Let’s face it: for Certified Public Accountant (CPAs) and accountants, the seasonal influx of business during tax season or busy season, as it’s commonly called, is a huge benefit that can actually keep lights on year-round.
That being said, while some of your clients may only surface annually to get their taxes done, there is a major opportunity for CPA firms to garner more consistent business by offering advisory services in addition to doing taxes and compliance work.
Providing advisory services to your clients positions your firm as a trusted partner and resource – while also ensuring a consistent stream of business.
What are Accounting Advisory Services?
Being a CPA involves more than just doing taxes and bookkeeping. Accounting advisory services include providing guidance on investing, wealth management, cash flow planning, and forecasting. Additionally, offering tax planning, strategy advice, and keeping clients updated on tax legislation are valuable services that help clients grow and adapt to changing laws.
By offering advisory services, your firm can help clients achieve their growth goals and improve profitability, positioning your firm as a reliable business partner.
The Financial Benefits of Offering Advisory Services
CPA firms that offer advisory services can experience significant growth. An announcement from the American Institute of CPAs (AICPA) and CPA.com highlighted that firms providing client advisory services (CAS) see a 16% growth. Advisory services are the fastest-growing service area in public accounting and are expected to continue this trend.
Offering advisory services not only helps your clients become more profitable but also brings in year-round revenue for your firm. According to the Hinge Research Institute, clients who do not currently purchase advisory services would be willing to pay 50% more for an accounting package that includes strategic advisory and consulting services.
Key Advisory Services Clients Seek
Understanding what services your clients need is crucial for prioritizing your offerings. According to a CPA.com report, the most desirable advisory services are:
- Revenue growth and business modeling (65%)
- Budgeting (46%)
- Tax planning (38%)
- Risk management (38%)
- Key performance indicator (KPI) reporting (35%)
By identifying these needs, you can focus on providing the services that will most benefit your clients and promote these offerings accordingly.
Types of Advisory Services
Advisory services can be divided into two main categories: financial accounting advisory services and client advisory services.
Financial Accounting Advisory Services
These services involve guiding clients on investing and wealth management, cash flow planning, forecasting, budgeting, profitability analysis, business entity structure, rental property operations, purchasing or selling businesses, income shifts, and estate planning.
Client Advisory Services
Client advisory services include offering tax strategy and planning advice, keeping clients updated on relevant tax laws, benchmarking against peers, providing strategic business planning, and setting and analyzing KPI performance.
Advisory vs. Consulting Services
Both advisory and consulting services help clients address their challenges, but the difference lies in the term of engagement. Advisory services involve a long-term relationship, offering ongoing counseling and advice on various business needs. In contrast, consulting services are short-term, project-based engagements focusing on specific challenges.
Advisory Services:
- Term of engagement: Long-term
- Objective: Provide ongoing advice and support on various challenges
- Relationship with client: Foster long-term partnerships
- Suitability: Ideal for CPAs aiming to build deep, lasting relationships with clients
Consulting Services:
- Term of engagement: Short-term, project-specific
- Objective: Address targeted challenges
- Relationship with client: One-time or short-term contracts
- Suitability: Suitable for firms with expertise in specific client projects
Offering both advisory and consulting services can be beneficial. However, advisory services are particularly well-suited for CPAs who want to build lasting relationships and provide ongoing support to their clients.
Hiring for Accounting Advisory Jobs
Clients seeking advisory services want a partner who understands their business and can offer tailored guidance. When hiring for accounting advisory roles, look for individuals with:
- Qualifications and certifications: Ensure they have the necessary credentials, such as being an Enrolled Agent for tax planning.
- Technical expertise and strategic thinking: They should be able to address clients’ challenges and goals effectively.
- Interpersonal skills: Building strong client relationships is key.
- Business acumen: They should have a deep understanding of business operations.
- Adaptability: Lifelong learners who can keep up with evolving business environments are valuable.
Should Your CPA Firm Offer Advisory Services?
If you see the benefits of offering advisory services, it’s worth considering. Most tax professionals believe their clients want these services, indicating a strong demand.
Ignition can help you launch advisory services with ease. Ignition’s features automate and digitize proposals, allowing you to quickly price and package advisory and compliance services. Clients can select the right options for them, and the process is streamlined with online engagement letters and automated billing.
By watching a demo of Ignition, you can see how it can help you uplevel your practice and provide valuable advisory services to your clients.
