Accountants: Adding Value To Your Business Clients through Accountability-Based Advisory Services

By Posted in - Members Blog on March 14th, 2016 4 Comments

Accountability-Based Advisory Services —The Value Pyramid

In part four of this five-part series we looked at the fourth layer of the seven-layer Value Pyramid for Accountants & Advisors: Commentary.

Commentary is a logical, necessary and scalable value-add to build on top of Clarity (the previous layer). But many business clients need more than just your commentary and insights. They also need your help.

So how do you scale that higher-level advisory “help”? If delivering this advisory work relies on the most experienced and senior people in the firm—the Partners and Principals—then you don’t have a business. You have a job. And an unleveraged time-for-money business model.

But what if you could add more value to your clients where its essence doesn’t stem from advisor experience?

Is it possible? Yes, if you have these four things in place:

  1. Advisors with the right personality traits and communication style.
  2. A framework for them to follow in their advisory sessions with clients.
  3. A training and mentoring system for developing your advisory team.
  4. The ability to market and sell your higher-level advisory services.

1. The right advisors

If you think a ‘high analytical’ advisor (who’s also probably low on assertiveness and persuasiveness) can deliver higher-level advisory services to your business clients, think again. (You can find out your own profile for free here.)

Any advisor who wants to deliver value higher up The Value Pyramid needs at least a moderate level of assertiveness. They need to tell other people what they need to do and, just as importantly, hold them accountable to their commitments. A low-assertiveness person will never do this. They’ll ask others what they want done, rather than tell them what to do.

The problem (which we covered in a previous post) is that the accounting profession tends to hire ‘human calculators’ rather than effective communicators. They have low assertiveness, and focus on tasks more than people. They often see clients as interruptions to their work, not realising that their clients are their work.

This is a major, systemic problem for the accounting profession. Especially if it wants to spend more time advising business owners about their future than reporting on their past.

Thankfully, your firm doesn’t have to suffer from this problem. You can build a different culture. You can attract, recruit and retain ‘people people’ as advisors on your team.

Not only that, but you must. Not just for your firm’s sake, but also for your clients’ sake. They need your help, but they don’t know how to ask for it. And you personally don’t have enough hours in the week, month or year to give them this level of one-on-one help.

But if you build an effective advisory team, your firm can offer that level of service.

So, assuming you’ve achieved this, you can then develop your…

2. Accountability-Based Advisory Framework

Here are the observations and beliefs the framework is based on:

  • Your clients know more about their business that an outside advisor ever will
  • Your clients know how to fix most of their business’ problems if only they:
    1. took the time to slow down and step outside their business’ operational whirlwind[1]
    2. asked themselves the right questions to focus their minds and actions.
  • People place a high value on being held accountable by a respected third party who has emotional leverage on them to make them:
    • comply
    • follow through on their commitments
    • push themselves.

Note that it’s called the Accountability-Based Advisory Framework, not the Experience-Based Advisory Framework? Here’s why.

  • Your advisors don’t need to draw on a vast bank of experience to add value to business clients in consultations.
  • Your advisors work through a questioning framework to draw the answers—the required actions—out of each client during the consultation. The advisors doesn’t come up with the ideas. Instead, they ask the business owner the right questions to focus their thinking so they come up with the ideas.
  • Your advisors—assuming they’re assertive enough—confirm what actions the client will take and by when to form an emotional commitment.
  • Your advisors then hold each client accountable to their agreed actions by checking on their progress and questioning them assertively when the agreed completion date arrives. This puts emotional leverage on the client and helps them consistently take action.

This adds massive value to clients. It helps them focus on the questions they should be asking themselves about their business. It draws the answers out of their vast bank of experience instead of the advisor’s. And it holds the client accountable to their agreed actions.

Why is this so valuable? Simple. It brings about positive change in the client’s business. It makes things happen. It builds their confidence as an entrepreneur and business owner (“success begets success”). They’ll build momentum in their business.

And they’ll become extremely connected and loyal to both their advisor and the firm.

So what does this questioning framework look like? What questions should an advisor ask?

Here’s an example scenario of a consultation with a client, which can be tailored for each type of firm and/or client.

Questions in the Accountability-Based Advisory Framework

Advisor:

As you can see in the recent Business Performance Insights report we produced for you, your inventory levels are showing some worrying signs.

Client:

Yes. I hadn’t realised that. It was good to see the graph showing that trend over the past few months.

Advisor:

What do you think is behind this increase in stock levels of those product lines?

Client:

Hmm. Let me think.

Well, I have set up some automatic re-ordering systems with a couple of major suppliers. Perhaps that isn’t working properly. Maybe it’s ordering a set amount each month instead of just topping up what we’ve sold in the past month?

Advisor:

What can you do about it?

Client:

I’ll check with the IT provider who set it up for us. It’s an integration between our accounting app and a third-party inventory management app.

Advisor:

Who is the provider?

Client:

Head In The Cloud IT.

Advisor:

When will you talk to them about it?

Client:

I’ll do it first thing tomorrow morning.

Advisor:

Okay, I’ll note that in our Mutual Commitments task list.

Client:

Alright.

Advisor:

What else could be causing the inventory level increase?

Client:

I think some of our product lines are a bit dated now.

Advisor:

What’s that doing to your business?

Client:

Well, it’s tying up cash. And people seeing the same old stock every time isn’t exactly helping sales.

Advisor:

What can you do about it?

Client:

Well, I suppose I could price it so it sells faster. Just to clear it out and free up the cash. Yeah, I should have a stock clearance sale.

Advisor:

Ever run a sale before?

Client:

No.

Advisor:

Do you know what you need to do to make it happen?

Client:

I’ll get our marketing agency to come up with a campaign to promote it.

Advisor:

Who is your marketing agency?

Client:

Marvin at Marketing Magicians

Advisor:

And when will you meet with him to scope and plan the campaign?

Client:

I’ll call him tomorrow morning to request a meeting asap.

Advisor:

Good. I’ll add that to our Mutual Commitments task list.

Client:

Okay.

Advisor:

Anything else that could be causing the inventory level increase?

Client:

We probably need to review all our product lines. We’ve just been adding them ad-hoc over the years. We haven’t been very methodical or analytical about it. We should probably drop some of them.

Advisor:

What can you do about that?

Client:

Well, I could do it myself, but I’d like an objective look at it. I need someone to look at what’s really going on—use all that data and analyse it properly. Could you give me a hand with that?

Advisor:

Sure. I’ll scope it out and give you a price by close of business tomorrow.

Client:

Okay. Thanks.

Advisor:

Okay, something else for our Mutual Commitments task list. But it’s a task for me this time. We’ll do an analysis product line by product line and see which ones contribute the most to your cash flow and profitability. Remember, they’re not the same thing. Even if you’re making a profit, you can go broke if you run out of cash.

That’s why your stock turn (how often you turn over your stock every year) is so important. And of course, the higher it is the better. We’ll work it out for each product line, each department, and the overall business. You’ll love the clarity it gives you, and because it’s based on your data it’s completely objective.

Client:

Sounds great.

Advisor:

So, we have some mutual commitments to follow through on. You’re 100% committed to completing them by the agreed dates?

Client:

Yes, I am.

Advisor:

Good. So am I. It’s important. If we don’t stick to our commitments, your business won’t make progress on these fronts.

Anything else you want to talk about?

Client:

No. That’s plenty for us to focus on for the time being.

Advisor:

Okay. Let’s have a quick phone call next week. Same time? Shouldn’t take more than 15 minutes. Just to keep ourselves accountable and make sure we’re still on track. I’ll send you a calendar invitation now.

Great meeting with you today. Now let’s get on to those tasks and make it happen.

3. A training and mentoring system your advisory team

Now it’s time for us to all wake up and smell the coffee. Do you think providing a script and framework for running an accountability-based advisory meeting is enough to make your advisors competent (and eventually outstanding) at conducting these consultations?

Of course not. Handing an advisor a script, checklist or piece of software doesn’t make them an effective advisor. Those things are just tools. They don’t impart any skills.

And remember: there’s no point implementing an advisor training system if you don’t have the assertive and ‘people people’ advisors we talked about earlier.

But if you’ve got the first two points covered, then you need to:

  1. Appoint a senior advisor to drive your advisor training and mentoring system.
    • If they have a billings target, it needs to be adjusted for this non-chargeable time. And the firm should see it as an investment.
    • If you don’t have the right person in-house to drive this process, invest in a specialist consultant to drive and deliver a training and mentoring process for the firm.
  2. Schedule weekly group training sessions for role plays to practise delivering accountability-based client consultations.
  3. Consistently de-brief and mentor each advisor one-on-one after consultations to discuss what worked well and what needs improving in the consultation process.
  4. Track your key metrics on how many consultations are being delivered, both per advisor and across the firm.
  5. Continually review and refine steps 1-4.

Once you commit to investing in and implementing these steps—and being guided by advisory process specialists along the way—you’ll be delivering successful accountability-based consultations to your clients, climbing The Value Pyramid and being more valuable to your clients, right?

Nope. Well, not at first.

Why not? Because (and this is one of our mantras to accountants and advisors about their future-focused advisory services), “You never get to deliver what you never learn to sell”.

4. The ability to market and sell your higher-level advisory services.

In my view, this is the number one skill gap in the accounting profession worldwide. I’ve coined the phrase The Value-Add Chasm to describe the phenomenon where nine out of ten accountants say they want to provide value-add advisory services (services beyond basic bookkeeping, tax and compliance), yet only one in ten actually delivers these future-focused, value-add advisory services to a significant percentage of their client base.

It’s a crying shame. A wasted opportunity. And, if I may be so bold, a disgrace.

At the very least it’s a gaping wide skill deficit in the profession.

I firmly believe the accounting profession is the most under-performing profession in terms of the gap between:

  • The potential value (HELP) they could provide
  • The value (HELP) they actuallyprovide.

That statement may well put a few noses out of joint. So be it. I know it’s the truth, and I’ve got the benchmarking survey data to prove it.

So how can an accounting and business advisory firm cross The Value-Add Chasm?

The answer can be summed up in two words:

  1. Marketing
  2. Selling.

Firms that learn how to do both successfully cross the Value-Add Chasm because they know how to:

  1. Generate interest and demand in their value-add services (a.k.a. generate leads)
  2. Convert those leads into engagements (a.k.a. sell effectively).

But here’s the paradox: Marketing and selling are skills most accountants in public practice (i.e. in their own businesses) have never been trained in.

Many don’t even know what they don’t know. This is known as ‘unconscious incompetence’, although others might call it ‘being ignorant’.

And in these two skill areas, most accountants are just that. Not all, but most.

That’s is why we exist at PARADOX. To help progressive accountants cross The Value-Add Chasm, and be the heroes to their clients they always wanted to be.

Marketing has changed massively in the past five years, even for accountants. (Here’s our webinar on the ten latest trends in marketing for accountants.) And while the principles of influence and great communication haven’t changed much lately, new technology in the marketing automation, CRM and proposal creation spaces has changed the sales, proposal and engagement process a lot.

Getting and keeping accountants and advisors up-to-speed with the latest in marketing for accountants and professional selling processes is the core of what we do.

Are you willing to take the LEAD?

The first thing to decide is whether you want to be a LAG Advisor or a LEAD Advisor. (This is an important distinction you need to be aware of.) As an accountant you should be a leader to your business clients. You need to be a great ‘implementor’ in your own business—walking your talk, and being an inspiration to your clients. This means you need to be up to date with the latest in business, innovation and marketing.

And that’s exactly what our Modern Marketing ImpleMENTOR program and Modern Marketing Academy teaches, guides and supports you to become. Register here for our next webinar, and we’ll explain how we can help you transform from the dying world of LAG Advisors into the exciting, profitable and far more rewarding realm of the LEAD Advisor.

[1] The ‘operational whirlwind’ is a term coined by the authors of The 4 Disciplines of Execution, one of our must-read book recommendations to any business owner or person who needs to implement change and make projects happen.

(4) awesome folk have had something to say...

  • Christian Borkowski - Reply

    March 20, 2016 at 5:05 pm

    Excellent article MC – the right people (the most important factor), doing the right things within a framework that is rigid enough to produce scalability but flexible enough to deal with the unique circumstances of each client – throw in some accountability – and presto you have the makings of a scalable value added service. Love this article & the whole series!

    • MC Carter - Reply

      March 22, 2016 at 1:36 pm

      Thanks Christian! Glad you’ve enjoyed the series. Since I first shared The Value Pyramid model at one of our Marketing Masterclasses, a number of people have told me it’s become a central framework for them to design their business model around, to ensure their advisory business grows in a manageable, scalable way.

  • Drew Grosskreutz - Reply

    March 22, 2016 at 1:53 pm

    Accountability is one of the most valuable things we learnt when being mentored by the PARADOX team. We believe in it so much our entire business philosophy now revolves around it. You cannot scale and grow with old time-based billing thinking. A values based operation installing accountability both ways provides leverage. What we found was higher client engagement which turned into higher overall spend. I note: It was not the easy path. But it’s been very rewarding.

    • MC Carter - Reply

      March 22, 2016 at 4:15 pm

      Thanks for your comment Drew. It’s been great to guide and see your journey building Otium. You’ve certainly seen the frameworks to apply and then have applied them with discipline and rigour. And your business continues to grow through your focus and the inherent scalability you’ve designed into your business model. Keep it cranking!

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