How accountants can expand their consultancy services

It’s not just the big four firms that offer business consultancy services, smaller practices are getting in on the act, as a way to boost their business and better support clients.

For many smaller firms, a move into consulting is a natural progression: they already have a keen financial understanding of their clients’ operations and business, so are uniquely positioned to offer advice and help define strategy.

Cambridgeshire-based Day Accountants’ consultancy work, primarily focuses on existing clients who are growing their businesses, and may require help securing extra cash flow funding or negotiating terms on their expansion, says Director Julian Day.

“From our point of view we want to build on the relationships we have and not just do one-off work,” he explains.

This kind of work can encourage a more proactive approach to finding new work with existing clients, Day adds: “The way accountancy is going, the compliance work is more and more looking after itself. The consultancy side is always going to be something different: it’s a complete change in terms of what you can offer and that develops into longer-lasting relationships and less client turnover.”

Challenge the stereotype of the accountant

For clients, consultancy can bring a different set of skills into their business without the cost of a full-time employee, says Martin Mellor, founder of Mellor Financial Management, which works with SMEs.

For an accountant, it’s an opportunity to work in a way that’s not bound by the calendar and a chance to challenge the stereotypical view of what an accountant can do: “The minute you say accounting people have a perception of what that is and what that does. But it can be so much more than that image of the bean-counting accountant if a business has an open mind to what it can help them with.”

Have you been trained to look at the business as a whole?

If you’ve worked in industry or have AAT or CIMA qualifications you may be better placed to work in consultancy, suggests Kim Marlor, whose practice KMA Accountancy works with entrepreneurs and family-run businesses, as you’ve been trained to look at a business as a whole: “Consultancy needs a slightly different skill set. As a CIMA-trained accountant, for example, you are trained to look at all aspects of the business, ask the right questions and listen, and not fix the problem with just numbers.”

Marlor says it’s important to get your proposition right so clients know what to expect and how you can work with them: “Consultancy can suggest being parachuted in, giving ideas and then leaving. Where we’ve had the most success it’s been almost a coaching and mentoring relationship. We might do some initial fact-finding to understand what the issues are in the business and understand how they currently operate, and then work through certain different measures with them.”

What makes a good consultant?

A good consultant needs to be patient and be a great communicator, whether that’s remembering the personal investment an owner has in their business, says Day, or being able to deliver financial information in an easy-to-comprehend fashion.

“Business owners have lots of information in their brains already so distilling down the financial information into one or two key things is very important,” says Mellor.

“You’ve got to have an inquiring mind, be sociable, and listen and not judge. You’ve got to understand where the client’s coming from and be able to empathise which is why if someone has worked in industry and has a much broader accountancy training it helps,” adds Marlor, who says her industry experience has been beneficial when working on consultancy with small businesses.

Where to start the expansion

For small firms expanding into consulting, starting small and gaining good word of mouth is vital as is maintaining relationships with existing clients.

“Some of my other accounting clients might grow enough to need the consulting services. Just because you meet someone it doesn’t mean they have an instant need. It can take months or years of that relationship, but the more you are known in the local market, the better,” says Mellor.

Getting to know your clients and their future plans really well is also essential to building up this work, adds Day: “Speak to your clients, find out where they are going in the future and that will lead to conversations, maybe about cash flow or their expansion to a new unit. They then know they can then come to us for that consultancy rather than doing it all themselves.”

“Historically you could only really pick up figures a few months after the end of a client’s financial year; now, thanks to technology, you’ve got that access in terms of what they did with their sales yesterday.”

Communicate the worthiness of your services

It’s important to know and be able to communicate the value that your consultancy can bring to another business, says Mellor: “People are looking for the lowest-cost service so unless you can articulate the benefits to them it’s hard to sell them a day rate-type consultancy services, especially if all they really want is someone to prepare their year-end accounts. A bookkeeper is never going to cost as much.”

“You have to demonstrate the value they will get back from spending that money,” he says, adding that this often lies in taking on work that’s outside of the business owner’s skill set and freeing their time.

This is especially important when you are starting out, says Mellor, as it’s possible to give too much time and work away to try as you attempt to build up clients: “The way you treat people is effectively teaching them how to treat you, so if you don’t value your service enough why will they?”

Which other specialists might your client need?

A consultant needs to understand what particular problems you can help solve with your skills, but also when you need to bring in other specialists, adds Marlor: “A client might need a marketing or funding specialist, for example. You need to be able to know where they need that help because you can’t be an expert in everything.”

It’s important to keep your qualifications and professional development up-to-date too, she adds: “It’s a fast moving world and the value in the future will be in the knowledge and the implementation and not just the transactional side.”

Laura Oliver is a Freelance Journalist and Former Head of Social and Community at the Guardian.