Art of Accounting: Accountants' growing services

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Last week I wrote about finding out what your clients need and finding ways to provide it to them. I think that is a great strategy. However, I have another strategy, and that is to develop services you think clients would need and offer those. The following are some illustrations of services that have been successful this way, along with suggestions of added services you could impress upon your clients the importance of engaging you to perform those services for them. 

• Small business accounting software: When QuickBooks and its DOS predecessors were introduced, we approached our clients to adopt them with us, leading them into the use of such software. Today it is pretty much universal, but that wasn't so in the early 1980s when PCs were first made available. 
• Client accounting services: CAS services were always available through the smaller accounting firms, but about 10 years ago the larger firms started aggressively promoting these services. Many clients today are abandoning their inhouse bookkeepers for the CAS services provided by accounting firms. This has also grown into outsourced fractional advisory and CFO services. The clients did not come to us with this need; we went to them. This also includes payroll processing and other accounting functions that typically have been performed in-house, although payroll processing was way ahead of this trend.
• Business valuations services as benchmarks to measure growth in value: Clients always ask what we think their business is worth, and we usually reply with some vague comments. Developing a method to initially value the business and then updating it annually can be an effective way of easing clients into a value creation mindset rather than by them only looking at the annual profits or free cash flow. 
• Assisting clients with a buy-sell agreement: Many clients with multiple owners either do not have a buy-sell agreement or a current one. This is an important issue, and the absence of such an agreement could cause many problems and consternation if there is a death of one of the owners or a sudden disability. Outdated agreements also should be brought up to current and projected reality. This is a service where you could suggest being engaged to facilitate a series of meetings to have the clients get it done. 
• Internal control review: Clients do not lose sleep over taxes but do lose sleep wondering if they have proper controls in place. When an audit is performed, we have myriad checklists and processes to follow and then usually prepare a management letter with comments. Many times the current year's management letter repeats what was in the previous year's. A suggestion is to present an engagement proposal to assist in implementing some of the necessary changes. For your non-audit clients, you could use the audit programs and techniques to perform a full accounting control review of their business. These are clients you are familiar with, and it should not be too difficult to come up with a fixed fee. This could be segmented into two stages: an exploratory stage and an implementation stage. The exploratory stage would be similar to what you do on an audit and would include a memo similar to what is included in the management letter. The implementation could be left to the client. If they have no action on it for about six months, you could present your proposal for this implementation stage.
• Attorney trust accounts: These must be maintained carefully and exactly. A suggested service for lawyers is to do a "surprise" reconciliation of the bank account balances and the amounts held for clients, and then to assist in straightening out anything that isn't fully in order.
• An 11-year profit and loss trend analysis: The P&L analysis can be prepared to assist clients in their long-range planning. This would start with the previous five year's summary P&L, an annualization of the current year and then using the trends to project the next five years. You should include data such as the number of sales invoices, average sale per invoice, units sold, gross margins and percent of materials purchased to sales for each year, employee headcount and sales per full-time employee, sales from the top five or 10 customers and whatever other data clients use to manage their businesses. I usually start with a freebee of the 11-year P&L and tell clients what else should be done, the benefits to them and my charges. Freebees take time, but if this is an ongoing relationship I believe you should have this information at your fingertips. It is also a way to start a discussion about where the client thinks the business is headed and their efforts in that going forward. 
• Succession planning: This is something every business client needs, but most do not want to confront. This service not only helps a client prepare for their exit, but also provides the comfort that the business could continue operating in their absence and their governance documents are in order, that someone could step in to sign checks if they are not available for some reason, and that they could plan an extended vacation trip without worrying the business would collapse. This can also segue into how clients envision their personal future with or without the business, how strong some of their key personnel are in managing and leadership, and their relationships with customers, vendors and personnel.
• Assisting not-for-profit organizations in added services: CAS and audits are typical services  provided to NFP clients. However, they usually need many other services, including designing controls; reviewing procurement procedures, grant applications and compliance; managing cash flow; handling tax compliance for unrelated business activities; financial literacy training for board members; and assisting with onboarding a new CEO, CFO or controller.
• Retirement income and estate liquidity for older clients: These are a concern for clients contemplating retiring or those concerned about the disposition of their estates and liquidity for the surviving spouses and others that depend upon the client for their cash flow.

All of the above have been provided by me, and the clients were usually introduced to these services by me. Usually, the proposal was generated because of my concern for the client or because of an opening created by something the client said but wasn't able to fully articulate their concerns. The above is a small sampling, and there are many other situations where an independent CPA or financial advisor could assist clients. It requires listening, being receptive to tip-offs by the client, and actually proposing to assist in these areas. Waiting for the client to ask for such help could be like waiting for a train that already left the station.

The above suggests ways to grow your practice (and revenue), add interesting specialties, develop staff in a greater variety of services, and really help clients by the added value, personal financial security and wealth management provided by our assistance.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.