for the opportunity to be there, and for moderating this column. 

For any who are weary of marketing consultants, and marketing advisors, and those who go round telling accountants what to do, I understand. I have long fought that perception. I love the work I have the opportunity to do, and the accountants who trust us with their firm's marketing.

I wish you all the very best, and trust that your work is enjoyable and fulfilling.

Kind regards

Karen

 

EDITED: I've just noticed the first line of the article which is "Reyburn regularly works with practices where clients no longer pay for compliance, but sign up for monthly fees that bring them a service based around management accounts, dashboards and integrated cloud systems." 

In actual fact, I do not work with any accountancy firms who do this. Some of the firms I work with are considering it, and it may very well happen in years to come, but it did come up in conversation with John, and I may not have communicated it very well. If this led to much of the frustration here, that was not my intention. I fully support firms delivering compliance work - it's just that many of them are finding that compliance alone is not enough. They do, however, charge for both compliance and advisory work.

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