In November 2014, we asked Australian and New Zealand Accounting Firms for some basic feedback on their current and future approach to business advisory services.
Overall, the survey confirmed that most firms understand that there is an imperative to focus on advisory services in addition to accounting compliance in coming years, but they are still trying to develop a consistent and formal approach to business advisory services.
In most cases, business advisory is provided on an ad hoc basis as a result of specific needs, rather than being provided in response to ongoing discussions with business clients about their personal and business financial objectives. The challenge is moving from a reactive to proactive approach where business advisory is a distinctive service with its own clear value proposition.
Whilst firms are clear that they currently provide a range of business advisory services, in many cases these are provided on an ad hoc basis and/or to few business clients at the present time. It’s surprising, for example, that 60% of firms say they provide management reports, but only 40% actually have management meetings with business clients.
In reviewing the challenges firms face in implementing business advisory services, time management, fee sensitivity and lead generation are seen as the top roadblocks to success.
Time management is an ongoing challenge in the compliance world; ways to create more time include an ongoing focus on efficiencies in compliance workflow and development of leverage in relation to both client relationships and workflow.
The fee sensitivity issue probably reflects the difficulty many client managers have in discussion both fees and value. Feedback from business clients confirms that they will pay significantly more for advisory services than accounting compliance work. Development of engagement skills through tools such as RAIN selling can provide client managers and partners with the edge in getting clients over the line.
The use of tools is very much ad hoc and possibly related more to opportunistic decision making than formal review of clients’ needs and available options. The tools fall into 3 broad categories, (1) engagement tools to develop client discussions about needs and objectives (2) reporting tools to help clients understand their financial situation and opportunities and (3) implementation tools to assist with delivery of specific services e.g. estate planning. A key focus for most firms is how to streamline data collection, processing and analysis and products like Xero and BankLink offer a clear path for firms looking to create internal efficiencies, reduce internal costs and increase revenue from advisory services.
Further evidence that development of a sustainable business advisory service platform is still in its infancy for most accounting firms comes from the data in relation to internal and external lead generation activities. A proactive approach to lead generation demands a formal approach to the identification and development of internal leads. Only 28% of firms have a formal internal lead generation process in place. 35% of firms say that they have a CRM (client relationship management system) in place, but in most cases this is rudimentary
and not sufficient for formal lead development activities.
MAKE IT HAPPEN
For accounting firms interested in developing their business advisory, there should be confidence that they’re on the right path, but still with much work to do to.
The key challenges these firms face are:
- How do I create capacity and leverage to develop my business advisory platform when accounting compliance is still the core service provided to clients?
- How can I really engage business clients in discussions about their financial future and explain to them that I can add real value in an advisory capacity?
- How do I establish an internal platform to ensure that business advisory services are delivered in a systematic manner rather than provided at an ad hoc level?
The MAKE IT HAPPEN business advisory coaching program has been developed specifically to help accounting firms develop and implement a practical business advisory platform. Most firms enrolled in the program will have some business advisory services in place, but will be struggling with one or more of the challenges outlined above.
For more information, visit www.trainingbeyondaccounting.com.au/shop/MakeItHappen or contact Dale Crosby on Ph 1300 883 789 | +612 9904 8400.
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