Few businesses remain untouched by COVID. Some, such as home delivery services and technology companies, have experienced unprecedented growth. Sadly, far more have been disrupted by lockdowns, problems with supply chains and customers struggling to pay their bills.
The Advisory Paradox
Whatever the circumstances, more business owners than ever remain in urgent need of sound financial advice.
It appears that the majority of accountants are aware of this. When CommBank canvassed their opinions for its June 2020 Accounting Market Pulse report, 70 per cent of respondents said they expected business advisory services to experience increasing demand ahead of business recovery and insolvency.
As the roller coaster of COVID continues, we’ve seen that some of the most resilient companies relied heavily on their accountants’ advice. Yet, despite all the time and hard work spent helping clients to navigate new requirements, access funding and do everything legally possible to stay in business, many accountants were too concerned for their clients’ welfare and financial position to charge anything at all.
“They’re a credit to the profession, but now it’s time for accountants to take care of their own future,” says Lynda Steffens, founder of The Small Business Project and a CPA who works with accountants to help them transform their practices. “COVID or not, it’s clear that clients can benefit from ongoing advice, and that’s a huge opportunity to for accountants to earn regular, significant extra income. The only thing holding them back is waiting for clients to make the first move.”
Clients need help but don’t ask for it. Accountants can provide the help they need but don’t offer it.
“That’s what I call this the paradox of advisory,” says Steffens.
1. The untapped opportunity of ongoing advisory
For Steffens, the most frustrating aspect of the paradox of advisory is that the situation could so easily be remedied.
“Accountants have the skills and knowledge to provide significant value to their clients – and they could transform their own business by simply initiating a conversation to demonstrate this,” she says. “For forward-thinking accountants, this is a perfect time to start building long-term and profitable advisory relationships.”
Many business owners start out with a great idea but little financial or business know-how. Yet running a company is complex and demanding. As COVID has so clearly shown, influences beyond our control such as economic conditions, technology, consumer expectations and supply chains can change rapidly – yet owners are constantly faced with make or break decisions.
“Accurate, up-to-date information coupled with a deep understanding of the business, its history and its goals can help business owners to make better decisions, respond quickly to opportunities and take steps to mitigate risk,” says Steffens. “This is exactly what accountants can provide.”
Longer term, many owners create a business with the intention of selling it in five to 10 years.
“They want to know the best ways to maximise their profits, achieve their goals faster and keep their business on track for a profitable sale,” says Steffens.
You know that you’re more than capable of providing this support and more, but your clients may not.
“Business owners are used to turning to their accountants for tax returns, tax strategy and the occasional ad hoc extra service such as creating a cashflow forecast for a bank loan,” says Steffens. “It might never occur to them to ask you for other types of business advice. They might struggle on, or turn to a business coach who could well be less qualified than you. This is why it’s vital you take the initiative, start the conversation and spell out the value you can provide.”
2. Ad-Hoc advisory is not the solution
The prospect of increasing demand for business advisory services painted a rosy picture for accountants – yet many are continuing to provide the same compliance and ad-hoc advisory services.
“They’re relying on clients to ask for a wider range of advisory services,” says Steffens. “Given that clients may not even know what they need, let alone what accountants can provide, accountants are letting this opportunity slip through their fingers.”
It’s common for accountants to assume that clients will expect any extra advice to be included in the cost of compliance. In fact, most would be more than happy to pay for information that helps them to run their business more successfully.
“This brings us back to the importance of knowing how to initiate these kinds of relationships,” says Steffens.
3. Moving beyond compliance to ongoing advisory
If you’ve been helping your clients to cope with the impact of COVID your advisory journey has already begun. They’ve seen for themselves that you’re willing to go the extra mile for them, perhaps without charge. Now is the perfect time to build on that by letting them know how much more you can do to support their business recovery and growth.
“This proactive approach may be unfamiliar and even make you feel uncomfortable,” says Steffens. “If that’s the case, just remember the paradox of advisory. You can help your clients build the business future they want. All you have to do is let them know. That could be all it takes to add a valuable, sustainable income stream to your own business.”