Clients rarely ask for advisory services

A client is unlikely to telephone their accountant and say, “I think I need some strategic business advice.”

Instead, they say things such as:

“We are incredibly busy at the moment.”

“Margins seem to be getting tighter.”

“I am thinking about buying another business.”

“One of my managers is talking about leaving.”

“I am getting fed up with working these hours.”

“Someone has asked whether I would consider selling.”

Each statement potentially contains an advisory opportunity.

The difficulty is recognising it.

Ask the second question

Suppose a client tells you that turnover has increased substantially.

The natural response might be to congratulate them. The advisory response is to become curious.

“Has the additional turnover increased your profits?”

“Have you had to take on more people?”

“How is it affecting cash flow?”

“Can the business cope if sales continue to grow?”

The objective is not to turn every telephone call into a sales exercise. It is to understand what is actually happening.

Often the most useful question an adviser can ask is simply:

“Tell me a little more about that.”

Listen for change

Changes create advisory opportunities.

A business that has operated in much the same way for ten years may require relatively little intervention. But when something changes, the accountant's knowledge can suddenly become much more valuable.

The trigger might be growth, falling profits, recruitment, redundancy, new premises, borrowing, retirement, a new shareholder, a significant investment or a possible business sale.

There may be tax consequences, but tax is not necessarily where the conversation should start.

Start with what the client is trying to achieve.

Do not give the answer immediately

Accountants are trained to solve problems. Consequently, when a client raises an issue, the instinct can be to provide an answer there and then.

Sometimes it is better not to.

If the client mentions that margins are deteriorating, you could offer an immediate opinion. Alternatively, you could say:

“That sounds worth looking at properly. Shall we spend an hour going through the figures and see what is happening?”

You have just moved from an informal conversation to a potential advisory assignment.

More importantly, the client understands why the work could be valuable.

Create a simple follow-up process

The danger with informal conversations is that good intentions disappear when everyone returns to their normal workload.

When something interesting emerges, record it.

It does not need to be complicated. Make a brief note of the issue, agree any next action and put a date in the diary to follow it up.

Over time, those notes can also reveal recurring client needs around areas such as cash flow, profitability, succession, remuneration, funding or business valuation.

Those recurring needs can eventually become structured advisory services.

Advisory begins with listening

Developing advisory services does not necessarily require accountants to acquire an entirely new set of skills.

Much of the knowledge is already there.

The first challenge is creating opportunities for clients to talk about what is happening in their businesses.

The second is recognising the significance of what they tell you.

So, next time you ask a client how things are going, resist the temptation to move quickly on to the accounts or tax return.

Listen to the answer. There might be an advisory opportunity hidden inside it.