Independence from Compliance Work
What you’re being told
Every accountancy article I read is telling me that accountancy compliance work is disappearing. The drumbeat from the press is that “business advisory is the future; you must get into it now”.
Most of the 10 new accountants we speak to daily open with “I know that unless I diversify, I won’t have a practice 5 years from now”. Others say, “Xero and MTD are stealing my lunch, I’m going to have to do something”.
The proposition is so well rehearsed that it barely ranks as news. But what serious action is available?
We are fond of asking these accountants “are you on a burning platform?” and they reply “not yet but it’s coming. COVID19 and the IR35 deferral have helped but only delayed the inevitable”.
What you’re being offered
The accountancy software providers are responding with products that ‘guarantee to get you into business advisory work at the press of a button’.
The institutes have set up training in the subject, introduced advisory qualification categories and entered partnerships with start-up clubs which you can join for nearly free to meet new businesses. And they have authorised use of the expression ‘Business Advisors’ in all members’ publicity, which most are using.
The accountancy gurus are offering products, training and coaching programmes that don’t just improve practice profitability and your lifestyle but show you how to charge your clients more by adding business advice to your usual accountancy services.
When we ask how all these products work, how the clients react, what new skills they have been trained in, and how much new revenue has resulted, we usually hear “good question”.
So why the confusion over what everyone is advising and offering but apparently not providing?
Is this not the logical way to diversify and with all this help on offer why aren’t accountants getting into ‘whole business advisory’?
Bluntly, we haven’t seen any evidence yet that it’s happening.
What do you want?
What we hear every day is that accountants in practice are interested in ways to attain:
More clients
Better clients
Better staff
More revenue per client
More job interest
Freedom from drudgery
A saleable practice at retirement
Less regulation
and even…
A Range Rover
A better house
All at minimum cost, effort and risk
So what’s the SWOT analysis for accountants considering business advisory diversification?
Strengths
Trusted by business owners
Knowledgeable about business
Dependable
Existing client base
Premises
Staffing
Weaknesses
Marketing
Selling
Consultancy skills
Confidence
Clarity on what to offer
No products
Opportunities
£7m pa whole business advisory market in local postcodes
Fragmented service being offered by local consultants
High charge rates of local consultants
First into the market
Threats
Indecision
Risk aversion
Not acquiring sufficient skills first
Underinvesting in the opportunity
Client price resistance
How to decide
Actually, it’s a big step.
At face value what looks like a logical and simple transition is a big commitment of time, money, emotion and effort.
Consider this. You’ve spent your life as an accountant being trained for and in delivering services that sit in a regulated framework. It’s all in the past so you are dealing with facts and your role as the expert is to take information from your client and process it in ways that comply with the law.
Your client trusts you to do this because s/he knows you know more than him/her and s/he’s happy to delegate it all to you and sign off whatever you prepare for him/her.
And it’s very likely that you have a personality profile that is low in Dominance and Influence and high in Steadiness and Compliance. Very suitable for accountancy work where your strengths need to be in seeking evidence, taking the time to cross check, following the rules whilst not falling out with the client or getting too close to retain independence.
But the typical consultant tends to be the reverse: using high Dominance and Influence to make the sale, confidently predicting the client’s future, mapping out a course of action, persuading him/her to act on it and using their low Steadiness score to keep up a fast paced project implementation. And with that profile comes a ready acceptance of risk and the low Compliance needed to invent new rules that get the desired results.
So, the big decision for an accounting considering whole business advisory work is around personality.
The consultant is such a different animal, how to reconcile that with the accountant profile?
We have seen several approaches that work:
Undergo personality training and learn how to act the different roles
Integrate ‘whole business advisory’ work with accountancy work so that it becomes a single product that the practice offers.
Appoint a specialist Business Advisor partner
Next steps
If any of this rings bells with you, have a look here for some practical solutions
Written by Duncan Collins, Founder of Runagood.com Ltd