The Big Four accounting firms, Deloitte Touche Tohmatsu Limited (Deloitte), PricewaterhouseCoopers (PwC), Ernst & Young (EY), and Klynveld Peat Marwick Goerdeler (KPMG) are increasing revenue through their consulting services. These firms dominate the Canadian consulting market, with a 4.9 percent growth rate in 2017, and as of 2018, they accounted for $1.5 billion of a $3.9 billion market in U.S. dollars. Industry analysts expect continuing growth in accounting consultancy through 2020, and the industry tends to follow these industry leaders. So if you want to quickly expand your business beyond your basic accounting services, consider offering one or more accounting consultancy services.
Benefits of Offering Accounting Consultancy Services
Offering accounting consultancy, in addition to your basic accounting services, can generate additional revenue. But life as a consultant offers other benefits, including scheduling flexibility and assignment variety. You can also broaden the scope of industries you serve, build new client relationships, strengthen current ones and get out of the office more often.
Imagine that you’re providing business consulting services to a construction company to help them manage their project costs. To do so, you’ll want to review their books, records, budget, project plans and specifications. You need to meet with the general contractor, architect, project engineer, visit the construction site and observe first-hand how efficiently they’re spending money on project activities. All that work gets you out of the office and offers an alternative to spending sunny days crunching numbers in-house or handling your usual payroll accounting services.
How Do You Determine What Consulting Services Are Right for You?
To determine what consulting services you should offer, think about what clients need, what you’re good at and what you enjoy. If you can help a client or potential client solve a problem, operate more efficiently, save money or develop a new income stream, you’re on the way to achieve success in a consultant capacity. Start by thinking about common needs and questions that come up among your clientele; those particulars may be areas of consulting you could specialize in.
Your areas of expertise, interest and industry trends are good sources of information for your decision-making process, but don’t be afraid to think outside of the box. Expanding your accounting practice as a consultant can be your opportunity to move in an exciting new direction professionally and personally.
Ways to Grow Your Firm Fast as a Consultant
Depending on your interest, expertise and promotional skills, choosing one or more of these 19 different business consulting services can grow your practice or business quickly and profitably:
- Accounts payable analysis
- Federal and provincial taxes
- Business valuation
- Business strategy
- Outsourced CFO and controller services
- IT security
- Financial planning
- Internal controls consulting
- Human resources
- International tax
- Mergers and acquisitions (M&A) due diligence
- Start-up support
- Innovation management
- Financial forecasting
- Accounting system implementation
- Estate and succession planning
- Forensic accounting
- Litigation support
- Project management
If you’re thinking you need personal expertise in every area of your proposed consultancy, think again. Many accounting professionals that offer consulting services hire or contract with other professionals who have the expertise they lack. You might contract with a retired CPA who has a strong background in business valuation and strategy to help you offer those services as a consulting firm. Or perhaps, you decide to hire a dynamic young accountant with experience in start-up and innovation management to help you develop a consultancy in those areas. If you hire an expert to head your consulting practice, it’s a good idea to look for someone who has:
- Subject matter knowledge
- Entrepreneurial skills
- Business development skills
- Capacity to manage relationships with other individuals you might hire
If the candidate can generate leads, close deals and work with your other professionals to complete contract work, that helps position you for smooth delivery of your consultancy services.
You can also jump-start your accounting consultancy by farming your current client base. Say your practice offers basic accounting services and several of your clients are trial attorneys. If you’re interested in developing a consultancy that focuses on forensic accounting and litigation support, your trial attorney clients might be a good resource for starting your consultancy. They can provide you with a deep understanding of what attorneys need, connect you with other accounting professionals in that sector, and refer colleagues who may need your services.
What Should You Charge Your Consulting Services Clients?
It’s important to accurately calculate rates for your consulting services, and you need to decide whether to charge by the hour or offer a flat rate for service. As with other goods and services, setting a price too high can deter current and potential clients. However, not setting a high enough fee may leave you in the red, and send a message that you don’t value your own worth. When choosing between value pricing and fixed fee pricing, the latter is easier to implement. If you make accurate calculations of how much time it takes to complete a task, what your time is worth and your expenses, you can reap reasonable profits.
A simple way of determining your consulting fees is by applying what some people call the “rule of thirds,” or taking what you would make as an hourly wage and tripling it. Why triple? Because you’re allocating one third to your real wage as a consultant, one third to your expenses, and one third to your administrative costs, low utilization rate and bad debt. You can also reduce the likelihood of bad debt by requiring that clients pay a percentage of your fees up front and invoicing immediately after delivering your services.
Monetize Each Service You Offer
In addition to receiving payment directly for the consulting services you provide, you can monetize your services in other ways. Do you like writing? You might produce white papers on your consultancy topic and add them to your website, write guest blogs for other websites, or start your own blog on the issue. As your readership grows, you can solicit advertisers, create a subscription service, or use third-party services to generate additional revenue. Or you can write and self-publish a short book or e-book on your chosen consulting topic, and market it or use it as a promotional tool.
If you enjoy public speaking, consider setting up paid speaking engagements, or seeking opportunities to present on your topic at pre-organized group functions. Rotary and Civitan meeting organizers are always on the lookout for speakers and so are other business and professional organizations that host regular gatherings. Even if you don’t line up paid speaking engagements, the exposure you get at a variety of meetings generates opportunities for more business as a consultant, and you may be able to sell your book.
Making guest appearances on local radio talk shows, creating podcasts or starting a YouTube channel and posting videos are other low-cost ways of developing additional income streams as you build your accounting consultancy services business. And, as a personal bonus, you may discover talents you didn’t know you had.
Providing accounting consultancy services can give you another perspective on your career, generate more revenue, and help others improve their business operations. Collaborate with clients, stay on track and grow your firm with QuickBooks Online Accountant. Sign up for free.