Advisory services are transformative to your practice and to your clients’ business. With cloud tools, professionals can develop new, high-revenue channels in their practice.
According to the IFAC Global SMP Survey 2018, 86% of firms globally are providing some form of advisory service. What does that look like for your practice to get started?
There is a variety of types of advisory services, however one of the most requested, and easiest from which to drive action is cash flow management and forecasting.
Clients badly need this service, however when time is limited and barriers are high, cash flow forecasting is the first task to be de-prioritized during the engagement. However, current cloud-enabled tools that harness Xero data to make flexible and powerful cash flow management highly efficient and effective.
Identify clients with highly volatile cash flows and gross annual revenue of 1M+. Additionally, you’ll want to find:
- A well-reconciled set of client data (thanks Xero!)
- Tools and metrics that your clients easily understand
- Your professional interest in client growth and strategy
- A gap in client business where clients see the value in strategy
- Client understanding that better managing cash flow means better managing crisis recovery, risk avoidance, measurement, growth planning, taxes and savings
Cash flow advisory services using a clients’ Xero data are so well positioned that we see accounting practices boom into advisory. No wonder: 30% of businesses fail due to poor cash management and 70% of those businesses were profitable when they closed their doors. Cash flow management is critical to business success.
It’s easy for an accountant to default to static reporting on cash flow rather than active cash flow management and forecasting. Be sure to focus on real-time data and use historical reporting as little as possible in order to avoid ‘Same As Last Year’ Syndrome. Business clients see more value in looking forward.
Next steps for implementation
Pull data into a collaborative platform that increases visibility of client accounts receivable and payable on a timeline that helps pinpoint potential shortfalls. Standard reporting fails to show your clients where they’re at risk or how they can strategize to smooth out cash flow volatility or liquidity squeezes.
Advisory is transformative
Advisory transcends the transactional. It builds fulfilling relationships that are highly valued for everyone. It’s exhilarating and it’s also in desperate demand by your business clients who face increasingly tight margins and aggressive competition on a global scale.