Cash flow advisory services present one of the top opportunities for firm revenue growth, according to a report by Xero. The same report shows that firms which offer advisory services in addition to compliance make 66% more revenue per client than their compliance only counterparts. Yet, while 52% of accounting firms say they want to offer advisory services, only 11% actually do.
So if firms that provide advisory services earn significantly more revenue than those that offer only compliance, why isn’t everyone doing it? Time, effort, complexity and confidence — these are some of the most common reasons firms shy away from advisory services.
But for those willing to step into the world of cash flow advisory, key revenue opportunities abound.
As well as unlocking new revenue for your firm, cash flow advisory services can truly add value to what you offer your clients.
At Float, we asked businesses what more they want from their accountants. 31% said they wanted more business advice, 30% said they wanted their accountant to be more proactive and 27% said they wanted their accountant to provide a cash flow forecast. We also asked business owners where they would focus if they were starting again today — unsurprisingly, cash flow, budgeting and business planning came out on top.
Clients don’t always understand the value of a cash flow forecast straight away, so be prepared to deal with initial objections. Even if you have identified an ideal client, they may be hesitant to pay extra for a service they don’t fully understand. Reframe how you talk about advisory with your clients — explain how a cash flow forecast can help you make important business decisions.
A good way to introduce the idea of a cash flow forecast is to ask your client what their plans are. Then you can work with them to create a forecast that maps out the steps they need to take to reach their goals.
Tailor your approach and match it to their needs — perhaps they are a small company now but looking to grow? Get the building blocks in place before you need them. Explain how a cash flow forecast can help them make better decisions around timing and budgets. Your client may have a small team just now but if they have plans to grow, they’re not going to be able to keep all of their business finances in their head for much longer.
Think of a cash flow forecast as a communication tool you can use to speak to your clients about their business finances. While technology is important, good old fashioned communication is indispensable. That’s why in Float we’ve created simple, visual reports you can share with your clients that are super easy for them to understand.
Presenting your clients with a visual representation of their cash flow can be a powerful way to add value to your professional relationship. Seeing the data laid out clearly before them will soon turn your clients into cash flow forecasting advocates - not to mention give your revenue a healthy boost.
Start by identifying the ideal client or clients for cash flow advisory services. These prospective clients include those who are:
Asking for cash flow forecasting services
Struggling to predict cash flow or are aware of an upcoming cash gap
Growing quickly or undergoing change
Once you’ve identified your ideal client, it’s time to roll out a pilot.
Meet a handful of clients and create cash flow forecasts that address their business pain points. Meet with them once a month over 3 months to discuss their progress and keep their progress on track. Then, at the end of the three month period, review how it went and what goals it helped them achieve. Getting dates in the diary is good to keep the ball rolling with your clients, but remember it can also help your own business be more balanced in the long run.
At Float we take great pride in supporting your learning journey and actively help accounting firms to educate their clients on the merits of cash flow forecasting. We have a library of accountant and bookkeeper resources on our website to help too, and a friendly partner success team always ready to talk at the end of the phone.
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