Have You Hit This Common Stumbling Block Transitioning to Advisory Services?
While many accounting firms are attempting to offer advisory services, many still aren’t hitting the nail on the head, according to a business coach.
Speaking to Accountants Daily, Businest managing director Rhondalynn Korolak said that accountants are still failing to understand what it is that their clients want. “There’s a common misconception or mistake in the industry where everyone thinks that we have to give dashboards and KPIs to our small business clients. Many simply misinterpret the definition of what advisory services really is (or means).
However, it has statistically been proven that at least 87 per cent of our small business clients are financially illiterate,” she said.
“That’s a huge stumbling block that I think a lot of accountants have to come to grips with. If their clients are financially illiterate, they can’t read their financial statements, so it doesn’t matter how good the graphs look or how beautiful the dashboards and KPIs are. If someone can’t read their financial statements, they can’t read those either.”
Because of this misconception, Ms Korolak said one of the biggest issues plaguing the accounting industry at the moment is that firms aren’t delivering on their clients’ needs.
“The biggest mistake that I see accounting firms making, and even just sole practitioners, is they’re trying to sell fruit to their customers, when what the clients really crave is chocolate,” Ms Korolak said. They attempt to sell their advisory services instead of focusing on helping their clients cure the pain points that keep them up at night worrying.
“Accountants are perfectly poised, they’re perfectly positioned to actually help small businesses, but we can’t do it if we keep trying to teach people accounting. The small businesses owners don’t want to learn it. They want us to take all the accounting jargon out and give them a clear roadmap with step-by-step instructions of how they’re going to fix their problems.”
Ms Korolak believes this comes down to a skill gap created by universities still teaching outdated skills and a lack of training opportunities.
“Advisory services aren’t about dashboards and it isn’t about giving people reports and all that kind of stuff. It’s about two things: getting leverage on the client and getting them to take action,” she said.
“The skills that most advisors would need to be able to pull that off and do it well are in many ways the exact opposite of skills that we were trained in school.”
This article originally appeared in the Accountants Daily on May 1, 2017
Rhondalynn Korolak is the founder of businest and the co-founder of Make The SHIFT
3 Comments:
By Why Sell Fruit When What Your Advisory Clients Crave is Chocolate? - ImagineeringNowImagineeringNow 20 Nov 2017
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By Paul Dunn 04 Mar 2018
Rhondalynn is spot on.
And I love the fruit and chocolate analogy.
Since 1992 when we started talking about so-called ‘Advisory Services’ in the Accountants Boot Camp, the problem Rhondalynn refers to has remained for so many Accountants. And even though Ron Baker [ron@verasage.com] and I updated the skills and insights in the classic ‘Firm of the Future’ book (Wiley), the problem is still there for so many.
And there are, I suspect, 3 reasons:
The mindset and how they run their own businesses
The historical focus
The skillset
Specifically, to change the mindset we really need to get that Accountants really do change lives. And it’s not just their clients’ lives and the lives of the clients’ families or even the impact that has on the communities of which they’re a part. It’s their own lives (and those around them) too.
Once Accountants get that, as in really get it, they’ll no longer charge for time (or even care about it that much). They’ll focus wholely and solely on outcomes and on quantifying those outcomes directly to the client. And they’ll run their businesses using business models that are relevant to today. As David Rose (Gust CEO) recently observed ‘Any business set up for success in the 20th century is doomed to fail in the 21st.’
And together with that, they’ll realize that Accountants must not be historians. Instead of reporting on history they must help their selected clients create history. That’s precisely how they move from being dispensable, one-of-the-crowd to becoming indispensable – an advisor the client cannot live without.
Accountants must update the skillset too. We need to recognize that an accounting business is first and foremost a people business – a business that’s able to build strong and focused relationships with clients. And they do need systems and tools to help them do that too.
One of the best systems I’ve seen recently comes from Steve Pipe [steve@stevepipe.com] in the UK. It has the unlikely name of GAGAM – Get and Give a Million.
It equips the Accountant with the skillsets to actually add a million to clients’ bottom lines AND then Give a Million impacts by giving in an enormously effectively way to high-impact projects around the world. It embraces the UN’s Sustainable Development (Global) Goals too. Clients LOVE it.
And it changes lives.
That’s what it really is all about.
By Rhondalynn Korolak 06 Mar 2018
Thanks Paul. I will check out Steve’s work. Sounds like it might be similar to what we are doing with SHIFT? This new advisory training program is solely focused on the strategies and soft skill sets that accountants must master to succeed at advisory. I would love your feedback.
https://www.accountexnetwork.com/blog/2017/03/can-make-shift-trusted-advisor/
https://www.accountexnetwork.com/blog/2017/05/trusted-advisor-close-talent-gap/