The Ambitious Bookkeeper Podcast

What is the deal with Advisory?

May 04, 2022 Season 1 Episode 47
The Ambitious Bookkeeper Podcast
What is the deal with Advisory?
Show Notes Transcript

In this solo episode, you’re going to be listening to a Facebook Live I did, covering:

  • What is Advisory?
  • 6 Services you could offer as advisory
  • How to handle charging for it
  • How to handle doing these for free
  • Where to learn how to perform some of these services

Make sure you follow me on Facebook so you catch the next livestream in this series and you can ask the questions YOU have!

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[00:00:29] Hello, thank you for tuning in today. I am Serena Shoup. I am the founder and face of the ambitious, bookkeeper. And Today I'm going to talk about what the deal is with advisory services. Hopefully I'm going to debunk some myths and get you guys a little more like connecting the dots between what you're doing now and what advisory is and yeah. 

[00:00:54] So first of all, we have to start here of like, what is advisory? Because there's a lot of talk in our industry for the past, honestly, since I started my business, like six years ago. There was a ton of people in our industry saying like, you have to get into advisory. You have to be. Don't I, bookkeeping is as a commodity, you have to do all these things for your clients. And the truth of the matter is like not everybody really understands what advisory is and what could be considered advisory, a lot of us are giving away stuff for free quote, unquote, we'll talk about this.

[00:01:32] You're already doing some advisory stuff and you don't realize. That was the position I was in. So today I'm going to talk first about what advisory is. So first of all, I believe anyway, that it, any type of service that goes above and beyond the basic compliance of bookkeeping that requires like background knowledge or an expertise in an area that can be considered advisory. So in a minute, we're going to go into certain services. Just to get your wheels turning. Obviously it can be whatever you make it honestly. So think, think about like, what are the basics that every client needs just as a baseline and anything above and beyond that could potentially be considered advisory.

[00:02:19] And when you talk about being an advisor to clients, one of the questions I had was how do you offer CFO services without making it seem like you're taking over the client's business? Well, that's the thing with advisory is you're just giving them advice. It's up to them to implement and. Take your advice or leave it. So I've never, I've never felt like the client feels like I'm trying to take over their business by just giving them a different perspective. So let's talk about what kind of services that you could offer and consider them advisory, but I hope that that gives you a little bit of clarity around what is advisory. 

[00:03:00] So let's talk about what services you could offer. Six examples of, of how you can start to get into advisory. And this is not all encompassing. There's a lots of different ways that you can become an advisor to your clients. I would say first and foremost, and I say this about any type of bookkeeping service, like focus on what you already know how to do. Don't try and jump in the deep end and offer something that, you know, you have no business offering that you're not comfortable or confident. Yeah. Because that will just discourage you, first of all. And second of all is not serving your clients to the highest. Good. 

[00:03:38] So number one: and I think this could be an easy route for some people. It could be very difficult for others. So again, trust yourself, advising on apps, software, and integrations. So, what I mean by this is you have to have a knowledge of your client's general business processes, like in their operations to be able to really effectively advise them on apps, software, and integrations.

[00:04:07] It's not just the accounting software piece of things. It could be like a PO soft. Does the client need something like that. And so anything that requires really to sit down and have a discussion with your client and get to know their pain points and what they need, what's their end goal. Then you can start offering them some advice around.

[00:04:31] Okay. Well, it sounds like you need more controls around your purchasing process. So I would recommend a purchase order software, and then you offer to research different options that integrate with your accounting software and integrate with other softwares that they're using in the business and kind of map out this whole infrastructure, right? So, something like that, it's definitely advisory. I have definitely given that away for free. So if you have to take heart, you're not alone. So number one, advising on apps. 

[00:05:02] Number two: advising on hiring budgets. Or just like helping them figure out if they should hire. So again, you're going to sit the client down and have a conversation. Talk about what their goals are. You're going to notice a common theme is understanding the client's goals. And what their end, the end game is. Right? So you need to be able to understand where they're headed, to be able to advise them on how to get there.

[00:05:30] And a lot of times clients want to grow. They, you know, they don't have any more time. They're strapped for time. They need to like duplicate themselves. So they need to hire. So you can help them figure out if they can afford to hire a and you can help them figure out what kind of positions should they hire for.

[00:05:49] I just had a conversation just the other day with one of my clients and it was just a regular monthly meeting, but this is why I bake these into my. And we're going to talk about this later too, is he was like, I feel like the worst client, cause I never get you what you need and blah, blah, blah, blah, blah.

[00:06:06] And I was like, well, what else is on your plate that we can shift into like an administrative position? That's like getting me paperwork is obviously not high on your list. So that's one thing we can handle this person. If you could hire an assistant, what's something else that you or someone else on your team is doing.

[00:06:25] And spending a lot of time on like the lower level type tasks that you feel are taking away from actually driving the business forward. And so one of those is usually bookkeeping, but also if you're working with a virtual bookkeeper, they eat some like local businesses. They need some boots on the ground to help get you that information. So sometimes it's a matter. Hey, could we hire you an office assistant to answer phones and field inquiries and make sure that the people that are booking calls with you are actually qualified for your services. We talked, I talked to him about setting up a kind of like I do with my clients on the front end, a questionnaire before they're able to book the sales call or the discovery call a questionnaire stating what their minimum price is. So you're not wasting time. They're not wasting time. If you're out of there. And some questions that will help guide the conversation and getting people to fill out a questionnaire is usually it's a time commitment. So you see how serious people are. 

[00:07:26] So simple little things like that are ways that we can advise our clients and kind of dip your toe into it, like, think about how you have implemented things in your own business. And how can you share that with your clients? 

[00:07:38] So I hope this is helpful so far. Number three: meeting with your clients to talk about numbers. So a second ago I talked about, I was meeting with my client on our monthly meeting. And and this is just a matter of like explaining what the reports mean to them because let's face it. Most of our clients, don't actually pull up the reports after we send them. So I like to one use those meetings as an opportunity to shore up any questions I still have on how to categorize things, but also then talk about what the numbers. 

[00:08:11] So we go over some key performance indicators or some KPIs that I talk about with all my clients. So like profit, gross profit, very in our minds, very simple KPIs, but things that every business owner should understand about their own numbers. 

[00:08:25] And then I open up the floor for them to ask me any questions. And that's how we got on that train of conversation with the one client about like him feeling. I, I really want to start removing myself. Like I'm definitely doing too much and I don't have time to do everything. So that's where the conversation went for most of our call, like talking about numbers was like five minutes of our call. And also you want to talk about the numbers in a way that they can relate to. 

[00:08:54] So that is one way that you can start to get into advisory number four: overseeing the client's bookkeeper. So if you're not the one handling the bookkeeping, or if you have the desire to not be doing so many bookkeeping engagements, but you have a pretty good process for making sure financials are clean and good to go, then that's something that you can offer other clients who might already have an in-house bookkeeper, someone handling AP and AR some basic general ledger stuff. But their balance sheet might be kind of a mess or they might need a little bit of support, like figuring out if they've paid all their payroll taxes and things like that. You can offer to act as like a controller. 

[00:09:38] So if you're in any of my courses, well, not any of them. Bookkeeping business accelerator. I go through a diagnostic review process, and that is essentially what I do for month end on all of my clients of going through the balance sheet account by account, making sure that everything makes sense that there's not like anything hung up on the balance sheet that shouldn't be there. And that's kind of like the checklist for making sure that financials are clean.

[00:10:07] So that's something that you can offer your clients. If they have a lower level bookkeeper, that's just. Doing the day-to-day stuff doesn't really understand debits and credits and that kind of stuff. You can be a controller in that role. 

[00:10:20] Number five: helping create a budget. So I'm sure this is one of the things that you think of when you think of like advisory services, I should be offering like budgeting and forecasting and that kind of stuff. Yes. You can offer that as advisory. That is another level or something that you could include in an advisory role package. 

[00:10:40] And one of the other questions I had was like, what software to use for this. So if you've never created a budget, I would start with your own books, just start there and using Excel, figure out a process for you to create your own budget. And then it will kind of like work out some kinks and that's something that you can then offer a client in the future. Other than Excel, obviously there's lots of other softwares out there. You could use Live Plan. You could use Fathom, Giraffe. Maybe Spotlight Reporting might have some budgeting stuff. I'm not quite sure there's lots of options out there. I, I feel if you are a beginner, when it comes to budgeting, live plan is a great place to start because it guides you. The software guides you through the entire process of creating a business plan. If you need one and a budget and forecast and all that stuff. If you are a beginner in budgeting, start with yourself, maybe use a tool like Life Plan Excel also has lots of templates you can work with. 

[00:11:36] And then number six: last one, obviously not the last of all the services you could offer in advisory, but creating a cashflow forecast. So it's a little different than budgeting because you're going to take your actual cash and what's actually happening in the books and forecast that out does require just like a budget requires conversation with the client. All of these require a conversation with the client except maybe overseeing the client's bookkeeper. Right. And even then you might then have to have a conversation on the back end.

[00:12:09] So you could forecast out the next month or two months or three months to see. If business was exactly the same for the next three months, how much cash would you have at the end of those three months? Or if the client knows that they're signing a contract or. I'm going to be hiring or something. You can bake that in, should show them what's the effect of that. So that ties into advising on hiring budgets. Like we talked about a minute ago. 

[00:12:36] All right, I'm going to pause here. I went through my six ways you can start advisory.  I just saw a question pop up. 

[00:12:42] Apple says my client wanted to know if she could afford to quit her full-time job. So I did a normalized P and L for the last quarter removed one-time expenses, such as website creation, copywriting, which I did for free.

[00:12:57] Is that advisory? Yes. Should I be charging for something like that? Perhaps it depends. So the standard accounting answer is it depends. I have certainly done things like this for free as a Goodwill gesture to clients because they are great clients. They refer me business. They are just good people.

[00:13:20] And I have the time you can absolutely do stuff like this for free. And I'm not going to sit here and tell you that like, I always charged for every little thing that I do for my clients. Cause that's, that's just not how relationships work. So I just want to be honest and upfront about that. Don't beat yourself up if you've been giving stuff away from for free. But yes, now that you've done that for somebody it's also like a good way to beta test something. If you've been in my world a while, you know that I love selling things before they're created and beta testing things, to make sure that I have like worked out the content and it makes sense to people. So this is a really good thing to do just to get your feet wet. Now that you've done it, you've not. Maybe you didn't earn money for it, but you've, you will earn a return on having created this process around something new in your business that you can now go forward and start selling or including in your services and charging a higher price in general for your services.

[00:14:25] So there you go. There's your answer. I hope that helped. 

[00:14:30] Rodica asks, how do you handle pricing for advisory? If if the need just comes up naturally one of the months? 

[00:14:37] If it's a one-off thing, I have absolutely done things for clients that are super one-off and I don't increase their price for it. And I don't nickel and dime them for it because. It just kind of evens out if it's something that you, that you do once. 

[00:14:51] And then they're like, I would love to have this same thing done over and over going forward. Then it's a conversation of like, let's increase your price, but I think doing something one-off for a client is a Goodwill gesture. And if you enjoy working with them, if you don't think that you're going to be resentful toward them after doing this for free, then it's a judgment call. Every client is different too. If you have the feeling that this client tests, boundaries and you, they might be wanting this going forward, you can also just say up for, hey like this isn't something that's normally included in my services. Is it something that you think you're going to want going forward? If so, let's have a discussion about a scope change and I can increase your price and you don't have to worry about this, you know, coming up ad hoc. It we'll just, I'll just bake it into the process every quarter or something like that.

[00:15:47] You have to judge how your clients are. And then it feels awkward to say, oh, I can help you, but it will be X, X percent money or X dollars. I agree. I'll just end up doing it for them, but probably bake it in my future monthly pricing. I've done that too. So kind of goes back to the question or the comment of it's like maybe the first time you're learning and so it's also going to take you longer than normal, and now you can come up with a process that's more duplicatable for future clients, and so you increase new clients that come on, you include it in the package and you feel better about not having to like, have a weird conversation with someone. 

[00:16:28] So Should we offer as a separate services or build it into our packages? The first time you do it, you might do it for free and then realize, wow, I'm offering a ton of value. I think I should either bake this into a package going forward, or if this is something I really enjoy doing, and I want to do this for every client, I know that every client in my industry or my niche is going to need this and value it.

[00:16:56] Even if they don't value it, if you know, they need it. And it's more of an advisory type service, you can just include it in your package. Like that's part of why. Include monthly meetings in all of our packages, because I feel like they're important. So kind of however you want to structure it there.

[00:17:16] Hopefully you've documented a few things and have kind of like an outline of a process going on for future clients. 

[00:17:24] So I'm going to leave it at that today. I, I give you a lot of information. If you are interested in learning more about advisory and, and getting the skills to offer it, like for budgeting and forecasting and having conversations with clients, strategic conversations. I am doing a one month summer sprint hands-on workshop. It's for four weeks and every week we're going to meet for two hours. At once. Right? I think I said 9:30 AM Pacific on Wednesdays for the month of July. So starting after the July 4th holiday, four weeks, 9:30 AM Pacific on Wednesdays. We'll meet for two hours. I will teach a lesson related to advisory, and then we were we'll work hands-on together. Working through the content.

[00:18:16] So what I'm asking of people who join is to bring one client file with them, that they can work on, like in parallel as I'm teaching. And then we can like work through things together, a client file that you're really familiar with. You're comfortable that the numbers are right. There's about a year, a six months to a year of history in that client in the bookkeeping that way I can help you. Hands-on learn how to budget and forecast. 

[00:18:40] I know there's a lot, there's other people you can learn from for sure. But I feel like this is a really great way to learn things. If you didn't get that experience in corporate of someone sitting by your side and training you on how to create a budget. I can offer that for you. 

[00:18:56] So that will be starting in July. You have until then to figure out if you want to join, I'll put it in the description and I hope to see you it'll be a very small cohort. You'll get access to the replay. So if you can't make it live, it works, but I feel like this is something you might want to show up live to and get like direct feedback.

[00:19:15] I will also be offering a group Voxer chat to answer questions in between the calls that we have. And then there's some other details that you'll want to check out the link for. So anyway, I will talk to you later. Bye.