A good way of thinking about CPA firms is to break their services into four categories:
- Audit and attestation services
- Tax planning and preparation services
- Accounting and bookkeeping services
- CFO and advisory services
The highest maturity of CPA services delivered are in the first two categories. Leveling up to CFO and offering advisory services is where many struggle. And that’s not to say that most CPAs are incapable of being advisors. In fact, 60% of accountants already claim to offer advisory services to their clients. But with a looming CPA shortage, the reins of many firms will be left in the hands of CPAs who may not know how to properly navigate or communicate the importance, value, and structure of CFO advisory services to their clients.
This is, quite obviously, a longer conversation that requires more in-depth training. But to help you get started and keep you on track, do a quick check to make sure you’re properly communicating advisory services to clients.
1. Understand the Difference Between Consultants & Advisors
Common terminology in the CPA industry can be confusing at times. However, understanding and communicating those differences will make a big impact on your interactions with potential clients.
Such is the case with helping clients understand the difference between a consultant and an advisor.
Consultant: A consultant is someone who has a specific skill or ability. When clients pay for a consultant, they’re paying someone to perform that skill or ability within their organization. It’s best to think of consultants as subject matter experts and performance experts. Sometimes, we call them “ninjas”. You hire them because they’re highly skilled or talented at a specific role that you can’t do on your own, and they’ll get it done for you quickly, efficiently, and to a high degree.
Advisor: An advisor is someone that's going to come into the organization and they're going to teach. They may be a subject matter expert, just like a consultant. But they’re not the one who is going to do the core of the work. They’re there to help you understand what that service is all about and how that service impacts the company’s goals.
You need to make sure clients understand that they’re getting different services when they hire a consultant and when they hire an advisor. If they just want a task done by someone who’s an expert, they hire a consultant. When they want to understand what that service means to their business, they hire an advisor.
Typically, you can be both an advisor and a consultant, but if you’re going to be both to a client, they need to know the differences in those services, and how those differences impact the price they’re paying.
2. Communicate the Value of Advisory Services
CFO advisory services are among the most profitable services that you can offer to clients. The most successful accounting firms on the market now provide CFO and virtual CFO services as their top-level, holistic package.
Think of it in terms of a hierarchy of profitability and value to the client. Every company needs tax services, and most CPA firms offer that as a standard. Every company needs regular bookkeeping, so they’ll hire someone to do that, too. And because most CPA firms offer those types of services, and do them well, the value in those as standalone products is limited. You can make a good living doing it, but that’s a tight market with a ton of competition.
However, helping businesses be strategic when dealing with their financial data should take the lead. You can and should prepare tax documents for clients. But you can also help them understand the business implications of their tax landscape before they have to file taxes, during the tax preparation process, and after you’ve filed.
Do you get the point here? The same is true of every service you offer. They should all fall under the umbrella of your advisory role. As a key advisor, you should help them understand the interconnected way their cash flow impacts their business and help them make the right decisions based on what you see in their books.
So, take a step back and think about how you communicate your services. Are you leading with advisory, or are you leading with everything that falls under the advisory role?
3. Be a Skilled Communicator
To truly differentiate yourself in a saturated market, don't merely perform tasks — provide insights. That ultimately starts with understanding the differences between just being a service provider and being a strategic financial advisor. If you can’t properly explain those differences to yourself, you’ll struggle to help clients understand what that means as well.
This is a pretty dense topic, and we’ve only scratched the service. To learn more, check out Episode 101 of our Modern CPA Success show featuring Roger Knecht, President of Universal Accounting Center.