Earning a degree in accounting equips accountants with the technical skills for compliance but since the rapid advancement of technological processes, there is increasing interest to add value to both clients and accounting firms with advisory services.  However, unlike compliance, the process for advisory in accounting isn’t structured, repeatable or transferable. As a result, success with growing and maintaining advisory as a consistent revenue stream alongside compliance varies across accounting firms. In a lot of cases, advisory work at best is inconsistent, time consuming and results in significant WIP write off.

In this interview on the weekly Public Practice Accountants Club, Kyelie Baxter FCPA, Managing Partner of IQ Accountants asks Lynda Steffens FCPA, Founder of The Small Business Project about the reasons why ‘Advisory as we know it isn’t the answer’ and why accountants must follow a process specifically for advisory in accounting to achieve tangible results with clients and generate consistent revenue for the firm.

To watch or listen to the full version click this link.

Lynda Steffens:  Welcome to the Public Practice Accountants Club on Clubhouse, where public practitioner thought leaders, industry specialists, and accountants, just like you, discuss the hot topics in public practice and how they go about navigating the public practice landscape all around the world. Fundamentally, public practice has the same principles, dynamics and challenges no matter where we are in the world. And we might have some different tax seasons, busy periods and legislation, but at the core, we are very much the same. So in our room this morning we are turning the tables “Why advisory as we know it is not the answer”. And my amazing co host, I’m a little nervous about here, I have to admit, is turning the tables on me. But let me quickly introduce myself I am Lynda Steffens, an accountant and author and an introvert. And over the last probably seven to ten years, I’ve been coaching and consulting with accountants all around advisory. That’s why Kyelie wants to talk to me today. Welcome Kyelie Baxter.

Kyelie Baxter: Thank you so much. This morning I am going to do a bit of an interview question and answer style with Lynda about advisory, because we don’t often talk about advisory in our clubhouse room to a great extent. And this is the space that Lynda plays in, except for when I get on a bit of a rant and say how I don’t like the term advisory. I’ll probably unpack that a bit today as well.

I was at a meeting last night, and I have to tell you, it was like a board style meeting and I’m the token accountant. And we were sitting around talking about everyone’s skill set. And literally, someone said to me, and I cannot make this up. And they didn’t do it intentionally rudely, but still, they said, don’t you just do spreadsheets? There’s this perception that accountants just do spreadsheets. That was fun. And I guess a compliment that we don’t just do tax. But today we need to talk about the third thing we do other than taxes, which may or may not be advisory and add something to our toolkit.

Lynda Steffens: Yes, absolutely.

What is Advisory?

Kyelie Baxter: Without further ado, I think we should totally get stuck into it because I feel like, Lynda, you don’t let your light shine in this space enough. And we have this untapped source of brilliance in here that people maybe don’t even know that they could be asking you about, which is why I did suggest that we turn the table. Just so we can pick your brain a little bit and find out what you’re doing in this space. We would start by, and I do want to come back to the fact that you’ve named this topic “Why advisory is not the answer”, because I think that’s so interesting. Let’s first talk about what advisory means to you. And I guess in that is the definition of advisory. When we talk about advisory, what do we mean?

Lynda Steffens: Yes, that’s a very key point, because if you ask accountants what advisory means, you could ask 100 accountants and you’ll come up with 100 different answers. And that’s one of the problems with the word advisory. And again, why I don’t like the word advisory either. I use it because we’ve created it as an industry term, and we think we understand it. But to be honest, when we talk about it, we don’t really.

So advisory at its very basic level is anything that is not compliance. It is anything that you will do for a client that they don’t have to do from a regulatory perspective. It can be anything from bookkeeping audits, review of chart of accounts, that sort of level accounts payable, accounts receivable, right through to board meetings and how do you as the accountant help with the client’s business growth opportunities? Often when we hear the word advisory or I ask accountants, tell me what advisory is. I will often hear estate planning, succession planning, tax planning. That’s what I often hear. And I would consider those areas are certainly advisory, but they are quite highly niched type services.

There’s a whole lot more to advisory than that, Kyelie.

Why is the term ‘advisory’ misused and misunderstood?

Kyelie Baxter: Okay, so let’s unpack that a bit in a moment. I’m on a couple of Facebook groups for accountants because that’s the sort of dorkey person that I am. That’s the place that I hang out. And there was actually a post about this in the last week, which I found really interesting, talking about how accountants generally don’t like the word advisory. And I’m unpacking a little bit about why. And someone said, do they hate the word advisory or do they hate the way it’s bandied around? And someone else said, yeah, I think that’s right. And they also think it’s something that people have clung to when they don’t do tax. I don’t do tax. I don’t know how else to explain what I do, which I think goes hand in hand with what you have just said. And then someone else has said, “I hate it too, but I struggle with what to call it. How do we describe it, what we offer in addition to bookkeeping and tax?”

Lynda Steffens:  I think the most important thing is we need to try and rename this for ourselves. And you can call it whatever you want to call it. This could be at a firm level for you. There’s no rules in this space. And I think that’s the thing, spend some time defining what advisory is to you. Now, the way you go around doing that is to think about what are the things that you’re doing for clients that are not compliance. Go right back to the basic level and just list them all out. And then look at all the things you love to do with clients, the things that work the best with your client base, whatever that is, what works best with your employee skill set, whatever that is. Advisory is not about having to go out and learn a whole lot of other skills. It’s taking the services that you already know how to do and can deliver, and package them up into something that clients can understand. The first part is to define what advisory is for your firm. It doesn’t matter what anybody else is doing. Define it for yourself.

Kyelie Baxter: I really wish I had, like a sound effect that I could play. I should have been better prepared because you just said something that I think is like a penny drop moment, which is advisory is not going and learning a whole heap of new skills.

Lynda Steffens: Nope.

Kyelie Baxter: When you go out and you meet with accounting firms and you say that, surely half the people have got to be shocked, right?

Lynda Steffens: Yes, they are.  Because we’ve made this term ‘advisory’ because there’s been no definition to it. It’s been loosely bandied around. As you said, the people in your Facebook group were saying that it’s been used loosely to describe all these services that we don’t really know what to call, and then we’ve just made it hard for ourselves.  It’s one of those things, if you think about it, things are always worse in your head than they really are.

When we don’t really know what it is, we make it out to be hard… I must have to learn more skills or do another uni degree to do it… I need to be trained to do it… I need years of experience to do it… And I call that the ‘urban myth of advisory’. I think it’s a complete myth and it’s something that we’ve created ourselves. You don’t need any of those things at all.

Kyelie Baxter: That’s so interesting. So then where does this term advisory come from? Like, if we cast our mind back a decade.

Lynda Steffens: Oh, even more.

Kyelie Baxter: Yeah, a decade ago. Where were we at 2012? Were we talking about advisor in 2012? I think so. Where were you about in your business venture then?

Lynda Steffens: Back then, I was just come out of owning a public practice of my own, and I was doing some practice management for a large firm. And at that time, I think we were starting to hear the first talk of technology, of AI, of going to the cloud. That’s where we were all at. And it started to get that dietribe, I suppose, of ‘compliance will be dead’, it’s going to be commoditised. And that’s where I think this came from back then. So the question was ‘what’s the answer? How do we save our industry? What do we need to be doing?’ Advisory pops up, and I think that’s probably where it came from. I don’t know, Kylie. What were you hearing? Because that’s certainly what I was hearing.

Who gets the most value out of advisory?

Kyelie Baxter: Yeah. I think we’ve got the timeline right. Don’t even get me started about ‘compliance is dead’, it’s a topic for another day.  Okay, so that’s where it came from.

So then where is the value? I want to talk about when we think about advisory, where is the value? And for me, and I don’t want to take away from your answer, but for me, as the accountant, I look at the value line as here I am as the accountant, here I am as the client, and I’m like, who gets the most value out of this advisory? And sometimes I’m like, well, obviously it should definitely be the client. Right? But sometimes I think, wow, I have so much fun doing this. I wonder if it’s like a 50/50 split. So where is the value when we start delivering… and I don’t call it advisory, I call it “Getting to know your business better services”. But that’s just a term I use.

Lynda Steffens: Yes. I don’t call it advisory. I suppose I still add advisory on the end, but I call it business improvement. Just to be very crystal clear about what it does. It improves business, both for your client and going back to your win-win. It absolutely needs to be a win-win and improves business for you as the accountant. I think the thing is that often we can be caught in the trap, as we’re very supportive people, we’re very knowledgeable people. We want to help. And what we’ve seen happen over a number of years is that we’ve been delivering this ‘advisory,’ but it’s not necessarily been profitable or a win-win situation for us, if we really looked at it. The key to being successful with advisory is getting that win-win situation, not from only enjoying what you do. Because I tell you what, when you get this work right, as you would know, Kyelie, it’s the most rewarding thing you will ever do as an accountant. I absolutely love it. And I do it regularly as well as the other stuff. But it is also about being successful in business.

And I think we can forget that sometimes as accountants. We just had a recent topic in our Clubhouse room about thinking as business owners and taking a business outlook. That’s very important. But if you’re talking about the value, going back to the value. The trick is to really look at what clients are looking for first.

It’s fine to go “I’ve got all these services and I know these will help my clients”. But if you can’t tap into what the client really wants or position it in a way that the client can understand it, back to that term ‘advisory’, clients don’t know what it is. They have no idea. They’ll think financial planner, when you say advisor. They need to understand what it is, otherwise, it just sounds like paying for more compliance to them. And they don’t want to pay for more compliance. They already paid for enough.

Kyelie Baxter: Yeah, that’s interesting, because I sort of agree and I sort of don’t.  I think clients want extra services and they want more from us as accountants, but they actually don’t know what they want. They know they need extra help, but they don’t know what that is. So, they’re sort of waiting for us to offer them this suite of services, but they can’t even tell us the direction that they need help in. So, there’s like this stone wall that you’ve got to break down.

Lynda Steffens: Absolutely.

When Accountants get advisory right, what are they doing well?

Kyelie Baxter: And I think that’s got to be part of the skill set. And I’m sure that you cover that, which I want to unpack a little bit later. But first of all, I’d really be interested to know what you think, because you go out and you work with accountants, and you work with accounting firms and you run these courses. So you get to see, I would say, the good, bad, the ugly. Right. Like all shapes and sizes, people doing all sorts of different ways because we all run our firms completely differently. And my question is ‘What are most accountants doing right in this advisory space without even knowing it?’

Lynda Steffens: So I think the thing is, the ones that are doing it right and are being successful are instinctively following a process. Yeah. I think you talked about skill set. You talked about getting this information from clients so we can explain the value to them. There’s a bit of a knack in doing that, and some of us come by that instinctually, and that’s where we see then the firms that are doing advisory well, often there’ll be a unique individual in one of those firms that instinctively follows their own process about how they do advisory. The process for advisory involves firstly, gathering this information from the client so that you know what they want. We’ve got to invite the client into this relationship. And you need a process for advisory, because you can’t just tell clients what they want or assume that you know what they want, because that’s just not going to fly.

Kyelie Baxter: So we have to invite the client into an advisory relationship. That’s really cool, because I think a lot of accountants assume that because you’re already their accountant you’ve already got this relationship, this client-accountant relationship. I use the term relationship really flippantly. Like, I’m sweet with it. I say to clients, we’re a relationship-based firm. It’s fine. But a lot of people hate the ‘R’ word. They don’t want to have a relationship.

So we need to invite the client into these extra services. What does that look like?

Lynda Steffens:  This is the conversational piece about it. And I love how you frame it in what you do in your business as ‘getting to know your business’. To touch on what clients are really looking for from accountants… they know we know a whole lot of really cool stuff. They know that we have information that can help their businesses, but they don’t know what it is they need or how to articulate that to us. And we’re sitting there waiting for them to tell us because that’s who we are. We’ll say, ‘What can I help you with? Where do you want help?’ And you get crickets. So, it’s about drawing the right information out for you as the professional to be able to understand what it is they actually need. So the trick in all of this is… questions.

The key is to ask a lot of questions. Now, if you think about your product, Kylie, and I’ll call it a product, ‘getting to know your business’, well, that instinctively sets people up to go, well, she’s going to get to know my business, I guess she’s going to ask me a whole lot of stuff about it and what she wants to know to understand my business.

And as accountants, we’ve been taught to gather the information we need for compliance. Now, that often is a whole lot of financial information but when it comes to advisory type of work you actually don’t need a whole lot of financial information, particularly in the invitation phase.

Clients want to be understood, they want to be listened to, and they want to know that you can relate to them. The only way you can do that is by asking them a whole lot of questions, open ended questions about why they’re in business. Where are they now? What are the problems they’re experiencing? Where do they want to go? What does their dream ten out of ten business look like, this is the information that’s missing.

We’ve been trying to do this advisory piece without this information, and of course we’re failing. That’s why it’s hard, because we can’t do it like compliance. We’ve been trying to do it like compliance, and it just doesn’t work.

Kyelie Baxter: That’s so interesting because that is like a light bulb moment. It’s like trying to solve a problem and you don’t know what the problem is.

Lynda Steffens: Yes.

How do we get advisory right in the accounting industry?

Kyelie Baxter: And you probably just answered my next question, which was, what are most accountants getting wrong? And is that it? Is that the number one problem you’re seeing? People are like, ‘I’ve been offering advisory services for years. It just doesn’t work in my firm’.

Lynda Steffens: Yes. It’s the invitation. They miss inviting the client in. They miss connecting with and meeting the client where they are. It’s not about us. It’s all about the client. And when you learn or develop a process to be able to do that very effectively, clients are just banging down your door to do more. No one can tell me advisory doesn’t work, because it does. I had a meeting with a client last night at 7:15pm yesterday evening. And by the end of this invitation process that I use, they didn’t even blink at the next paid option that I gave them. And they just said, ‘Lynda, I just feel like you know us’ and that’s all they want, is to be understood.

Kyelie Baxter:  So practically then, if we’re thinking about this invitation thing, and I love the way that we’re talking about this and you’re outlining this process, because I think a lot of accountants, it’s true, we’ve been offering advisory services for years. It might not be taking off. This might be why… maybe we’re not inviting the clients properly.

So practically, how do you invite clients? I guess there’s a lot of different ways to do it. And off the top of my head, I’m thinking, do you do it in bulk? Do you send an email? Do you send a Google form asking them to fill in the form saying, are you interested in these services? Do you raise it at the year-end compliance meeting? If you’re already doing tax planning, do you talk about what their pain points are? Are those sorts of things that you mean?

Lynda Steffens: Absolutely, all of the above. So any opportunity that you can get is a great time to invite clients into an advisory relationship. One thing is to listen out for pain points, for grumbling, complaining, I’m working too much, I’m not getting paid enough. I don’t feel valued. I’m stressed. Or if a client says, ‘oh, it’s been a tough week’, you can say ‘tell me what happened’. But even if you don’t hear those words, you can still invite a client to consider an advisory relationship if you use a process. Because the process positions you to ask them the questions and discover if they’re interested in having access to regular advisory services.

Kyelie Baxter:  So we want to be solutions driven there. That’s really cool.

Lynda Steffens: Yes.

Kyelie Baxter:  So what I’m going to say is for the people in the clubhouse room, if you can share with us how you guys are offering advisory services. I think that would be really helpful for the conversation. I think it would be really cool to know how you’re connecting or inviting your clients to that advisory space. I’ll be super honest. I don’t think I or we at IQ do the best job of letting our clients know that we’ve got these services. And that’s probably an intentional thing because of capacity. Right now, I cannot take on another advisory client. I cannot take on any other clients. Right. But I can’t even take on anymore existing work. But now I know how we can do it when we get that space.  I think it’s really an interesting discussion to have.

Lynda Steffens: Absolutely. Yes. It’s that first step, and I think it’s that old 80/20 rule. It’s like you don’t need all of the processes for how we’re going to do this work, or necessarily all of the capability. This is the whole thing about a bit of an entrepreneurial journey, isn’t it? It’s jump off the cliff and build the plane on the way down sometimes.

Now, as accountants, we don’t really like that. That doesn’t float with us very well. But I think the thing is you can invite a few clients into this. Just test it. Just try a sample of your clients, see what words work, test and trial and see what happens. Does an email work? Just talking to them at tax planning time work, does just listening when, actually, I’ll tell you an inside tip, the best time to invite them is when they ring you up with a question, that is the best time ever. Here’s something someone just said, ‘well said, some clients are very unsure of what they want from us. We should have some process to find out what they actually want’

Lynda Steffens:  So that’s exactly right. It’s about instructing us to know what we are delivering instead of going off like a scatter gun and thinking that, yeah, they must want cash flows, they must want tax planning. Who knows? We’ve just got to ask.

Kyelie Baxter:  But can I be like the standard accountant that says when a client rings with a question, it’s always just a quick question. It’s really easy.  You don’t need to charge them for it. So how are we turning that into an advisory space?

Lynda Steffens:  That’s where the process or the structure comes into it. It really is important to think about what that looks like. How do you take it from giving advice for free and turn it into something that is valuable to your client, and improves the success of your business as an accountant?

That really comes back to structure and process. And look, there’s a lot of other providers out there, and it’s more than a software programme, by the way. And it’s not marketing smoke and mirrors either. There’s a number of providers out there in the advisory space but I don’t believe they have what I teach. I think I’m unique in the world around this, but it is really about a structure because you need to follow a process, your team needs to follow the process. Everybody who has an involvement in delivering advisory needs to understand what the message is about for advisory in your firm.

Business Metamorphosis® Advisor Training

Kyelie Baxter:  So that was my next question, about where you fit in? How did you find this space? So your space is, you’ve got this process for advisory that you teach accountants. Do you want to tell us a bit more about that?

Lynda Steffens:  Well, it does take some time. And what we basically say is, it’s not about having the soft skills or the conversational skills, some of us instinctively come by that which naturally forms a process for us. What I teach is taking the skills you already have, and we all have soft skills. We all have them. And I know you do because I see them in the students that I take through the Business Metamorphosis® advisory training. But what our course structure does is support them with learning the process and structure so they feel confident and comfortable to take the initiative to invite clients into advisory. That is what this is all about.

We have four key pillars that we focus on in our Advisory Training.

The first pillar is Mindset. We have to change our mindset around what we think advisory is, defining it and who we are as a professional in the advisory space. And everyone has heard the chatter around the expert versus the advisor mindset. We start to work on that through the learning content and right through the training.

The second pillar is the Advisor Framework. We have a structure and a process we teach that helps accountants feel safe while they’re learning how to deliver advisory.

The third pillar is capability. It’s all fine and well to gather the knowledge about what it is the client needs from advisory. But if you’re not going to put it into practise, then guess what’s going to happen? You’ll go back to your full-time job at your practice and do nothing with it.  That’s really important. We help you level up with capability so you build confidence as you learn the process and structure for advisory.

And the fourth pillar is Implementation. We don’t just give you the knowledge and after the twelve weeks send you on your way and let you go off on your own. We support you to implement the advisory process into your business with clients and with your team. We’ve got professionals in our team who have been in the accounting industry for not quite as long as me. I’ve been around accounting for a long time, but they’ve been in public practice accounting for 14 to 15 years.

They understand the daily demands of public practice and we work with your schedule to support you as you embed the learning with practical implementation with clients. Because you won’t get it right the first time, or the second time, but each time you put it into practice you improve.  And clients love it. Those four pillars are vital for success with advisory.

Kyelie Baxter:  Okay, so that’s super cool. And how do you do it exactly? Like, do you do it in one-on-one sessions?  You said the training is twelve weeks?  Is it online? Is it face to face? What are the options? Like, how does it exactly work?

Lynda Steffens:  The Business Metamorphosis® Advisory Training is both online learning and face to face because we all learn in different ways. There’s different components of the knowledge which we need to take in in different ways. And of course, we’re busy people.

So we need to fit this into our busy lives as well. We have an online learning platform where all our knowledge content is accessible. We’ve got modules with videos, reading and practical workbooks that students can work through during each week in the time they have.

Then each week we have a live group coaching call where we all come together as a group. All the students who are going through that particular intake will come together on the group coaching call and we’ll answer questions, debrief on what you found easy, hard, confronting, all of that in this lovely little safe environment. I also teach you about what I’ve learned and know works in the advisory space. I get to do some mindset wizardry on people and shift the mindset.

The third element is that we buddy you up with another student in the intake and they’re the people that you practise with one-on-one, to fine tune the practical elements of working with the process for advisory. That’s the capability pillar. It’s about practising and gaining confidence in a very safe environment first before you start working clients. Business Metamorphosis® is a twelve week training, and following that you go into implementation.

Kyelie Baxter:  Okay. That sounds really good.  My brain is just ticking because I think there’s not a lot of people that do what you do in our industry. Right. Like, there’s not a great number of people teaching accountants how to do advisory. Like, there’s a lot of software and there are some other people talking about how to implement advisory services but not how to actually roll out advisory the way you’re talking about with clients.

Lynda Steffens:  What we’re all about is the how. So we’ve heard for years why we should do advisory. What advisory is. And I’m not about to tell accountants how to suck eggs. You already know how to do the work of advisory. To be very clear, this is not about how to put a cash flow together. This is not about how to do tax planning. You don’t get work papers, you don’t get templates for the work. That is not what Business Metamorphosis® is about. This is about the invitation process and how you gather the right information from the client to know how to position your services.  It’s about how to roll out the advisory services you already have.

I don’t believe there is anybody else in the world that teaches the process for advisory the way we do. We see a lot of people that it seems like they do, but when people get into it and maybe some of our listeners out there have done some of these things as well because they’re striving to try and get this into their business. But when it comes down to it, these things are a bit marketing smoke and mirrors.

Which makes accountants feel uncomfortable. They’re more about the delivery of the advisory product as in the software. Software is a tool. It’s not going to do it for you, but yet software providers are helping the industry, but the software is a tool. It’s not going to magically do advisory for you. That’s why Business Metamorphosis® is different. And hand on my heart, I’ll say that, yes.

Kyelie Baxter: Okay, cool. There’s a couple of comments I just would love your take on.  Someone in the room has said ‘advisory sort of went on hold when covid came and prior to covid, we did do business improvement, but we seem to be reinventing the wheel each time. And I’m not sure if clients are willing to pay for that. And as a practice, I found it difficult to schedule this service without getting the distractions from compliance work’. I’ve totally been there. So, I have responses to that. But I’d love your take on that Lynda.

Lynda Steffens:  That’s really about a lack of structure and process for advisory in what you’re doing. That’s what we call ‘advisory as we know it’. And when we teach and talk about advisory, we’re talking about taking that and elevating it. So, when you’re doing advisory as we know it, it’s ad hoc, it’s different each time for every client. You don’t have a process, you don’t have a structure. So that makes it really hard to repeat. And it’s time-sucking. It just takes a lot of time. Now, the comment that I find interesting is that we stopped advisory in covid. That was 100% the best opportunity to offer advisory, if ever there was one. But because we got stuck into the compliance activities, we lost the moment.  The next best opportunity around advisory is to now leverage that ongoing contact that you had with clients because of all this compliance activity in covid into something more and invite them into a relationship. When there is a lack of structure and process for advisory, it isn’t repeatable or scalable, and that’s what makes it difficult to roll out. That’s why having a process for advisory is so important.

Kyelie Baxter: And there’s another comment here ‘What would you do if you were in my position in regards to business decisions? Hire more staff, new software implementation. So how do you turn that into an advisory opportunity?”

Lynda Steffens:  So that’s a question from a client? So again, it’s ask more questions. I think what happens is we don’t have a question mindset, we have an answer mindset. And what I always say then, is ask the client another question, put the impetus back on them. Because if we look at that, we have a natural problem solving approach to things. We get hit with the question, so we go, right here’s the answer, and I just answered that question. But you know what? You probably haven’t got enough information yet to even answer it. So asking ‘what are we trying to achieve by putting more software in? What are we trying to get out of this initiative for the business?’ And that’s the question/answer thing. We come at it from having to give answers. We come at it from that expert mindset of having answers when we really need to change our mindset and ask a lot more questions. And the light bulb moment you have when you first experience this happening with clients, and I’m sure you’ve had it, Kylie, when you ask the right questions, they come up with the answer themselves.

Kyelie Baxter:  Yes, It’s brilliant.

Lynda Steffens: Yes, it’s brilliant. And you’re sitting there as the practitioner going, hang on a minute, I didn’t have to come up with the answer. I just asked the right questions. And that’s when it’s fun. That is the best work you will ever do and feeds back into your success as a professional doing the work you love and profitability as well, simply because you made the time to understand your client’s business.

Business Metamorphosis® Advisory Training is a 12-week professional development program for accountants and accounting teams in public practice.  Designed to equip accounting firms who want to build consistent additional revenue alongside compliance services with a proven, repeatable process for business improvement advisory.

To find out more about the Business Metamorphosis® Advisory Training watch the CPD Advisor Masterclass to register your interest and receive information about the next Business Metamorphosis® Advisory Training intake.