If you’re an accountant, expanding your revenue beyond traditional accounting services can be challenging. Practice Ignition and Gusto expers provided knowledge and advice for expanding your services beyond traditional accounting and into expert consulting.
Practice Ignition is a service that creates automated business workflows for accountants and firms so that they can conveniently submit proposals and receive payment.
Practice Ignition and Gusto united forces and provided viewers with a webinar on January 13, 2021, all about accountant consulting, engagement letters, and managing consulting risk. Will Lopez and Josh Lance gave advice and tips that will shape the direction of your accounting firm or small business. Check out the full webinar here when you finish reading this article.
This post has five insights for accountant consulting from Practice Ignition accountant Josh Lance. Josh is a licensed Certified Public Accountant and a Chartered Global Management Accountant, and we’re incredibly excited to share his insights on the five pillars of accountant consulting.
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#1: Clients pay more to address accounting challenges
The first major insight that accountants should be aware of is that buyers are willing to pay more for what they view as challenging. Accountants can offer services beyond mere bookkeeping and tax returns — they can handle financial problems that the client may find exceedingly challenging handling themselves. Josh Lance observed that clients want much more than traditional accounting services for their businesses:
[The clients] want to pay someone that can take care of that burden for them, [who] can take that pain point away. That significant accounting challenge may not be too significant to us, but it’s significant to the client.– Josh Lance
An essential part of consulting with a client is to identify their pain point. A challenge that may be prohibiting their financial growth might be an easy fix for a capable accountant, but if the issue is complicated for the client, you can charge them more for your consulting services.
Some of those things will be typically solved very simply, but to a client, it’s not that simple, and it’s something that they need help with. We need to be able to identify … what those challenges are. And if you can identify that, you can get a higher price for addressing those challenges.– Josh Lance
Don’t merely offer your clients traditional accounting services — identify and fix the pain points that the clients are facing to increase your revenue! You can do your clients and yourself a service at the same time.
#2: Offer strategic advisory services
A key part of being a successful accountant consultant is recognizing that your biggest revenue opportunity comes from strategic advisory services. Josh noted that accounting firms that offer consulting and advising services have a significantly greater revenue opportunity than firms that do not. Strategic advisory services do not even necessarily have to do with traditional accounting. In fact, some companies hire accounting firms for customer relationship management consulting.
That’s a huge revenue driver into their firm, providing those services. That’s not bookkeeping. That’s not tax. That’s not payroll. That’s not traditional account services, … and it’s something that provides a lot more revenue opportunity.– Josh Lance
Your accounting firm can offer much more than traditional accounting services. Your firm might not provide customer relationship management consulting, but it could have another strength that you can use as a revenue opportunity. Josh used his firm as an example! The Lance CPA Group represents many breweries and restaurants that need additional help in human resources. Josh’s firm provides a human resource consulting service to assist clients and make extra revenue in the process.
“One of the things that we saw as a kind of strategic move when it comes to advisory services is an HR skew. We get a lot of questions from our clients … that are HR questions. … Those are really strategic advisory services that are not necessarily accounting services. … We can start to bridge into doing HR services, which we’ve done, and that becomes a new revenue opportunity for us that is significant, and we see more growth on that than we manage actually in our tax services that we have.– Josh Lance
What can your firm or small business offer outside of accounting services? Do they need help retaining employees? Maybe some help with navigating healthcare benefits? You may be able to address your clients’ additional needs that are not strictly related to accounting, and you can significantly increase your revenue as well.
#3: Understand what services buyers prioritize
A crucial part of consulting is knowing the services that potential clients prioritize and offering those services. When a potential client is seeking consulting or accounting services, they have particular needs that they’re trying to address. Josh observed that the services that a potential client prioritizes might involve the overarching direction of their company.
A lot of those priorities don’t revolve around transactional type services. They revolve around things that move their business in a direction. While a tax return is great, that’s not necessarily going to move their business in a direction.– Josh Lance
The transactional services that your firm offers may not be a priority for potential clients. Josh noted that companies might prioritize tax planning and strategic tax advice to grow their business.
He also pointed out that individuals and firms need to anticipate and address potential clients’ priorities to obtain their business:
They have priorities of what they’re trying to achieve, and as they look among other service offers, they’re trying to make sure those priorities are met. So if you have consulting services that meet those priorities, that allows you to serve them in that way.– Josh Lance
How can you address the priorities of your clients and future clients’ needs? Maybe you or your firm needs to move beyond traditional transactional accounting services and implement strategic tax plans to help your clients increase their revenue and move their business forward.
#4: Implement automation to increase your price
Automating some of your menial services is a great way to increase your service prices! Decreasing the time spent on repetitive tasks allows you or your firm to have more time addressing your clients’ needs. Josh noted that saving time via implementing automation can significantly increase the time you can spend advising clients:
Maybe our time for accounting is taken up by doing 80% … the kind of day-to-day entry type work, but automation, integration, and process improvement put in place, that may open up now 20% of our time. A whole extra day that allows them to focus on advising clients.– Josh Lance
Simply put, automating menial accounting tasks provides accountants with more time to serve their clients. However, many people may think that automation can hurt their potential revenue because it means that people in the firm are working fewer hours:
“By opening up that time to provide that high-level work, we’re able to get a higher price for that. I think some people, especially when it comes to automation, start to fear that because if you’re billing by the hour, it takes me less time, then I charge less. The goal here is value to our clients, and if we can get that value there, in a similar amount of time by automating and integrating our work and our systems together, that opens up that price increase.Josh Lance
What tasks are you performing that you could automate? Saving time by automating menial tasks will give you more time to address your clients’ needs, and you’ll be able to charge more for your services!
#5: Value price the customer and offer consulting services
The final major insight is to evaluate your client and introduce more benefits. Some customers may require more of your time or more services, so you can introduce benefits beyond the bottom line services that an accounting firm typically supplies and charge more money for your services. By introducing more benefits, you can charge more and potentially have fewer clients.
Josh observed that a major benefit that you or your small business can offer is consulting. In fact, several accountants and small businesses often supply clients with consulting advice without actually charging them:
It’s almost 70% increase on the consulting services from $153 billion ten years ago to $258 billion as of now. While consulting may not necessarily be a traditional service that’s delivered by a CPA firm, … think about how many times customers have asked you for advice. Maybe it was on hiring/firing decisions, layoffs, PPP advice, CRC advice, … [or] cash flow management advice.Josh Lance
The potential revenue in consulting is growing rapidly, but CPA firms often offer their clients free financial advice. Rather than providing free advice for your clients, you can start incorporating a consulting component into your small business or accounting firm and financially benefit from your advice!
A lot of ways, we can change this ad hoc advice into more of a consulting opportunity where it says, ‘Hey, a lot of people need this information. How can I get this information delivered to them and provide a service in a way that they’re able to use that information to better their business or make more strategic decisions, or save on taxes that they owe?’ That’s a way we can now build consulting into our firm.– Josh Lance
Providing consulting services for your clients increases your revenue well beyond what you could potentially make from traditional services offered by a CPA firm. There isn’t much flexibility in providing tax services, but there is no limit to the amount of consulting you can do for your clients.
Although Josh encouraged small businesses and accountants to get creative when offering consulting services, he stressed that consulting needs to come from a place of expertise:
You can’t just start dishing out advice willy nilly and say whatever you want because you can get in trouble still with that. … We want to be able to provide advice, take our knowledge and really help drive our business that we are working with so they become better businesses as a result because they are tapping into knowledge and expertise that we have.Josh Lance
Accountants and small businesses can offer consulting services that utilize their fields of expertise to benefit their clients and increase their own revenue.
Learn more about accountant consulting!
Our partners at CPA Academy and Practice Ignition have invaluable advice for accountants and small businesses. CPA Academy contributor and Practice Ignition accountant, Josh Lance, described five essential insights for accountant consulting:
1) Clients are willing to pay more to address their accounting challenges.
2) Offer strategic advisory services.
3) Focus on accounting services that companies prioritize.
4) Implement automation to increase your prices.
5) Value price the customer and offer clients consulting services.
If you want to learn more about accountant consulting, including engagement letters, managing consulting risk, and much more, make sure to check out the full webinar here. Additionally, sign up for a free 14-day trial of Practice Ignition to receive sample engagement letters and tools so that you can submit proposals and receive payment from their convenient website. Also, be sure to check out Part Two of this CPA Academy webinar here to learn tips for evaluating expertise during consulting.
If you want to begin incorporating lucrative consulting services into your firm, consider using Gusto’s People Advisory Certification program. You and your team can become certified in various people-based consulting services, including HR, payroll, and benefits while also earning CPE credits.
Learn more by visiting our People Advisory Certification program page.