What works in building a high profit advisory practice

Accounting firms are seeking ways to adapt to changing client exceptions, margin reductions and technological and outsourcing threats to their compliance business. There are accountants who are in denial, those that are accepting the threats but doing little to adapt and those that are taking action.  In the latter case many firms are looking for a “fast and easy” button for business advisory success. . 

 Our annual accounting industry research survey has identified three primary actions firms are taking to try to build advisory revenue:

  • providing sales training for their accountants
  • packaging services and offering package prices or subscription terms
  • purchasing software that is ‘designed’ to support advisory processes

Our research survey shows that firms gain little or no benefit from any of these tactics. 

Is it any surprise that sending accountants to sales training does not deliver any results? Firms that send their accountants to sales training show no increase in revenue from advisory services. 

We have visited firms that have an impressive display of brochures and marketing materials promoting the range of packaged services available for their clients. Our research shows the common strategy of packaging services delivers little if any growth in advisory revenue. 

A surprisingly large number of accounting firms have purchased software applications that are marketed as solutions that build advisory services and revenue. 

Our research shows that firms that spend money on software licenses and implementation achieve little or no growth in advisory services revenue. This did not come as any surprise to us after we spoke with many firms that have adopted this tactic. 

Our discussions with these firms uncovered the reasons why accounting firms that purchased business advisory software do not achieve any significant benefit. Some of these reasons are obvious and others less so. Below is a list of the most common reasons expressed to us:

  • Software applications require people who understand how to use it and are willing to use it effectively. 
  • Most of the accounting firms we spoke to were not offered a comprehensive change management plan to implement the software and this compromised user uptake. 
  • Software must adapt to best practice workflows and processes and not dictate these workflows to accounting firms. 
  • These systems automate some client communications (e.g., needs analysis surveys) and remove the personal contact and professionalism that clients seek from accountants and business advisors. 
  • Most accounting firms already use multiple software applications in the conduct of their business; adding more software to the work environment adds complexity and often reduces productivity.  

Sales training, packaging services and purchasing software will not build a profitable business advisory practice in accounting firms. If these tactics fail, then what works?

We are currently presenting the data from our 2019 Accounting Industry Research Survey and will be inviting participants to attend seminars in each capital city to review and analyse the results.

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