The Challenge: Commitment and Capacity

As we enter a new financial year, I have been thinking about the ongoing issue in the industry of implementing a systematic and profitable business advisory service within accounting firms.

The two “Cs” arise again and again: a lack of commitment to change and create a new practice model and capacity (time) actually to follow through and get it done. This leads to a failure to implement and, eventually, a reduction and/or cessation of service delivery in this space.

Why Other Divisional Models Succeed

I continually see firms create a successful divisional model with Financial Planning, Human Resources, Information Technology and the like without drawing on professional accounting and other compliance and administrative staff. This is often a well-resourced and profitable model that demonstrates significant growth on budget. Of course, it has separate budgets and key performance indicators for the compliance division, which are managed accordingly by the Partners.

The Square Peg, Round Hole Problem

For no apparent reason, that model changes with business advisory when accounting firms choose to take good compliance accountants and make them business advisors. Sort of a “square peg, round hole” approach. Some can do it; however, for many, it is well outside their comfort zone, and they comfortably fall back into compliance whenever the opportunity arises.

Treat Advisory as a Standalone Division

In my opinion, business advisory is a separate division within an accounting firm with staff who really want to be advisors, sort of a storyteller and provide appropriate support to get the job done. It needs to have the right systems, processes and people resources to achieve and hopefully exceed the budget and be managed to fair yet challenging KPI’s.

Getting Started: Structure and Infrastructure

The first step is to establish the right structure within the firm using a Trusted Advisor Model, with you in the key project manager role. From there, examine the firm’s infrastructure to complete advisory work, including what you intend to offer, how you will package it, what it will cost, who will do it and how you will promote it to existing and potential clients.

Client Engagement Before Delivery

Next, create a client engagement model that effectively communicates the benefits of advisory services. Only then should you develop delivery models to support engaged clients, enhancing and protecting their business and personal wealth and success measures.

A Working Model: Right People, Right Support

I have been working recently with firms who have finally recognised this issue and have decided to create a business advisory division with the right staff that they have or will recruit (internally or externally) and onshore or offshore resources to assist in the back-end processing of data and actions required thereby allowing the onshore team to concentrate on client engagement and delivery.

The model still takes time to set up correctly; however, it works.

Ready to Build Your Advisory Division?

Are you interested in creating a divisional business advisory for your firm? If so, please feel free to contact Mark Holton at Smithink for a complimentary business advisory assessment, where we will discuss, among other items, how to:

• Provide a greater range of value-added services to existing and prospective clients.
• Create a divisional model with the right systems, processes and people resources.
• Assess your firm’s future income sources, goals, issues and objectives.

Mark will be presenting a session on turning insight into action at our 2025 Young Guns Workshop, coming up on 20-21 October on the Gold Coast. Click here to view the full program and register.