I recently had the opportunity to be interviewed on the topic “why accounting firms should consider implementing a business advisory service offering”. Some of the questions were very interesting and made me think that developing a strategy is even more important to future success. This month I thought I would share with you some of the responses and outcomes from this interview.

One key question I seem to get asked regularly is; what’s wrong with being a compliance practice and why should I add new services when we are already flat out? Both good questions with limited growth potential. Let’s consider a few key points.

While compliance has been the main practice income since…well…forever, software improvements meant that the number of errors in compliance data is diminishing.

Features such as automatic coding rules and bank/ credit card feeds mean human errors are slowing being eroded – which is a good thing. Accountants can also access their clients’ data directly at any time using cloud accounting.

However there’s a flow-on effect in the practice. Accountants are now able to make adjustments to company files during the year – not just when they see their clients – and there are potentially fewer billable hours throughout the year.

Add to this the pressure of competition, and the idea of offering business advice as well as compliance is a more attractive proposition than a compliance-only. It’s clear why practices are under increasing pressure to expand their service offerings. This has been happening overseas for a while now.

There’s certainly pressure mounting overseas from compliance leading to the need to offer extra financial services, especially in places like Canada and the United Kingdom, where practices have grown on the back of their successful advisory services.

Practices need to implement a “whole of practice” business advisory strategy. It’s no good just dipping your toes in the water. Becoming a business advisory practice requires a major commitment, but the payoff can be immense.

Three key considerations to success are;

1. Identifying and solving capacity and workflow issues, to ensure service delivery is smooth and on-time
2. Appointing a business advisory practice champion and ensuring their KPIs are appropriate to the role
3. Committing to an implementation plan (and sticking to it) to make it all happen.

So what happens to practices that refuse to entertain a change to their business model? The answer is a “failure to implement”. Time, effort and cost is absorbed and there is little return of investment to show for it.

One of the biggest problems in accounting practices today is apathy. Practices need to get out there and prepare for the future – prepare for the greater advisory opportunities that technology is providing now and into the future.

So if you’re thinking about introducing new service opportunities into your practice don’t wait, get moving now. At Smithink we can assist you to develop a business advisory implementation plan and then support your firm in the delivery of business advisory services to your clients.

We start this with a complimentary virtual Business Advisory Readiness Review to determine if your firm is ready to move down this pathway. To undertake this process with me just send an expression of interest to: [email protected] and I will contact you to organise a date and time.