6 steps to moving your practice from compliance to advisory

Many practices across Europe have been thinking about how they can protect their existing compliance revenues and grow their other service revenues to secure their future. Advisory services will play a critical part in the evolution of practices as they face the growth and compliance challenges ahead.

If offering an advisory service for clients is a new venture and a new revenue opportunity for your practice, it’s important to develop and refine a clear roadmap and business strategy.

Here are 6 steps to consider.

Step 1: Plan

  • Analyse your net profit margin and your practices’ strengths, weaknesses, threats and opportunities.
  • Analyse how the advisory function can fit into your practice and how it will fit into your overall growth strategy.
  • Consult your senior leadership team on how you can add the advisory function into your practice and what revenue projections you are expecting from it.
  • Appoint a project leader, ideally a partner or a change ambassador who can drive through the new venture.
  • Define and refine a process for the advisory function. How will suitable clients be identified?
  • How will you track the growth of clients and the performance of the advisory function?
  • Address your capacity. Automate what you can and go from there.
  • Evaluate how you’ll charge for the advisory function.
  • Develop a clear marketing plan.

Step 2: Listen

Listening is the most powerful tool in business. You can’t grow your clients’ business if you are unaware of needs and goals for growth. Choose three clients to work with take some time to really understand their priorities, hopes and potential blockages for success. Asking the right questions is critical to unlocking your client’s needs.

Step 3: Differentiate your advisory services

The key question you’ll need to answer for every client is, “Why they should use your business advisory services, what’s in it for them?” One way to show the long-term value of your advisory services is to offer to value their business. With this valuation in hand you can use it as a stepping stone to discuss how to grow that figure.

Often a sale price estimate turns out to be beneath your clients’ expectations, giving you the opportunity to upsell more services. The gap in expectation vs reality will focus your clients’ mind on discussions around growth planning and will create an urgency to act on your recommendations. Alternatively, if your client is looking to raise funds, you could offer them a pre-lending assessment to help them understand their options for finance. Accountants will need to develop a keen eye for upselling opportunities in the first phases of changing to advisory services.

Step 4: Growth planning

The art to developing your advisory service offering is to start with one service offering and don’t take on too much at once. Taking on too many services at once will hamper the customer experience, and first impressions matter. Pick one or two services that are aligned to services you already offer and create the training and mindset change needed for that.

Once you can implement and review your plan, look at new initiatives that could have the biggest impact to your clients’ bottom line. Use software to help you create a model with tools a client can access to improve profitability and cash flow. Work out a plan around their objectives and agree a time frame. Build in regular accountability meetings so growth goals don’t slip from the accountability time frame.

Step 5: Get results

Being able to quickly demonstrate the value and validity of your advisory services to your clients is critical to success. Offering a business advisory service is about developing long term business relationships. For the relationship to flourish your clients will need to see results.

It will be up to you to ensure that your client acts and gets results. You will need to create a certain set of metrics to measure results and stick to them throughout your services. Set up a schedule of regular contact to ensure that your client stays on track. You’ll have to act as a business coach and mentor. Continually bring your clients’ attention back to goals, the gap between where they are now and where they want to be, and their strategy for bridging that gap.

Step 6: Exceed expectations

Advisory services give you the opportunity to build deep strategic relationships with clients, partnering with them to keep them on track with the growth plan. Use your knowledge of your client’s business to help them with succession planning, HR, IT – the opportunities are endless.

As your relationship with your client develops, so will their trust in you, your understanding of their business, and your predictions for their business. Over time, look for opportunities to help clients with more and more of their business needs.

Exceeding expectations is the surest way to grow portfolios with existing clients.

Download our whitepaper, Reinventing the tax and accounting profession, for more information on how your practice can make the transition to advisory services.

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