Boost your accounting firm's profitability: Automate processes, offer advisory

For many accounting firms with a healthy and well-established tax compliance practice, the desire to grow into a larger, more impactful role for clients is a common ambition. The path forward in today's evolving landscape is clear: transitioning into the role of a trusted advisor by offering dedicated advisory services.

This isn't just a hypothetical business plan, like the one from the Underpants Gnomes. It's a strategy grounded in solid data. Industry analysis predicts that a staggering 78% of traditional finance processes are ripe for automation, which could lead to a reduction in revenue from compliance-based tasks.

However, this shift doesn't signal a downturn. Instead, it opens up a significant opportunity. As compliance work becomes automated, in-demand and highly profitable advisory services emerge as the new frontier for growth. The strategy is straightforward: automate compliance, introduce advisory services, and increase profitability.

The influence of automation and client expectations

The rapid evolution of accounting software, further accelerated by the new ways of working adopted during the pandemic, has set the stage for a major transformation. It is now more feasible than ever to automate routine compliance processes, which not only meets modern client expectations but also frees up valuable time for your staff.

This newfound time can be reinvested in more meaningful work, professional development, or achieving a better work-life balance, which is crucial for retaining top talent.

Any potential dip in revenue from automating compliance can be effectively offset by introducing advisory services. This move is not just profitable; it aligns with the core skills accountants are trained for, allowing them to provide higher-value strategic insights.

Ultimately, automation acts as a catalyst, enabling firms to elevate their service offerings from essential compliance to strategic, future-focused advice that clients are increasingly willing to pay for.

How automation reshapes firm operations

Embracing cloud-native tools supercharges how a firm serves its clients, elevating both success and confidence. The impact of this technological shift is most prominent in four key areas:

• Speed: Automation empowers teams to work faster and generate critical answers in less time, no matter which cycle is being closed. This efficiency translates directly into quicker turnarounds and more agile service delivery.
• Insights: By combining professional expertise with the deep insights produced through advanced analytics and crucial business benchmarks, firms can provide unparalleled strategic guidance.
• Confidence: True confidence comes from knowing that the right information is delivered at the right time. Modern tools ensure that all data is carefully managed and remains secure, building trust with clients.
• Collaboration: Top performers and new talent alike thrive when equipped with the latest tools. These technologies modernize firm operations and foster better collaboration, leading to on-time delivery with unmatched quality.

A real-world view on the impact of staff

The transition to automated, cloud-based systems has a profound effect on daily operations and staff morale. Kim Beauchamp, Director of Operations at Whittlesey, shared her experience with this shift.

One of the very nice things about using the portals… back in the day, we would send out a paper organizer, the client would fill out the paper organizer, would take all of their documents, would mail it into the office, and someone would scan it in. Now, if you ask a client for a document, the document can go up on their portal immediately and the client can see it and then staff can take it. That’s has been a great help, having that immediate transfer of information.

This move toward digital document management is a critical first step. Manually scanning and uploading documents, even to a portal, can still be a bottleneck. Tools like Zenceipt further streamline this by automatically connecting to a client's email inbox to detect and fetch accounting documents like invoices and receipts, eliminating the manual upload step entirely.

Beauchamp also highlighted the benefits for internal collaboration:

I often have someone call me on Teams and say, you know, I’m not quite sure what’s wrong with this document or I don’t understand what this says. I’m able to pop right in… and look at the document because it’s all online. I can help and I can get other people’s help and everybody can touch everything. So that’s been huge for us in cutting down the time between a client’s request and getting a response from staff.

This accessibility means the firm's administrative staff is now engaged in more meaningful work, a far cry from the old days of manually copying and mailing tax returns. They appreciate the shift to higher-value tasks, which boosts job satisfaction and overall efficiency.

Making the leap from compliance to advisory

What if the pressures of billing for traditional compliance services could be set aside to engage business clients on a completely different level?

While automation frees up staff to do more, a comprehensive strategy is needed to channel this new capacity toward driving firm-wide profitability and success.

This involves identifying the specific advisory services that your clients truly need and are willing to invest in. It also means implementing a value-based pricing model that reflects the strategic importance of this work, rather than billing by the hour.

Furthermore, a successful transition requires putting the right team members in place to handle both the routine day-to-day tasks and the more complex, consultative client engagements.

Opening the door to advisory conversations

Framing the advisory opportunity in a conversation with existing clients can feel awkward. With relationships often centered on compliance matters, there isn’t always a natural opening to present the benefits of having your firm serve as a trusted advisor.

A structured approach is needed to open the door to these deeper, consultative conversations and clearly define the scope of different services.

Louis DeLuca, CPA, MST and partner with Friedman & Huey Associates, notes how a clear framework helps redefine client relationships.

It draws the line as to what services will be provided within an engagement, everything else outside of scope becomes an advisory offering. It eases the transition into an advisory role with clients when you didn’t know how to start in the past. Advisory engagements often include what we normally did in the past, but we were not recognizing and pricing properly for those services.

By providing content, coaching, and concrete methods, practitioners can become more comfortable developing and maintaining these enhanced relationships. Instead of primarily looking back at compliance, the focus shifts to looking ahead with a focus on advisory, nurturing growth for both the client and the firm.