Digital transformations are happening throughout the business world, and thanks to such advancements in technology as cloud-accounting tools, AI, and automation, accounting professionals are under increasing pressure to expand the level of service they provide for their clients.

For your accounting firm to maintain its existing client base, attract new ones, and stay one step ahead of your competitors, you will likely need to offer additional services. By outsourcing tax return preparation, you’re already giving yourself a firmer foothold on the ladder to success, as you and your team have the time to focus on higher value services that you already provide. But will this be enough for you to guarantee profitability? Maybe not.

As it is, many accounting firms are turning to advisory services to be their saving grace, but why?

Below are just some of the reasons behind the shift to advisory services for many accounting firms:

  • Advances in technology

Technological advances give employees the time and resources to focus on high-value activities, such as offering financial advice and guidance.

  • Catering to new client demands

Nowadays, clients want their accountants to help them make financial decisions that are well-informed, calculated and free from risk, so that they can achieve their business goals.

  • Meeting competition

If your accounting firm only offers traditional accounting services, you might lose clients to those firms offering a range of financial advisory services.

What are some of the challenges faced by accounting firms wanting to move to advisory services?

There are a number of barriers and challenges accounting professionals may come up against when offering an advisory service to their clients:

  • Cultural resistance

With a culture focused on compliance, transitioning to a more advisory-oriented approach may cause concern among some firms, and a shift to their mindset and behavior may be required.

  • Acquisition of talent

Advisory services call for a team with a diverse range of skills, such as business awareness, communication, strategic thinking and relationship-building, and in the current climate, they may not be easy to find.

  • Client education

If clients don’t value advisory services, or don’t understand their value, they may not want to invest in them; preferring to stick to traditional, compliance-based services.

  • Pricing propositions

It can be difficult to determine an appropriate pricing model for advisory services, which unlike compliance-based services, are not necessarily set around the number of hours worked, and are instead set around a certain value.

  • Tech and tools

Paramount to the successful delivery of advisory services, is the leveraging of technology and tools, such as AI and cloud technologies; something some accounting firms struggle to select, implement, or even afford.

There are certainly challenges to offering advisory services for accounting firms, but it’s an area more and more companies are moving towards, and with so many benefits, its easy to see why. By taking advantage of bookkeeping outsourcing, and leveraging new technologies, your accounting firm can offer its clients more of the services they want, while deepening the relationship between both parties, and perhaps most importantly, increasing revenue streams.