Today’s CPA firms have the potential to grow their sources of revenue by expanding their service offerings—specifically by offering consulting advisory services in addition to their existing traditional, high-value accounting services. Today’s blog will explore the different ways in which CPA firms can seamlessly integrate advisory services into their portfolios. Our next blog will feature a case study showing you how one firm transformed its revenue model by leveraging the opportunities we discuss below.
Here are a few types of opportunities available to CPA firms looking to add advisory services to their offerings:
Growing revenue by bundling advisory consulting with traditional CPA services
Going beyond traditional audit, tax, and bookkeeping services offerings can result in significant opportunities to grow your business with new sources of revenue. This approach will also help you to further differentiate your company from other firms and to create ‘stickier’ client relationships. Because you’re already viewed as a trusted advisor by your clients, it’s likely that they are already coming to you with ad hoc requests for strategy and guidance. Monetizing these requests as an advisory services retainer can create additional value for both parties.
When you combine advisory services with your firm’s traditional audit and tax offerings, you’ll be able to create compelling service packages that meet more of your clients’ needs and differentiate your firm even further in today’s competitive market.
Optimizing consultants to expand your CPA firm’s service offerings
Your firm doesn’t need to “do” everything. By making strategic partnerships with consultants in your industry, you can broaden your services beyond the audit and tax services which have allowed you to build a trusted accounting firm. You can enhance your value even further by positioning your firm as a full-service advisory company that addresses a broad range of client needs. Examples of consultant partnerships could include areas such as HR consulting, global expansion, legal compliance and risk management, to name just a few.
Converting advisory services into recurring revenue streams
Adding advisory services to your portfolio is a great first step in growing your revenue. The real opportunity, however, lies in converting these services into a source of recurring and predictable revenue. In fact, there is a useful metric for this—the 50/50 model (half of your revenue is derived from traditional accounting services and half from advisory services). Fortunately, there are many ways to create these recurring income streams, ranging from developing subscription-based models and establishing long-term advisory relationships to providing in-person ongoing support to clients. All of these approaches will deliver consistent revenue to your firm, while deepening the good relationships that you have already established with your clients.
Increase your CPA firm’s valuation
At the end of the day, your CPA firm likely holds untapped value and potential. By creating a trusted accounting firm with a stellar reputation, you’ve already created a solid foundation. By creating an advisory arm to complement your accounting services, and by changing how customer agreements are structured, you can increase recurring revenue streams and significantly enhance the value of your firm.
HSP Group provides services to clients and independent members of the BDO Alliance USA, as part of its Vendor Marketing Program. As part of this program, HSP Group offers these growing businesses and professional services firms direct access to global expansion and consulting services. The BDO Alliance USA is a nationwide association of independently owned local and regional accounting, consulting and service firms with similar client service goals.
HSP specializes in helping companies expand internationally while managing compliance, payroll, HR, Employer of Record (EoR), entity setup, and more. HSP’s expertise will provide members with the tools to streamline operations and achieve their expansion goals.
