Compliance vs Advisory Practice is the question. Everyone’s talking about accountants moving away from compliance. They say the sweet spot is in business advice. However, how many are actually doing that? And moreover, how easy is it to become an Advisory Practice?
Calxa CEO, Mick Devine, remembers similar discussions at his first meeting as a newly qualified CPA 30 years ago. He says:
“Back then it was mostly just talk. The technology wasn’t easily available to give clients up to date, relevant advice on their finances. But that has changed now”.
How GST Changed The Landscape
One of the positive side-effects of the introduction of GST in Australia and similar moves like Making Tax Digital in the UK has been the requirement for your business clients to maintain updated accounting records. Reconciled books that are checked on a regular basis are now a reality. While, initially, this often just once a quarter or maybe once a month, the introduction of cloud-based accounting software has meant that your clients’ accounts are now commonly updated daily. As an accountant and bookkeeper, having that data online also makes access easier for you. After all, it opens the door for you to provide useful management reports in a timely manner. The start of becoming an advisory practice.
Advisory Practice: What Does It Mean?
This article from Intuit What are advisory services and what do they mean for your practice has an great way of looking at advisory services.
“Taking client challenges and applying strategies to create opportunities in service to their growth.”
This matrix gives you an overview how you can define advisory services and ultimately start your journey to an advisory practice.
| Dimension | Compliance | Advisory |
| Definition | Reports and filings required by external stakeholders to comply with regulations and standards. | Taking client challenges and applying strategies to create opportunities in service to their growth. |
| Service Examples | Tax preparation, estimated tax payment adjustments, payroll processing and filing, bookkeeping, controllership, monthly close, financial statement preparation, sales tax compliance, tax agency correspondence; taxpayer representation. |
Tax planning and strategy, onboarding and training, technology stack implementation and maintenance, management reporting, cash flow forecasting, key performance indicator dashboards, industry benchmarking, business performance reviews, process automation, budgeting and goal tracking, strategic planning, product price testing, profitability consulting, wealth management. |
| Deliverables | Compliance reports are the primary value communicated, delivered and invoiced to the client. | Actionable insights and strategies are the primary value communicated, delivered and invoiced to the client. Compliance reporting is a by product of well- defined advisory services. |
| Workflow Attributes |
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Starting The Conversation
Delivering relevant information to your clients is the first step in providing any sort of advisory service. Therefore, the conversation about what is happening in your client’s business needs to begin with good information. Above all, data on what has happened and what the business plans to make happen is paramount.
Most accountants are already having advisory conversations with clients when it comes to tax and business structure. It’s a small step from there to talking about the performance of the business and asking probing questions that lead to positive change.
Advisory Practice Tools
Reporting tools like Calxa make it easy to produce the information to measure and monitor what is happening in a business. Similarly, it helps automate your advisory practice to produce and deliver these regularly and simply.
But reports alone do not make you an advisory practice. They are just the catalyst for a conversation with your client. But, it’s that conversation that will provide the real value.
Getting Started with Advisory Services
For tips on how to Start a Conversation with your Client, check out our three part blog and video series.
Taking Effort out of Production
Automating the delivery takes your effort out of the production. Foremost, it gives you more time for analysis and discussion with your clients. With Calxa, you can schedule delivery of monthly reports. Furthermore, you know that they will happen reliably month after month. As a tip, deliver a copy to your own inbox and to the client’s so that you can have a conversation based on the same up to date information.
The simple steps to produce a set of reports are:
- Connect to the client’s accounting system
- Import budgets or use the Budget Factory to build them from last year
- Use the pre-built Small Business Management report bundle
- Discuss with your client
- Review and revise the budget and report content.
Pricing For The Advisory Practice
Calxa’s pricing for accountants has been structured to facilitate the automation of your advisory practice services. Starting at $220 (AUD/NZD) per month for the first organisation, the price drops to $22 for each extra organisation. As your practice grows and you use Calxa for more of your clients, you can move up to the Premier 5, 50, 100 or Premier 200 plans. Add as many of your colleagues to the subscription as it includes unlimited users. There is no minimum term, and you can move up and down at any time. This table will show you the economy point per client.
|
Organisation |
Monthly Price | Extra Organisation |
Average Cost per Client |
| 5 | $286 | $22 | $57.20 |
| 50 | $770 | $22 | $15.40 |
| 100 | $1,320 | $22 | $13.20 |
| 200 | $2,420 | $22 | $12.10 |
When you consider the time you will save and the value you provide to your clients with regular, reliable reporting, you’ll quickly see a return on your investment.
See our pricing page for pricing in other currencies.
Choosing the right clients for your Advisory Services
Not every client of an accounting practice needs or wants management reports and advice. The very small ones are close enough to daily activity of the business to have a good understanding of what’s happening. Some of them may be too close but that’s another problem!
Management advice becomes more important as a business grows or when it’s undergoing any major change. As the owners become more distant from day to day operations, they need better ways to understand what’s working and how to plan for the future. Businesses with multiple entities or departments within one company are often the most enthusiastic audience for external advice. They are at that sweet spot where they need the advice but aren’t big enough to justify an internal accountant to provide it. That’s when they need you!
Getting Started As An Advisory Practice
If you are hesitant at making the move to the ‘advisory practice’ model, start with a 30-day free trial or book a demo to chat with one of our team about your needs. This article Calxa Adding Value to Your Practice has some suggestions on how to get started.