How to become an innovative advisory firm

The advisory industry is changing very fast, but not all firms realize it. What can you do if your advisory is not getting the most out of new technologies? In this guide we’ll see how you can secure the future of your company.

The path to change

Using online tools, advisors can perform basic tasks in an easier and faster way.

This leads to a decrease in income for those advisory firms that base their billing on hours. But it also opens many opportunities, such as the possibility of offering new services to clients and generating more income thanks to them.

So, this change that is taking place represents a great opportunity but also a risk. Advisory firms that fail to adapt will see their income from traditional services decline. On the other hand, those that manage to adapt will:

• Work more efficiently.
• Get more clients.
• Bill more for high-value services.
• Have more profits.

But in this guide we won’t just talk about how good it is to adapt, but also about the best way to do it.

We’ll talk about the transition process from a traditional advisory to a modern advisory. You’ll also be able to identify where your advisory stands right now.

From past to present

Until now, advisory firms more or less followed the same pattern:

• Qualified staff dedicated to keeping accounting books and presenting reports to clients.
• Clients assuming that the advisor only serves to keep the accounting and file taxes.
• Advisors stereotyped by their clients.
• Services based on price/hour.

So most advisory firms have been busy warning their clients about accounting errors and fixing them. But very few have sold financial, tax, business advisory services…

Today advisory firms are moving towards online services - in the cloud. Basic tasks like entering expenses or making accounting entries, which until now needed a manual process, have been automated.

This is great news for advisory firms that can adapt, because the market is moving towards a continuous advisory model. Put more simply, a model where you can charge your client more because you provide a much more valuable service.

If your advisory hasn’t yet adapted to online accounting, don’t worry more than necessary. It’s probably in one of these three stages - and with a little work it can surely make the complete transition:

Stage 1: Static and traditional advisory

Advisory firms that have been in the sector for a long time can be very resistant to change because they have:

• A cultural resistance to change.
• Fixed workflows that haven’t changed for years/decades.
• Desktop computers with old programs.
• A billing system based on work hours.

Advisory firms of this type have been using old programs and workflows for a long time, which can be a big problem when change is inevitable.

If you think your advisory is in this stage, there are some steps you can follow:

• Talk to influential people within the company and show them the benefits of new technology.
• Distribute reports and articles about the change taking place in accounting.
• Report on the potential savings and profit increases that change can bring you.

In some cases, change can only occur when old-school workers/partners retire. But many advisory firms, even those in this stage, realize that change is inevitable if they want to survive.

Stage 2: Advisory in transition

There are many advisory firms, most of them, that are in this stage. These are advisory firms that have done market research and have already discovered where it’s going. As a result:

• They have started moving towards online programs, while still using some old programs or systems.
• They adapt to new technologies as they become more common and their clients ask for them.
• They make the change when it’s practical, but not throughout the entire structure nor strategically.
• They have a mixed structure - technological/traditional - depending on the services they offer.

If your advisory is in this stage, you’re going in the right direction and you can help the transition in this way:

• Increase the use of online programs, which facilitate access and modification of data from anywhere.
• Look for ways to improve productivity, such as new workflows.
• Make better use of collaborative tools like Google Apps.
• Move your advisory towards a fixed service or based on high-value services.

It’s a good time to be in this stage. But you still have one more stage to go.

As the market moves towards online tools, clients become more demanding.

Stage 3: Modern advisory

Advisory firms in this stage are getting the most out of online accounting. They understand modern practices and use them every day. For example:

• They have a partner who handles technology, with an involved team.
• They use cloud systems to manage their own businesses and to offer their services to clients.
• They have clients who also use online programs - in the cloud.
• They and their clients can work from any device: PCs, Macs, tablets or smartphones.
• They monitor their productivity and make strategic changes when necessary.
• They charge their clients through fixed fees or based on the value services they offer.

This type of advisory is responsible, proactive and involved with the client.

Let’s now talk about the reasons why it’s so important to become an advanced advisory:

Standing still is not an option

Although we’ve talked about the change that advisory firms are experiencing, this is only part of the reality.

Technology is modifying each and every aspect related to businesses. From manufacturers, to distributors, retailers or service providers, everyone will have to adapt to a new reality.

Small business owners and their workers spend most of their time using new technologies in their jobs or homes. And they expect the same level of automation and simplification in all aspects of their lives. That includes invoicing and accounting.

So, the pressure to adapt doesn’t just come from the market itself or competition, it also comes from your clients. Standing still and waiting for the wave to pass over you is not an option.

The conditions for being up to date

The characteristics of each advisory will depend on their sector and type of client, but generally speaking, if you want to compete successfully in the new world of accounting you need:

Use cloud programs

It makes perfect sense to move all your programs to the cloud. This includes data storage, computer programs and communications. There are several advantages to this. With everything secure in the cloud, IT costs are reduced, and backups and updates are automatic. And even more important, you and your team will be able to access data from anywhere and at any time.

Strong collaboration with your clients

Communication is the foundation of an effective business. The greater the communication with your clients, the better you’ll understand their needs. And this will help you identify areas where you can offer new services.

Agile management of your clients

Unlike traditional firms, modern advisory firms can meet their clients’ requirements and even stay ahead. This increases value for your client, and allows you to charge more for your services.

A consulting model

Modern advisory firms focus on providing knowledge, not just services like doing taxes. New online accounting programs take care of basic accounting. So selling knowledge is where the market is heading.

Active marketing

Modern advisory firms bet on marketing their proposals. Marketing is now based on social networks and updated and dynamic blogs or websites. You need to be where your clients are.

The 3 main benefits for your advisory

When you’ve achieved the transition to modern advisory, the benefits are significant. These are the main ones:

1.Increases productivity

Advisory firms that work online can perform tasks much faster than traditional ones. With most of the work automated, what used to take days or weeks can now be done in a few hours.

2.More clients

Spending less time on basic tasks means having more time to dedicate to other more important tasks like getting new clients.

3.More services that add value

Instead of selling basic services, you can add more value to your clients by offering them solutions for their business. This will give you other sources of income and of course is much more interesting for you.

In summary, modern accounting allows you to:

• Improve the efficiency and productivity of your advisory.
• Be much more agile.
• Improve communication and collaboration with your clients.
• Use your skills to maximum potential.

6 practical steps to become a modern advisory

We’ve already talked about the stages to become a modern advisory and also about the objectives you must achieve. But, how do you achieve these objectives? Here are some practical ideas that might help you:

1.Get informed

Look for information, read websites, blogs and publications where you can learn and stay up to date. Attend conferences, debates, watch webinars or listen to podcasts. Learn everything you can about innovation in accounting.

2.Involve your team and your clients

The change towards a modern advisory is much easier when your team members and your clients participate in it:

• Ask your clients who are most adapted to new technologies what they like most about your service.
• Create a working group with several members of your team, identify inefficient work processes and look for innovative ways to work.

3.Access the cloud

Basic accounting work and repetitive tasks can be automated with FacturaDirecta. Your data and your clients’ data will be in the cloud, which will greatly simplify your work processes and increase their security.

4.Choose some first clients

Start with clients who can understand this change. Young people’s companies with less than 10 clients are usually a good choice, especially if they are professional services companies, creative agencies or online companies.

Businesses with a lot of inventory, complex processes, high transaction volume or with many software integrations are better left for later.

5.Leave some clients if necessary

If any of your clients doesn’t want to adapt to your new work system, you’ll have to make a brave decision. Keeping them will give you a lot of work and less profit. Before abandoning them, try to convince them again. They might see the light with a good explanation.

6.Attract innovative clients

The moment you become an innovative advisory, you’ll want clients who are also innovative. If you speak the “same language” everything is easier. You can find this type of clients by having a good online presence. It also helps to specialize in certain sectors that fit well with your firm.

Don’t forget to promote your advisory through your current contacts. The best way to get someone to recommend you is by asking them to do so. You can find new clients through your suppliers or clients for example.

Be part of the modern accounting revolution

Nobody says that change is easy, but it is inevitable. The market is changing so you must move out of your comfort zone to adapt and survive.

When you have an innovative advisory you’ll be able to:

• Win more clients.
• Do more interesting work.
• Be more efficient and productive.
• Charge more for your work.
• Achieve greater profits.

So start today. The sooner you enter online accounting, the sooner you’ll enjoy its benefits.