What The Heck is an Advisor?
Posted by Twyla Verhelst May 1, 2019
You need to be an advisor. Offer advisory services. Move up the value chain and advise your clients. Does this sound familiar? I’m sure it does. Nearly every conference that we attend, blog post that we read, webinar that we listen to… there’s either a very clear or very subtle, yet always consistent message: many aspects of bookkeeping and accounting work are being automated and we need to become advisors. But what the heck is an advisor anyway?
Recently we’ve had the opportunity to speak with bookkeepers and accountants of varying levels of experience and expertise from all around the globe. We’ve talked with them about the services that they’re currently offering, what services they desire to offer in the future, and what advisory means to them. From these conversations we’ve learned just how undefined, broad and mystified advisory services are.
Advisory services are undefined
I have yet to see a clear cut definition of advisory services. In fact, I don’t believe that one exists in the accounting world. And the fact that a formal definition doesn’t exist means that we have been able to attach the label of advisory to varying types of services offered to clients.
For some, including within our own accounting firm, advisory services equate to being an outsourced CFO. Advisory in this form offers very high touch communication with the clients, often as frequently as every couple of days if you’re working with clients who are going through periods of growth, rapid changes, restructuring, etc.. This level of service often includes things like weekly cash flow forecasts, management of vendor payments, assistance with obtaining business financing, contributions to the business decisions of the client, the list goes on and on.
For others, advisory services are less hands on. Advisory services where you perhaps do semi-annual or quarterly check-ins with each of your clients, providing them with the opportunity to express any concerns or challenges that they are facing. To share how their year is shaping up so that you in turn can provide advice or feedback on how to minimize the tax consequences from a midyear decision or recommend some technology that could make their lives easier or streamline their processes. Again, this list also goes on and on.
This lack of definition of advisory services may seem to make things blurry or confusing, but in actuality, it’s to our advantage. It allows us as accountants and bookkeepers to tailor our services to fit our accounting practice, our expertise, our skill sets, our niche and even our personal business style.
Advisory services are broad
My very first job after university was in an accounting firm that ironically looked like the non-cloud version of the accounting firm that we operate today. We did bookkeeping to CFO level functions, an outsourced accounting solution for small businesses. Since this was my first real accounting job I naturally handled a good chunk of the bookkeeping work. After all, I’m speaking about a time when we used QuickBooks desktop and Simply Accounting as our primary accounting systems. A time when there was a lot of data entry and manual bank reconciliations to be done. Nonetheless, every couple of days my boss would push me outside of my comfort zone and give me a task that was certainly not traditional accounting. To give you the most obscure example that I can recall, one of these non-traditional tasks was appearing in small claims court on behalf of one of our clients. Really? Appear in small claims court? I sure did! And folks, that small claims court appearance was an advisory service. It’s certainly an extreme case, but I think it paints a picture of just how broad these undefined advisory services can be.
Advisory services are mystified
With the knowing that advisory services are undefined and extremely broad, the result of this lack of clarity is that we’re often mystified by the term advisory. In our recent conversations with bookkeepers and accountants, we’ve found that many accounting professionals are hesitant to give themselves the title of advisor. There’s a misnomer that ‘it’ is something that they are not doing. But they actually don’t know exactly what ‘it’ is. Again, because it’s not clearly defined.
Consider this analogy… calling yourself an advisor is like calling yourself a runner. Let me explain. In a recent conversation with someone I had just met, I very casually mentioned something about running, so casually that I don’t even recall what I said that he picked up on. However, he heard something in our conversation that prompted him to ask “so you’re a runner?”. My response to this question was simply “I don’t know that I would go that far.” But that response actually got me thinking about how undefined being a runner is. To give you some context, I’ve actually been running consistently for over 18 years, I’ve done countless running races including a marathon and two ultra marathons. Running is part of my exercise regime and funny enough, I’m registered for two running races in the next four weeks. Yet, I’m hesitant to call myself a runner. And this hesitation comes from the fact that the title of runner is undefined and broad, similar to the title of advisor.
No one says that once you’ve run 25 races, you’re a runner. Or when you can run 10kms in under 55 minutes, you’re a runner. Or if you regularly run three or more days per week, then you’re a runner. There’s no clear definition or someone officially telling you that you’re a runner. It’s not like becoming a parent… your baby is born, now you’re a parent. And gosh there is no denying that you’re a parent each time that baby cries. Your title is now ‘parent’. And it’s obvious. But being a runner or being an advisor isn’t obvious. However, if you’ve ever stepped out the door with your running shoes on with an intention to pick up your pace to anything faster than your typical walking pace … you’re a runner. If you’ve ever provided a service to a client that is a service beyond blind and mindless data punching...you’re an advisor.
You’re an advisor
So let’s own it. You’re an advisor. I’m willing to bet that you’ve all had at least one conversation with a client that is beyond basic data punching. That client dialogue has already been there so you simply need to decide how much of these types of client interactions you want to include as a consistent part of your service offerings to your clients.
From my own experience, once we started to have these conversations with our clients, the conversations that are beyond the basics of accounting, our clients in turn started to engage us in more and more of their business. These conversations made them realize that we offer more than filing their tax return or completing their month end reports. It’s a matter of opening up this dialogue with your clients and letting it unfold naturally, as if you were talking to someone while waiting in line at the grocery store. Ok, perhaps us introverted accountants don’t always talk to people at the grocery store, but that’s for a future blog post. My point is, we now know that what advisory looks like for you, or for Debra the Accountant with a niche in hospitality or for Donald the Bookkeeper that researches the latest apps like it’s his full-time job, is going to be different.
With the mystification cleared and the awareness that advisory is undefined and extremely broad, as accounting professionals we have the opportunity to create and build our own customized advisory service offering for our clients. Services that fit our clients needs but also suit our experience, our passions, our areas of expertise and our desires as a professional. The services of an advisor.