A Simple, Scalable Method for Providing Consistent Financial Advisory Services

January 31, 2018 Bob Wang

Advisory Services

For some reason, when I look at financial statements, ideas just come to me. I naturally gravitate towards looking at trends, margins, and trying to analyze customer acquisition cost and customer lifetime value. Analyzing financial statements and providing advisory services to my clients is just something I’m passionate about.

As such, I want my bookkeeping firm, Legacy Advantage, to provide financial advisory services to our clients, but scaling our ability to do so has been a challenge. It turns out that training your team to provide the same level of analysis and consultation consistently across the board is a difficult task.

In November 2017, I went down to the Quickbooks Connect Conference in San Jose, CA, to see if the conference could provide the solutions I needed. Sandi Smith’s presentation on how to easily analyze return on investment (ROI) on clients’ marketing dollars was absolutely amazing.

The bottom line was fairly straightforward: most small businesses are concerned with increasing sales, so if you can help them grow their revenues, you’ll be valuable to them. What was impressive about her framework was its simplicity. It was an analysis and advisory service that I knew all of my associates could do. All that would be required was a little effort.

Here’s how it works.

1. Work backwards to create an action plan.

Start with your client’s sales targets for the coming year. Based on the prior year’s information, figure out the average revenue per customer.

[Next year’s sales target] / [Average sale per customer] = [# of total customers needed]
[Total # of customers needed] – [Customers that you have now] = [# of new customers needed next year]

After you do this analysis you can tell your client, “If you want to hit your sales goals next year, you need X new customers per month.” Then, ask what changes they have to make to get there. For example, they may need to allocate more time to networking, hire an additional salesperson, or spend more on advertising.

2. Help your client figure out who their ideal customers are.

This is another simple yet effective exercise. Look at all the year-to-date sales sorted by "Customer" in descending order. You can do this by going to the report section of your accounting software and then finding the “Sales by Customer Summary” report. Go to the customization tab of the report and sort by "Sales". Take the top 20% of all of their customers and add attributes, such as industry, age, demographic, etc. See if there are common threads in your client’s highest paying customers.

For example, you see that your client’s paying customers all own dogs, so they can create a marketing campaign that’s focused on dog owners. You can do the same for the bottom 20% as well. Maybe your client needs to avoid taking on clients who like cats (just sayin’).

3. Help your client assess their most effective marketing channels.

Most businesses have many lead sources, such as referrals (word of mouth), Facebook ads, Google ads, SEO, etc. Using the same customer list, add an attribute called “Lead Source.” In this column, add where the customer came from. You’ll probably need to get your client’s input on this. Then, sort by “Lead Source.” This will tell you where most of the leads are coming from.

To make a habit of tracking the source of your leads, you can add a field in your CRM that you have to fill out every time you add a lead. I personally use Podio, but other popular CRMs include Method, Salesforce and Zoho.

Even more powerful, you can combine steps 2 and 3. After you’ve filtered for the highest 20% of customers, you can then sort them by “Lead Source.” This will tell you which marketing channel is providing you with the best clients. Tell the client to double down on that marketing channel, and cut spending on the least effective channels.

Streamline your processes to provide advisory services

Turns out providing consistent, quality advisory services isn’t as hard as I thought, it’s just a matter of streamlining the process and focus. Moving forward, our goal will be to implement this ROI assessment as a standard advisory service for our clients and we’ll continue to build from there, looking for other analyses and frameworks that match this paradigm of simplicity and value.

Ask yourself: what information would be of most value to your clients, and what’s the easiest way for you to provide that?

Remember – if you can help them grow their revenue, you’ll be more valuable to them.

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About the Author

Bob Wang

Bob is owner and founder of Legacy Advantage. He obtained his CPA through working at the Private Client Services division at a Big Four accounting firm. Bob is passionate about empowering organizations through quality bookkeeping services.

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