6 Ways to Unlock the Value of Advisory Services

Many CPA firms have recognized the growing demand for advisory services, yet they often struggle with properly valuing and pricing these offerings. The transition from traditional compliance work to advisory roles presents a significant opportunity for firms, but only if they approach it with the right mindset and strategy. The following six steps will set you on the right path:

1. Properly Price Advisory Services

One of the most common challenges CPA firms face is undervaluing their advisory services. Accountants often fear that charging too much will alienate clients. However, it’s important to remember that clients are paying for your expertise, not just the time spent on a project. A good rule of thumb is to price your services at 10% to 15% of the financial benefit your advice will bring the client. For example, if your work helps a client realize $100,000 in benefits, a fee of $10,000 to $15,000 is reasonable.

In cases where your billable hours exceed that percentage, you can adjust your pricing accordingly. The key is to ensure that your fees reflect the value you’re providing, not just the hours logged.

2. Turn Advisory Services into Recurring Revenue

Many CPAs see advisory work as one-time projects, but there’s often potential to turn these engagements into recurring revenue streams. For example, if a client asks for a margin analysis, don’t position it as a single deliverable. Instead, explain the value of conducting regular margin reviews to stay proactive about pricing and profitability.

The more frequently you provide advisory services, the greater the long-term benefit to both your firm and the client. This shift from one-off projects to ongoing support not only stabilizes your firm s revenue but also provides clients with continuous value, helping them avoid reactive financial decisions.

3. Avoid Common Pitfalls

One major pitfall CPA firms fall into is giving away too much for free. It’s easy to think that a small piece of advice isn’t worth charging for, but over time, this practice can diminish the perceived value of your services. Instead, always ensure that your advice is packaged as part of a service that reflects its true worth.

Another common mistake is underselling your expertise. What seems simple to you may be quite complex for your client. Even if the solution feels straightforward, don’t downplay the importance of your advice. Your clients rely on your knowledge to make informed decisions, and they are paying for the value that expertise provides.

4. Structure Client Agreements and Fees

To avoid confusion or dissatisfaction, it’s essential to clearly define the scope of your advisory services up front. Be specific about what’s included and outline any additional fees for services that fall outside of that scope. Many accountants are hesitant to charge for extra work as needs evolve, but clients will understand if you communicate transparently from the start.

It’s also helpful to set expectations around payment. Billing for advisory services at the start of the month, with payment due by mid-month, can prevent accounts receivable issues. This approach ensures that your firm s cash flow remains healthy and reduces the time spent chasing payments.

5. Provide Value with Preliminary Assessments

When transitioning clients into advisory services, offering a preliminary assessment can be an effective strategy. For clients you believe are worth your time, consider conducting a free or low-cost mini analysis of their financials. This allows you to identify their issues and demonstrate the potential value you can bring.

Once you have a solid understanding of their challenges and the financial upside your services could deliver, you can confidently present a proposal. This approach not only builds trust with the client but also gives you a clear baseline to price your services appropriately.

6. Exhibit Confidence

One of the biggest barriers to pricing advisory services appropriately is a lack of confidence. Many CPAs shy away from charging what they’re worth, fearing that clients will push back. However, when you provide clear, measurable value, clients will be willing to pay for it. Be assertive in communicating the financial upside you’re offering and reinforce the fact that your knowledge and expertise are what generate that value.

In summary, advisory services offer a significant opportunity for CPA firms to grow their practices and provide more value to clients. By pricing services based on the benefit to the client, turning one-time engagements into recurring work and confidently charging for your expertise, you can create a sustainable revenue stream and foster stronger client relationships.