Reprinted with permission from Accounting Today.
Admit it. You’re good at what you do. Your clients trust your proven ability to help improve their businesses. Perhaps it’s time to take the step of enlarging your vision of yourself from accountant to consultant.
Most good CPAs intuitively move beyond tax returns and financial statements, offering insight and counsel. Successfully formalizing the process can make the difference in growing your practice, and in the satisfaction you get from your work.
What Is Consulting, Anyway?
It’s a familiar term, but what does it really mean? I view consulting as a value-added service that helps clients improve the nature and quality of their decision-making. Accounting-oriented consulting gives clients the ability to respond to issues and opportunities in a strategic way.
Consulting is fundamentally a proactive pursuit. As such, it differs from compliance-related duties that are based largely on assessing and responding to existing financial conditions. Consulting is about influencing the future.
Think “Value,” not “Time”
One obstacle for many CPAs is how to charge for consultation. They know how to bill hourly for the preparation of financial statements, audits and tax returns. But how do you bill for creating strategies and improving business conditions? How do you charge for an idea that may have come to you in a flash, but would never have come at all without years of experience?
Think about this: Your physician doesn’t charge less because he or she sees you for 10 minutes rather than 30, right? What matters is that the doctor solved your problem. The same applies here. Consulting is about identifying and communicating opportunity; problem-solving that may not fit easily into hourly billing.
I urge CPAs to package and price the advice they offer differently from how they charge for other services, for example on a project or retainer basis. One advantage is that this lends the work the significance it deserves, while moving you away from legal-style, minute-by-minute billing that doesn’t reflect the nature of the work.
What’s important is to make sure your clients understand the value of your offering. What may seem a relatively simple suggestion could significantly shortcut the amount of time a client has to spend on a matter. The value of days or even weeks of time? The value of better decision making? Considerable! The fact that you’ve seen many similar situations and can reliably predict the outcome is what your client is buying.
Consider a CPA whom I’ve helped make the transition to consultant. He was asked by a client to assist with succession planning. He responded as a consultant, not as an accountant, clearly identifying the scope and pricing of the project, apart from compliance work. He planned an engagement that included interviewing all affected individuals, developing a set of recommendations and implementing a strategic plan. Pricing was based upon a combination of value to the client and market conditions.
The result was a productive effort for which the consultant was well paid and the client was well served. The CPA also enhanced his reputation with his client, who subsequently sought him out for assistance with other kinds of business problems.
Move cautiously. Not every CPA can automatically transform into a business consultant, but the skills can be learned. Examine your own experience and the niche you occupy. Read more about consulting and talk with consultants you admire, creating methodologies, client value and related pricing. One of the best books out there to help you is Alan Weiss’ Million Dollar Consulting. You just might be ready to make the transition from an accountant who occasionally dispenses free advice, to a whole new level as a trusted business advisor.