Accounting Advisory Services: A Comprehensive Guide for CPAs

Key Takeaways:

• Accounting advisory services extend beyond traditional tax preparation to offer strategic financial guidance.
• Specialized areas can include estate planning and tax-efficient investment strategies.

If you’re a CPA who works with clients on more than just annual tax returns, you’re likely already providing accounting advisory services. This emerging discipline offers a wealth of opportunities for both clients and accounting firms, and focuses on providing strategic guidance and future-focused tax planning throughout the year.

In this comprehensive guide, we’ll explore the intricacies of accounting advisory services, dive into the many advisory services that accounting professionals can offer their clients, and discuss how to seamlessly integrate these services into the growth strategy of your accounting firm. We’ll also introduce you to Harness Tax’s accounting practice management platform, and how it, too, can be the catalyst for your accounting firm’s growth.

Table of Contents

1. What Are Accounting Advisory Services?
2. Signs and Steps: Transitioning to Advisory Services
3. Harness Tax: Your Partner in Growth

What Are Accounting Advisory Services?

Accounting advisory services are a suite of strategic planning offerings that extend beyond the realm of traditional tax return preparation and filing. These services encompass a range of complex accounting solutions designed to provide more than just professional advice; they offer actionable strategies tailored to each client’s unique personal or business goals.

While there may be some overlap, accounting advisory services should not be mistaken for traditional financial planning or for Client Accounting Services (CAS).

• Generally speaking, CAS accounting focuses more on compliance work and one-off needs, whereas advisory accounting goes into larger, more nuanced strategic decision-making.
• Financial planning might involve such services as evaluating investment opportunities, while a CPA with a focus on accounting advisory services would work with their client to understand the specific tax implications of any investments they might consider.

Here are some examples of accounting advisory services that may apply to your clients:

Services for Individuals

• Strategic Financial Planning: A CPA specializing in accounting advisory services can offer a comprehensive approach to long-term planning and personal financial goals. This includes in-depth insights into tax-efficient strategies for asset growth and diversification, detailed cash flow forecasting, budgeting, and leveraging financial data to make informed decisions.
• Estate Planning: Specialized advice on optimizing tax benefits through estate planning can include strategies for reducing estate taxes, setting up trusts, and optimizing asset distribution among heirs or other beneficiaries.
• Income Shifting and Education Saving Strategies: Expert advice on shifting income to lower tax brackets and setting up education savings accounts like a 529 Plan can offer tax advantages for future educational expenses.
• Investment Property Ownership: Guidance on the tax implications and financial benefits of owning rental property can include advice on property selection, financing options, and tax-efficient property management strategies.

Services for Businesses

• Small Business Advisory: Comprehensive guidance helps small businesses navigate the complexities of tax codes, ensuring they take advantage of all available credits and deductions. This can also include advice on business structure, operational efficiencies, cash flow forecasting, and long-term strategic planning.
• Business Entity Structure Planning: Comprehensive guidance helps small businesses navigate the complexities of tax codes, ensuring they take advantage of all available credits and deductions. This can also include advice on business structure, operational efficiencies, and long-term strategic planning.
• Risk Management: A thorough identification, assessment, and prioritization of financial risks can be provided, along with tailored strategies to mitigate these risks, which may include insurance solutions, investment strategies, or operational changes.
• Selling a Business: Guidance through the intricate process of selling a business includes a focus on tax-efficient strategies for asset liquidation, ownership transfer, and capital gains.

Signs and Steps: Transitioning to Advisory Services

Whether you’re considering offering new services to your accounting clients, or have already decided to expand into advisory services, there are both signs to look for and practical steps to take for a successful transition.

Signs You Should Consider Advisory Services

1. Client Demand: When your clients are increasingly seeking strategic financial advice beyond just tax preparation, it’s an unmistakable indicator that there’s a market demand for advisory services.
2. Industry Trends: Changes to tax laws and political leadership can make it challenging for clients to keep up.  If you find that your clients are frequently asking questions about these complexities, it’s a clear sign that there’s a market need for advisory services in your practice.
3. Skillset: If you find yourself already providing informal counsel on topics like risk management, tax optimization, or investment strategies, you’re well-positioned to formalize these advisory services.
4. Revenue Potential:  The ability to charge higher fees for advisory services compared to traditional accounting tasks presents a lucrative revenue stream that can significantly boost your firm’s bottom line. If you’re looking for ways to expand your firm, introducing new service offerings could be a logical first step.

Practical Steps to Implement Advisory Services

1. Conduct a Needs Assessment: To tailor your services to the actual needs of your client base, consider conducting surveys or one-on-one interviews. This will help you identify the specific advisory services that would be most beneficial.
2. Choose the Right Technology: Harness Tax offers a comprehensive practice management solution tailored for CPAs, offering you access to a modern suite of accounting software all in one place.
3. Train Your Team: The transition to advisory services may require coaching your team, or catching up on industry best practices.. Consider implementing formal training, or connecting with industry experts, like members of the Harness Tax Advisory Council.
4. Market Your Services: To attract new clients and inform existing ones about your expanded offerings, leverage sales and marketing strategies and consider joining lead-generation platforms such as Harness Tax.

Pricing Strategy for Accounting Advisory Services

Determining the right pricing strategy is crucial for the profitability of your new service line. While there are various models to consider, it’s essential to choose one that aligns with both your business goals and your clients’ needs. For a deeper dive into pricing models and revenue growth strategy, refer to our article on earnings potential in the tax industry.

Harness Tax: Your Partner in Growth

By combining the expertise of tax professionals with advanced technology and best-in-class support, Harness Tax creates a more flexible and insightful tax experience for both advisors and their clients. Here’s how:

• A Modern Software Suite: Harness Tax is a practice management platform that provides accountants access to leading accounting software solutions, including Bloomberg BNA and CCH Axcess from Wolters Kluwer. By having all your software in one place, you’ll reduce the need to manage multiple subscriptions, enabling you to focus on delivering your best work possible.
• In-House Support Team: Our administrative and operational support staff is there to assist you with tax return e-filing, client servicing needs, and other small details to help keep you moving.
• Community and Learning: Accountants who join Harness Tax become a part of an expert community of tax experts from around the country. From private discussion forums to weekly training sessions with industry leaders from the Harness Tax Advisory Council, you’ll have a platform for continuing education and networking, while maintaining your professional autonomy.
• Marketing and Sales Support: Joining Harness Tax also allows you access to marketing and sales support, helping you attract and retain the right clients for your firm. Our Harness Concierge matches you with new customers who register on our website, and helps drive conversations that close deals and build lasting professional relationships.

Accounting advisory services are not just an add-on but a necessity in today’s complex and evolving financial environment. With the right approach and tools, CPAs can elevate their practice, provide more value to their clients, and increase revenue.

Ready to take your tax advisory practice to the next level? Book a call with us today to learn how Harness Tax can be the catalyst for your firm’s growth.