The accounting bodies, and even the ATO, are suggesting to accountants that they need to introduce business advisory as part of their service offering.
When I ask accountants how they feel about introducing advisory services to their practice they are somewhat hesitant. There was one accountant who told me that every time he talks to his clients about offering something more than just compliance service, they do not react in a positive way. He went on to say that his clients see him as the accountant, the numbers guy, the tax guy. And this accountant concluded that he would not be able to convince his clients to engage him for advisory services.
I remember back to 1997 when I introduced business planning/ consulting services to my clients and I do recall seeing some resistance. Mainly resistance to change. Small business owners don’t often like change. In fact they fear change to a certain degree.
Back in 1997 we had to explain what business planning was to our clients and how it works. Back then it was only the big six accounting firms that were offering consulting services to their clients. The smaller practices did not have the capacity or human resources to offer these services.
So I started looking back at the history of the accounting profession. Way back in the 1950’s and early 1960’s accountants did not prepare income tax returns. They considered that tax returns were covered by taxation law and as such should be dealt with by a solicitor. And what about in the 1970’s. It wasn’t until 1979 that accountants were allowed to advertise. And remember in the 1980’s? Accountants started offering financial planning advice through organisations such as Count Wealth Accountants. The accounting bodies were reluctant to allow their members to offer financial planning services to their clients as they deemed that it was unethical for accountants to receive commissions. There are now a large number of accounting firms that offer financial planning.
And then we came to the 1990’s. In Australia we had the recession (that we had to have) and small business owners were going out of business in droves. This led to a number of smaller accounting firms looking to help their clients with business planning. Partnering with their business owner clients to help them grow their business. There were organisations like Results Accountants Network that helped the smaller accounting firms to deliver business planning services to their clients.
So, here we are in 2016 and accountants are faced with yet another challenge. The Australian Taxation Office has announced that by 2020 they will have enough information to be in a position to prepare accounts and income tax returns for small business. And now the accounting bodies are advising their members to offer advisory services to their clients to make up for the decrease in revenue from compliance work anticipated for 2020.
Everyone is telling accountants that they should be offering advisory services to their clients…but unfortunately no-one is showing them how!!