Accounting Partner Program

What Are Accounting Advisory Services? Here’s What You Need to Know

The term “advisory services” gets thrown around a lot, so it can be hard to know exactly what it means. “Is this something new?” “Is it different from what I’m already doing?” “I feel like I advise my clients all…the…time!”

So what is it really?

I believe advisory services will be the future of accounting and bookkeeping for firms and solo practitioners. Why? One reason is that technology is making compliance work easier. Increasingly, businesses can automate accounts receivable processes, expense management, and more, making outsourcing less appealing.

Another reason is that the post-pandemic economic uncertainty has prompted business owners to keep a close eye on cash flow. More than ever, businesses need the advisory services a professional can offer.

So, let’s break down what accounting advisory services really are, what they mean to your firm, and what they can do for your clients.

But First, Do You Have What It Takes to Be an Advisor?

Want to hear a secret? No degree or credential is required to offer advisory services. What is required is the ability to help your clients solve their problems and improve their business.
Delivering on a value proposition like that requires you to continually grow and develop these skills:

• big-picture thinking to envision solutions for your clients’ problems
• research and evaluation skills so you can poll current clients, evaluate industry and market trends, and follow tech advances
• empathy, curiosity, good communication, and change management to guide clients through these recommendations and develop deeper client relationships

You don’t need to be born with these skills. You can identify your strengths and weaknesses and create your own path through books, training courses, and mentorship to fill out your advisory toolbox.

The key here is to realize your clients don’t need someone with all the answers. What they need is someone willing to ask the right question (sometimes a lot of questions). They need someone who understands how stressful and isolating it can be to run a business and who will come alongside them and help them solve problems. What they need is a human being. What they need is you!

What Advisory Services Are (and Are Not)

Most of the traditional services we think of as accounting and bookkeeping are compliance services. These include keeping up with the books, generating financial reports, and filing taxes—all compulsory for business owners. These services are focused on historical data.

Advisory accounting goes beyond this by examining the present or looking to the future and providing guidance to business owners. With the right direction, owners can make better-informed business decisions, increase their profits and cash flow, and avoid potential problems — but more on that later.

Consulting Versus Advisory

Consulting services are typically provided on an as-needed basis, often as one-time engagements. When the client runs into a problem, they call you up to ask for your help. You consult until the issue is solved, and then go back to compliance. You may collect a consulting fee, or—far too often—your client may just assume these 911 phone calls are part of the deal when they hired you.

Advisory services, on the other hand, are built into your engagement with the client. Your client knows you’ll provide guidance in certain areas, and they understand that they’re paying a higher fee for the added value of your advice.

In a study conducted by CPA.com, nearly 60% of accountants said that they offer advisory services. So, it’s likely that you’ve already been offering advisory in one form or another.

However, if you want the best results for you and your clients, it’s important to make it integral to your offering.

Compliance Versus Advisory

Compliance services are increasingly becoming a commodity. There’s little differentiation between the tax returns or financial statements produced by one firm versus another. The result is a race to the bottom in terms of pricing. This is why you see so many firms marketing themselves with phrases like “trusted” or “accurate,” which are standard expectations.

A way to set your firm apart is with advisory services.. You can add real value to a client’s business and help them reach new levels of success, and it all starts with your greatest areas of expertise.

So, What’s Your Specialty?

Start by asking yourself:

• What do you do best?
• What do you know that your client doesn’t?
• Where do they need the most help?
• What matters to your clients?

Through advisory services, you can help answer those questions by offering support such as:

• cash flow forecasting
• tech stack implementation
• budgeting
• business planning
• financing and loan applications
• operations reviews
• HR, payroll, and employee benefits
• KPIs and metrics
• pricing analysis
• technology training
• tax planning
• improving workflows

It can also mean helping your clients understand complex business issues based on their accounting data. For example: Advising on increasing revenue, reducing costs, determining the right time to hire, or renegotiating a bank loan.

Again, consider what matters to them.

What Advisory Can Do for Your Clients

A few years ago, I was working with a fitness studio owner looking to expand to more locations across the country. We went into our meeting with plans to review the previous quarter’s financial results, followed by an examination of the forecasts I had prepared for the next 3 locations they wished to open. (You can see that I was dabbling in advisory by forecasting.)

When the meeting started, instead of getting right into the numbers, we ended up spending 20 minutes talking about our children, business travel, and the mom guilt that we both felt as female entrepreneurs with children who sometimes have to be away from our families. We spent the next 20 minutes discussing staffing challenges they were facing and developing a plan to kick off a program that would help motivate employees.

Only then did we discuss the forecasts and opportunities for their 3 new locations to determine the capital required to grow their business.

That may sound like wasted “free time” chatting with a client and fielding questions, but it wasn’t wasted at all. It was an essential piece of developing trust and understanding. At that moment, she didn’t need just accounting expertise, she needed me to be human.

By empathizing, listening, asking questions, and contributing to the conversation in a relatable and authentic way, I was able to uncover the client’s biggest pain points and, ultimately, developed a better financial plan for her that aligned with her goals and values.

It’s Not All About the Accounting

As an advisor, it’s important to remember that clients don’t primarily value the spreadsheets, numbers, or the effort you put into creating them. What makes a real impact is the outcome. The partnership and relationship you bring to the table are a huge part of helping them get where they want to go. Financial reports and data should support client conversations, not monopolize them.

The fitness studio owner I previously mentioned initially came to me for bookkeeping and taxes, but she became an ongoing advisory client. She later confided that there was no way she would have been able to expand her business and add new locations without us. Developing that “partnership” plus the financial insight made it happen.

Key Advisory Advantages for Clients

When clients recognize you as a partner or integral part of their team, it can alleviate their stress about income and expense concerns and give them a sense of financial security for the future.

“The intersection of your client’s needs and your skills forms the basis of advisory.”

They can simplify their business and better understand their finances by collaborating with you, in FreshBooks or another platform. A powerful aspect of advisory services is helping clients design suitable workflows and coaching them to effectively use tools to streamline their day-to-day financial tasks.

Ultimately, advisory services are all about guiding your clients to overcome their biggest problems and achieve their biggest goals. These are unique to every business, and the intersection of their needs and your skills forms the basis of advisory.

It’s crucial to remember that many businesses don’t know what they need or what’s causing their biggest problems. They may also be floating downstream, headed toward a waterfall, and be blissfully unaware of the trouble coming their way. This is why it’s vital to build advisory into your service packages. Often, clients don’t know they need to ask for these services and won’t ask for your help in a consultative capacity until it’s too late.

What Advisory Can Do for You

Advisory services are a fantastic opportunity to grow, both in terms of income and professional development.

By embracing the FreshBooks Collaborative Accounting™ framework, you can revolutionize client interactions and enhance your capacity to deliver scalable advisory solutions.

Collaborative Accounting is a technology-driven approach to accounting, supported by a shared workflow between accountants and their clients. It streamlines front-end tasks for business owners through an intuitive software platform, leaving accountants the space to focus on high-value advisory services.

This approach offers numerous benefits, including:

• client experience
• pricing (explained below)
• niching
• scalability
• advisory

With Collaborative Accounting, the possibilities for enhancing client experiences and delivering impactful advisory solutions are endless.

The Benefits of Value-Based Pricing

Advisory allows you to create more value for your clients and increase your prices. If your clients still pay by the hour (27% say they still do), it might be time to reconsider your price structure. Value-based pricing ensures that your clients know exactly what it will cost each month and lets them clearly see the return they’re getting from your services.

Hourly rates, on the other hand, punish you for getting better at your job and don’t reflect what clients are actually paying for.

Ready to Get Started?

If you’re an accounting professional interested in offering advisory services but you aren’t sure where to start, begin by taking small steps.

The best thing to do is to get educated by obtaining the Collaborative Accounting certification. In under 4 hours, this program will guide you through various advisory opportunities related to the everyday tasks of business owners. It covers the framework in detail, including shared workflows for each front-end accounting tasks, tips on advisory conversations, and much more.

Remember, every journey begins with a single action. Your path to becoming an indispensable advisor for your clients starts today.

This post was updated in May 2024.