The Advisory Spectrum

Shane Lukas examines how you can transform your practice to offer a broader range of services than compliance alone.

As artificial intelligence and automation continue to reshape our profession, opportunities to expand the role of accountants beyond traditional compliance work are growing. But while many ;accountants already have the foundation for providing valuable advisory services, they don’t always recognise it.

The natural evolution of advisory services

Advisory services are a natural progression for accountants, building upon your existing expertise with numbers and financial analysis. And many practitioners are already delivering these services without realising it. This could be through explaining financial ratios, offering tax planning guidance or helping with cash flow forecasting. The key is to recognise how valuable these services are for your clients and to develop them intentionally, not just on an ad hoc basis.

Think about a typical conversation you have with a client; for example, discussing their gross profit margin. When you can explain why this might be decreasing and suggest strategies for improvement, you’re providing crucial business insights. This is advisory work in its most natural form, emerging from your daily interactions with clients.

Understanding the Advisory Spectrum

Delivering advisory services doesn’t mean you have to know everything. There is a spectrum of advisory services, ranging from basic compliance work to comprehensive business coaching. This spectrum covers seven distinct levels of engagement, each building upon the previous one.

1. Produce the numbers: At the foundation, you ensure compliance with legal obligations. This is where most accountants begin, providing accurate financial statements and tax returns.
2. Explain the numbers: Moving beyond mere production, you help clients to understand their financial position. This involves interpreting financial statements, explaining key ratios and enabling clients to make informed decisions based on their numbers.
3. Understanding goals: At this level, you become more proactive, regularly meeting clients to understand their aspirations and spot opportunities. This shifts your role from reactive reporting to active engagement in their business journey.
4. Define the measures: Here, you help clients to establish key performance indicators and metrics that matter to their specific goals. This enables them to track progress and gauge the effectiveness of their strategies in real time.
5. Identify improvements: Through detailed financial analysis and sensitivity testing, you pinpoint specific areas for optimisation and growth. This might involve analysing pricing strategies, cost structures or operational efficiencies.
6. Change the numbers: Actively participate in implementing business improvement strategies, exploring how to adapt proven approaches to the client’s specific situation and industry.
7. Deliver the dream: At the highest level, you become a regular accountability partner and business coach, ensuring clients stay on track towards their goals.

The beauty of this spectrum lies in its natural progression. You can begin at your current comfort level and gradually develop your services and confidence at each stage.

Connecting numbers to aspirations

What truly sets advisory services apart is the connection between financial data and clients’ personal and business aspirations. Once you’ve identified that a client wants to pay off their mortgage within ten years or send their children to university, you can translate financial metrics into meaningful personal goals. This transformation – from numbers on a page to life-changing outcomes – is the essence of valuable advisory work.

So, rather than simply noting that a business needs to increase its gross profit margin, you could demonstrate how increasing it by a specific amount will pay off that mortgage. This makes it much more meaningful for the client and much easier for them to grasp the value of your input.

Developing advisory capabilities

As a qualified accountant, you already have the skills for the foundation level of advisory. But many accountants doubt their abilities to deliver at a higher level. While I am certain that you know more than you think, I understand that it can be daunting to take that first step. So take it gradually and build on your existing skills. Key areas to look at include:

• deepen your ability to interpret financial data and identify improvement opportunities;
• understand how to explain complex financial concepts in terms that clients can understand and act upon;
• learn to connect financial metrics with broader business strategies and personal goals;
• and build expertise in your clients’ industries to provide more relevant and specific advice.

When you’re starting out with advisory services, you will get the best results when you adopt a systematic approach.

• Start with current clients: Begin by identifying advisory services that you are already providing and formalising them.
• Document your process: Create clear frameworks for different types of advisory services to ensure consistency.
• Focus on value: Structure (and price) your services around the outcomes clients want to achieve rather than the time spent.
• Measure and communicate results: Track the impact of your advice and share success stories with clients.

The future of advisory services

As technology continues to automate compliance work, advisory services will become increasingly crucial. The future belongs to accountants who combine technical efficiency with human insight, helping clients to navigate complex business challenges and achieve their goals.

This evolution doesn’t mean abandoning compliance work. Rather, it means using compliance as a foundation for deeper client relationships and more valuable services. When you delegate routine tasks to technology, you free up your time and energy – time and energy you can then pour into the strategic thinking and personal interaction that truly drives client success.

It’s important to understand where you currently sit on this spectrum so you can systematically develop your capabilities and progress. You will then be able to build a practice that delivers increasingly greater value to clients while giving you more professional satisfaction.

Remember that this journey doesn’t require a dramatic overnight change. Most accountants are already operating at levels one and two of the spectrum. The key is to take intentional steps to progress to the next level, expanding your offerings as your confidence and expertise grow. Understanding which aspects your clients value most will help you decide on the direction that works best for you.

As the profession evolves, those who embrace the advisory spectrum will find themselves well-positioned to thrive in an increasingly automated world. When you focus on the human elements of your work – understanding, insight and guidance – you will ensure your continued relevance and value in the years to come. I believe that every accountant has the potential to become a trusted advisor. The question isn’t whether you can provide advisory services – it’s how to develop and deliver them in a way that best serves your clients and your practice.

Look out for more insights from me in upcoming AIA publications and webinars. The focus will be on making this transition with confidence and presenting advisory solutions in ways that excite and engage your clients.

Author bio

Shane Lukas is Managing Director of AVN Inspiring Accountants, an acclaimed TEDx speaker and also the author of several books, Putting excellence into practice and What’s next for accountants.