Accountancy firms often assume the role of trusted advisors to clients, many of whom expect accountancy firms to package advisory services with accounting, tax, and auditing services. It is not uncommon for new clients to approach accountancy firms with an issue their previous account couldn’t handle, only to ask for advisory services in the same breath.
Therefore, it now is a common trend for accountancy firms to offer advisory services to their clients to demonstrate added value. The ability of accountancy firms to key in on a client’s financial and business issues while providing professional advice can set them apart from their competition.
It is no wonder, then, that many accountants may describe themselves as both advisors and accountants. But how do these roles differ, and in what ways are they similar?
How accountants and business advisors differ and overlap
Accountants have traditionally performed audits and addressed tax liabilities for clients to focus on compliance (these days, though, many accountants are moving from compliance to business advisory).
Meanwhile, business advisors have traditionally focused on their clients’ future business goals. Business advisors understand the nature of their client’s businesses and either connect them with professionals who can help them achieve their goals or directly help them meet those goals.
Simply put, business advisors usually handle current and future figures, while accountants typically focus on a client’s historic figures. It stands to reason, then, that firms can benefit from offering both accountancy and business advisory services.
Why accounting firms should merge business advisory and accountancy services
Accountancy firms can retain a larger piece of their client base if they decide to merge accounting and business advisory services. Merging these roles makes it easier to establish longer-lasting client relationships while demonstrating an ability to support business strategies: a client may, for example, ask what the best business bank account for their LLC is in addition to asking about historic business growth.
An accountancy firm that also acts as a business advisor can readily address both of these questions.
Plus, accountancy businesses that offer advisory services can enjoy a greater return on advisory fees than compliance feeds, since advisory services aren’t considered a commodity service.
Accounting firms that offer advisory services can also stand to retain a greater number of existing staff members while attracting new employees, too. An accountancy firm that merges accounting and business advisory services can tout the work it performs as much more modern and interesting than traditional compliance-focused work.
New and existing employees can assume a more diverse range of responsibilities and feel as though they can act as both advisors as well as accountants.
The ability of accountancy firms to key in on a client’s financial and business issues while providing professional advice can set them apart from their competition.
Although the positives of merging accounting and business advisory services far outweigh the negatives, there are still a few potential issues worth considering. For one, accountancy firms that begin to offer business advisory services may unwittingly devalue the compliance role they fill.
These firms must strike a fine balance between their business advisory and accounting capacities, lest their clients and staff members feel that too much focus is being placed on business advisory.
A client may, for instance, be interested in selling their business and need help along the way. They may require that a firm analyze cash flow and three years’ worth of accounts before they can begin the selling process. In this case, an accountancy firm must demonstrate expertise in providing compliance services that a skilled team of accountants can perform.
As with any ambitious endeavor, there are always several drawbacks that need to be considered. With that said, the positives that accountancy firms can enjoy by offering business advisory services, as well as accounting services, are far greater than the negatives.
Business and tax advisory services have never been in higher demand from accountancy firms, especially considering that so many of today’s business owners need an expert to help them better understand how to manage their business in a way that’s tax-efficient.
Accountancy firms that are interested in merging business advisory and accounting roles should focus on establishing trusted relationships with clients who have specific business goals. The ability to offer business advisory and accounting services without devaluing either other is a sure-fire way to stand head and shoulders above your competition.
Fabian Sandoval is an HR analyst for small- and medium-sized businesses with considerable experience. He recently launched his copywriting career sharing his insights on employee productivity and streamlining company-wide projects. He specializes in simplifying mundane HR tasks and providing solutions to problems that often pop up in a remote work environment.
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