What you need to know

What you need to know

Jump to:

In today’s ultra-competitive business landscape, being an accountant means far more than preparing tax returns or compiling financial statements. It’s about finding ways to set your firm apart—and there’s no better way to do that than by offering advisory services.  

With technology that automates traditionally manual tasks related to core tax compliance work, more and more firms are capitalizing on the opportunity to hone in on and better execute long-term strategy by offering value-added accounting advisory services. 

But what does accounting advisory mean and how can your firm take advantage of this unique opportunity to showcase your knowledge and build deeper relationships with your clients? Let’s take a look at the basics.  

What is accounting advisory?

From tax planning and strategy to counsel on tax-related legislation, accounting advisory includes a variety of engagements in which clients rely on an accounting professional’s unique knowledge and experience. The guidance you provide can help streamline accounting processes, improve profitability, and enhance overall decision-making. This trend is picking up pace as more and more accounting firms use technology to their advantage.   

With APIs that can automate the entire tax compliance workflow, accountants no longer have to spend their time on manual activities like entering data, identifying blank fields, or searching for numbers that don’t add up. Instead, they can shift their focus to more value-added activities like providing financial insights and helping clients navigate the complexities of tax law. 

This is the ethos of accounting advisory: using your unique tax and accounting knowledge to position your firm as a trusted year-round partner, not just a once-a-year tax return provider.  

And not only is accounting advisory work more profitable, but it also enables more meaningful relationships with clients and a deeper sense of purpose in the services your firm provides.  

Hear from accountants who made their advisory journey with Practice Forward, a content solution and coaching service for firms wanting to grow and develop client relationships. Watch now >> 

What is the difference between accounting advisory and consulting?

Perhaps the most significant difference between accounting advisory and consulting is the amount of time services are provided.  

Typically, accounting advisory is a long-term collaborative relationship over an extended period of time (often many years), while consultants come on board for short-term projects (usually 12 months or less) and provide specific recommendations which are then carried out by the client. 

Advisory services make sense for accounting firms who already have the trust of their clients and are looking to provide a more robust and holistic set of services, while also growing their business. Consultants often don’t have the deeper, more personal knowledge of the client.  

In general, an accounting adviser is closely involved in their clients’ long-term success, while a consultant provides strategic guidance and recommendations on specific issues or challenges.  

What are considered advisory services?

From a tax and accounting firm perspective, the following activities are considering advisory services: 

  • Tax planning and strategy 
  • Counseling on tax related legislation 
  • Setting and achieving business goals  
  • Understanding Key Performance Indicators (KPIs) 
  • Strategic planning  
  • Examining overall profitability  
  • Investing and wealth management 
  • Cash flow forecasting 
  • Benchmarking and analysis 
  • Budgeting 

Essentially, accounting advisory services are geared toward identifying a clients’ business goals, setting the path toward those goals, and guiding the client down each step of that path. As you and your staff gain a deeper understanding of the expertise your clients really need, you will become empowered to identify additional advisory opportunities along the way, like a niche in mergers and acquisitions advisory.

By offering advisory services, your firm can become a strategic partner versus a compliance processer. This shift not only increases revenue but positively impacts your clients’ business and financial lives—and opens the door to more meaningful work for you and your staff.  

How do you know if advisory is right for you?

Sometimes, the best business insights come directly from those you serve. The trick is being attentive enough to notice and agile enough to make their demands a reality. 

If a client comes to you with a question that goes beyond the scope of their tax return, put your radar up. There’s an unmet need there—and it’s an opening into a new relationship you can’t afford to overlook. 

Even when clients come to you with a simple request, like “file my tax return” or “handle my payroll”, they often are looking for much more. “File my tax return” might actually mean “help me with tax strategy”.  

To determine if your clients are in need of advisory services, ask yourself: 

  1. Are they coming to you for more than just tax return preparation?  
  2. Are they asking for counsel on tax-related legislation, business decisions, or strategic planning? 

If so, it’s time to capitalize on these opportunities and shift your firm to an advisory-based model. By doing so, you can not only make the most of these opportunities, but learn how to build a brand around them, price your services competitively, and reallocate your resources appropriately.

Additionally, many accountants are overloaded with tedious work and have lost the spark that once drew them into accounting. The true value of moving to an advisory-based model is that it will reignite your passion for serving clients and enable you to do what you started out in this profession to do—help others.  

As you contemplate whether advisory is right for your firm, consider these questions: 

  • Do you dream of moving beyond tax returns and supporting your clients as a trusted business advisor 
  • Do you envision your experience becoming a major piece of your value proposition to clients? 
  • Do you enjoy helping others protect their wealth, grow their business, and secure their future for themselves and their families? 
  • Do you strive for a deeper and more fulfilling experience at work each day? 

If you answered yes to any of these questions, accounting advisory is right for you. 

Hear how Tracie Hannick, President of Bean Counting Firm, Inc, used Practice Forward to gain confidence and realize the value her and her staff bring to their clients. Watch now >> 

What is an advisory scope agreement?

A scope agreement clearly explains the scope of your services — what is included and what is not. This is particularly important for accountants who find themselves unknowingly giving away tax advice for free by answering one-off questions on a regular basis.  

Being clear about what is in scope, and what is not in scope will help you identify other opportunities that may exist to help your clients. These conversations can open up a dialogue and change the dynamic of the relationship—from feeling obligated to answer casual questions to a more formal transaction that supports your client and grows your firm.  

Scoping your advisory services can be a challenge and opportunities are often missed. To start: 

  • Think through your clients’ needs beyond tax returns. 
  • Consider your firm’s unique knowledge and expertise in specific areas. 
  • Define your advisory services offerings and price them.  
  • Promote them to existing and prospective clients—and weave them into your conversations. 

It is also important to clearly explain how the client relationship will work. For example, how many meetings will the firm have with the client each year? When will those meetings take place? What’s the best way to work together (i.e., in-person, calls, email, etc.)?  

Establishing a clear, well-understood scope agreement brings clarity and builds trust. With a scope agreement in place, your firm can kick off an advisory engagement with the right expectations in place and ensure they are understood from the beginning. 

Remember: As part of the shift to accounting advisory, your firm’s principal value will come from the insights and strategies you provide to clients. The tax return then becomes a byproduct of a strong advisory relationship.

“We had spent so much time developing our own materials and trying to develop that client relationship … Practice Forward was the biggest shortcut we could have ever taken.” 

– Lera Kooper, Firm Director, Accountability Services 

How do I monetize advisory services?

Traditionally, the revenue model for accounting firms has been a function of tax compliance transactions completed. However, this way of thinking can stifle your relationships with clients and result in missed revenue opportunities.  

Remember: Your knowledge and expertise are valuable to clients—and you should be compensated appropriately. That’s why the first step to monetizing advisory services is cutting ties with hourly billing and shifting to a value pricing model. Value pricing enables your firm to stay transparent, demonstrate value, and eliminate billing surprises. 

Some accountants fear losing clients due to higher fees, but the reality is, clients are willing to pay a premium when they have a clear understanding of the scope of the engagement and the value being provided. Shifting to an advisory services model strengthens your client relationships and opens up additional revenue streams based on your unique knowledge and experience. 

All too often, firms miss the mark and fail to realize that value is more important than cost. The advisory relationship is the anchor that enables you to build trust and provide higher-value services to your clients. It is the path to better understanding their goals and developing long-lasting and profitable relationships.  

To remain competitive in such a challenging business environment, center your offerings on value, not cost, and make the play for your clients’ business beyond this year’s tax filing. Meaningful year-round client relationships reinforce that you are not just a transactional expense, but a committed partner who is there to provide support during tax season and beyond. That’s how today’s accountants can build successful and sustainable businesses that thrive long-term.

Hear how Rick Sager CPA, Owner of Sager & Associates, CPAs, used Practice Forward to get paid for his expertise. 

Watch now >> 

What are the responsibilities of an accounting advisor? 

Advisory services are more in demand than ever. With technology taking over manual tax compliance tasks, accountants can devote more time to higher-value accounting advisory activities like: 

  • Financial forecasting 
  • Financial health evaluation and recommendations 
  • Year-end financial statement preparation 
  • Financial statement analysis, interpretation, and evaluation 
  • Advising on regulatory compliance issues 
  • Profitability analysis 
  • Accounts payable analysis, including cash flow, workflow, and savings investigations 
  • Accounting service needs identification 
  • Accounting process evaluation and system implementation 

This changing skill set allows firms to go beyond traditional compliance roles and become trusted advisors for clients — resulting in stronger client relationships and more fulfilling work.   

What are the top advisory firms?

The four largest professional services networks in the world are Deloitte, Ernst & Young (EY), KPMG, and PwC. They are known as the “Big Four” as they are the four largest global accounting networks as measured by revenue. And you can bet these firms are not giving advice away for free.  

Among small, medium and large accounting firms, a growing percentage of practitioners are beginning to consider ways to value and price their accounting advisory services as a billable product. Many, however, still find themselves stuck in a pattern of giving away their expertise for free. 

There is a big difference between offering free advice and offering advisory services. But where do you draw the line between compliance work and accounting advisory? The answer lies in adopting a proven methodology, guidance, and content solutions that can help your firm develop and implement an advisory services approach to engaging clients. 

Firms who have made the move to advisory have seen these results*: 

  • 150% increase of existing client monthly billings 
  • 200% increase of new client billings 
  • 2-3 months after starting implementation, Practice Forward pays for itself

*Averages of data provided from existing Practice Forward firms who have completed their implementation 

Why is advisory important?

For many firms, recent years have made it clear that serving clients is not all about tax compliance. It’s becoming increasingly necessary to develop personalized tax strategies and mitigate tax consequences. 

Plus, with technology taking over much of the work related to traditional tax compliance, the long-term success of today’s accounting firms hinges on building and sustaining deeper and more meaningful client relationships. Carving out your niche, so to speak.  

What makes advisory services so important is that your unique expertise becomes the centerpiece of your value proposition. From helping clients protect their wealth to supporting small businesses to securing a future for families, the shift to advisory is not only more lucrative, but offers a deeper and more fulfilling work experience.

Practice Forward is the greatest thing we’ve ever done for the firm. It was the catalyst to force me to run my business as a business owner, not as a CPA doing tax returns and advising clients. It was life-changing for our firm and for me.” 

– Glenn Harper, CPA, Owner/Partner, Harper & Company CPAs LLC 

Why work in advisory?

Shifting to an advisory business model provides your clients with the guidance and support they are looking for, while enabling you and your staff to use your knowledge and experience to your advantage.  

With technology automating much of today’s tax compliance work, you can shift your firm’s engagement strategy for new clients based on the value your firm brings to their business. Client engagements are rightfully centered around your client’s business goals and the guidance your firm can provide, in addition to traditional tax compliance.  

The latest advances in technology can also help you analyze trends and support your clients with meaningful insight that helps their businesses grow and thrive. As you and your staff begin to understand the challenges and opportunities of your clients, you can swiftly identify additional opportunities to serve them effectively.  

In the end, it’s all about transforming your firm from a tax compliance processor into a trusted, strategic partner. By capitalizing on your unique knowledge and experience, you get a powerful combination that engages staff, strengthens client relationships, and boosts your bottom line.   

Advisory skills

In addition to your tax and accounting credentials, accounting advisory requires a special set of soft skills and experience.  

A passion for serving your clients, a drive for excellence, demonstrated leadership, savvy communication, and detailed organizational skills – in addition to your more technical tax knowledge – play a big role in making the move to advisory services. 

Shifting to advisory is also a good choice for accountants thinking of leaving the profession. Strategizing with clients on a regular basis can bring the spark back to burned-out accountants. 

Ask yourself: 

  • Do you enjoy working closely with your clients and their staff? 
  • Do you like solving problems and implementing solutions? 
  • Do you have management and operational know-how? 
  • Do you have the specialized knowledge to be an expert in the industry you’ve chosen to focus on? 
  • Do you have insights into the day-to-day operations of the businesses you are targeting? 
  • Do you know how to network, market, and sell your accounting advisory services? 
  • Can you adapt quickly to changing environments and business systems when working with multiple businesses at the same time? 

If so, it’s time to put your knowledge and experience to work for you.  

How to start an advisory firm

Branching into advisory services establishes your firm’s value beyond just tax returns. It is the impetus for building long-term relationships with clients and sustained revenue.  

With an advisory business model that prioritizes improved compliance processes backed by comprehensive technology, you can begin your firm’s journey to offering expert advice that fosters a year-round relationship and more meaningful work. 

Whether you want to start an accounting advisory practice, or fine tune your current advisory offering, follow this definitive guide on how to start an advisory firm to shift to an advisory-centric approach and become a trusted advisor to your clients. 

Your accounting advisory roadmap

If you’re ready to start your advisory journey, Practice Forward provides a true roadmap for shifting your business model to support advisory centered client relationships.  

Through your Practice Forward implementation, you have access to over 160 tools, including proposal templates, pricing calculators and checklists, paired with personalized consulting to help you: 

  • Implement and execute a proven sales process 
  • Identify and package your firm’s services 
  • Develop a pricing strategy 
  • Standardize business best practice advisory delivery 
  • Transition existing clients to advisory relationships 
  • Uncover client advisory opportunities 

Each Practice Forward consultant is experienced in successfully guiding firms through the Practice Forward process. They dedicate themselves to helping your firm implement in a way that best serves your firm and your goals. 

Here’s a look at what you get with a Practice Forward membership: 

Exclusive resources 

Access to over 190 tools (templates, pricing tools, checklists, videos, and more) to execute the Practice Forward methodology. Your membership also includes unlimited access to the online Learning Plan which provides eLearning, videos, and guidance to implement with maximum success.    

Guided implementation 

Get 1-on-1 individual coaching sessions with a dedicated consultant. Your consultant will provide support and guidance, share best practices and recommendations, and hold you accountable to reach your goals. 

Advisory Office Hours 

Open invitation to join virtual meetings hosted by a Practice Forward Consultant. You will have an opportunity to ask questions, share stories and ideas, and hear from other firms navigating their advisory journey.  

Practice Forward Group 

Easily collaborate with other Practice Forward members, listen to recorded webinars and Pulse of the Practice podcasts, and share content in the exclusive Practice Forward Group.   

Virtual Events 

Practice Forward Webinars are CPE qualified thought leadership webinars that cover advisory centric topics and top-of-mind industry developments. Advisory Roundtables are virtual peer-to-peer events to connect and share with peers about best practices, challenges, and hot topics. 

Practice Forward Connect 

Join other Practice Forward members for an in-person event at Synergy presented by your Practice Forward consultants collaborating with forward-thinking advisors.    

Graduate Master Learning Series 

The Practice Forward Graduate Master Learning Series is a CPE qualified, 6-session program presented by our Advisory Partners. This series is designed to advance your firm’s advisory journey and enhance your skills and knowledge in the field of advisory services.  

Graduate Advisory Office Hours 

Join Practice Forward Graduate Advisory Partners as they host virtual office hours to provide a trusted advisor resource for you to get answers to your questions.  

Ready to start your journey into accounting advisory services? Visit tax.tr.com/practice-forward