What are accounting advisory services? Everything you need to know

Navigating complex financial matters is a major challenge for businesses. Without the right expertise, poor decisions can impact the financial health of an organization. This is why accounting advisory services are so valuable.                     

Advisory services go beyond day-to-day accounting and bookkeeping. They provide businesses with expert advice and guidance on financial planning, risk management, business strategy, and much more. 

In this guide, we’ll explore the ins and outs of accounting advisory services. We’ll look at key benefits, popular services, and how much they cost. 

What are accounting advisory services?

Accounting advisory services encompass a broad range of professional services designed to help businesses make better financial decisions. For example, businesses may engage an accounting firm because they: 

• Want to optimize their financial operations
• Need support with strategic decision-making
• Require guidance on tax planning or regulatory compliance
• Want to implement smarter accounting workflows or innovative technologies

By seeking professional advice, businesses can maximize financial opportunities while mitigating risks. They can also ensure that their financial approach adapts to the latest trends, best practices, and regulatory changes.

Key benefits of accounting advisory services

Where regular accounting services help businesses manage day-to-day financial tasks, accounting advisory services help them make smarter decisions, improve efficiency, or mitigate risks. In this section, we’ll look at the key benefits they bring. 

• Smarter decision-making. Accounting advisory services provide businesses with data-driven insights and expertise. Advisors help clients create budgets. They forecast future trends and develop long-term strategies that ensure stability and growth.
• Risk mitigation. The value of accounting advisory services isn’t just in what they help businesses gain, but also in what they help them avoid. With the right guidance, clients can sidestep hazards and ensure a sound financial footing going forward. 
• Enhanced compliance. Advisory services provide businesses with tailored advice on tax and business regulations. Clients can maximize growth and profit while staying in line with industry standards and laws.
• Improved efficiency. With expert guidance, businesses can optimize their financial processes. This reduces inefficiencies and enhances productivity in areas such as cash flow management, reporting, and automation.
• Powerful insights. Working with experienced accountants ensures businesses stay ahead of financial challenges. They can put processes in place to navigate trends and weather storms. They can also ensure that they are using the best technologies to drive accuracy and efficiency.

Together, these benefits can be the difference between financial success and failure. In many cases, businesses simply don’t have the expertise to make complex financial decisions in-house. They may have talented accountants who manage bookkeeping, payroll, and other crucial tasks. But advisory services in accounting are about the bigger-picture approach a business takes. As a result, they are in high demand. This is especially true in larger enterprises or fast-growing businesses.

Common accounting advisory services

So what exactly do accounting advisory services include? In this section, we’ll look at some of the most popular areas where clients seek expert advice: 

Financial planning and analysis

Businesses often seek expert guidance when it comes to developing sound financial strategies, creating budgets, and analyzing financial performance. With the right advice, businesses can make data-driven decisions that lead to long-term stability and prosperity.

Risk management

Advisory professionals help clients identify and mitigate financial risks. For example, an accountant may help a client to: 

• Navigate challenging economic conditions
• Improve internal systems and data management
• Develop broad risk management strategies

Tax planning and compliance

The tax landscape is complex and ever-changing. Businesses seek tax advisory services to optimize tax strategies, maximize deductions, and ensure compliance with the latest regulations. This not only improves a business’s bottom line but also reduces the risk of penalties and audits.

Business valuation

If a client is looking to engage in a major corporate transaction, they need to understand how much a business is worth. Accounting advisory experts can help by conducting detailed valuations based on assets, market conditions, and future earnings potential. 

Forensic accounting

Forensic accountants investigate financial irregularities, potential fraud, and legal disputes. They provide businesses and government bodies with expert analysis, which clients can use during litigation and financial investigations. Businesses facing financial disputes may even need advisory experts to provide expert testimony.

Mergers and acquisitions

Advisors can provide hands-on expertise during complex corporate transactions. Typical services include providing due diligence or guidance on financial structuring. This ensures smooth transitions while maximizing the value of mergers and acquisitions.

Restructuring and bankruptcy

When companies find themselves in financial distress, they may need external support to move forward. Advisory specialists can provide guidance on restructuring debts, improving cash flow, or navigating bankruptcy proceedings to regain financial stability.

Accounting advisory vs accounting consulting: what’s the difference?

The terms “accounting advisory” and “accounting consulting” are often used interchangeably. However, they refer to slightly different service offerings. While both involve external accounting guidance, they differ in terms of scope and client needs.

Accounting advisory involves ongoing financial guidance and strategic planning. An accounting advisor is closely involved in a client’s ongoing success. They help clients make smarter long-term decisions, optimize internal processes, and ensure regulatory compliance. As such, they will have a relatively deep knowledge of the client’s structure and operations. 

Accounting consulting, on the other hand, provides clients with short-term guidance on a project-by-project basis. For example, a consultant may come in to help with a one-off event, such as business restructuring or technology integration. This makes their work more reactive to present needs, whereas an advisor provides proactive advice with an eye on the future.

Essential skills for accounting advisory services

For accountants, advisory services represent an interesting opportunity to move away from day-to-day processes and take a bigger-picture approach. It also opens the doors to more specialist areas of accounting, as well as higher salaries and more varied work. 

So, what skills do you need to excel as an accounting advisory professional? Read on to find out.

Technical accounting knowledge 

Accounting advisors need strong foundational knowledge of industry standards and accounting principles. For example, you need to be able to apply GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) to different accounting scenarios. You also need a strong understanding of domestic and international tax regulations.

Analytical and problem-solving skills

Advisory work often involves complex situations with no single solution. Advisors use their broad knowledge and experience to find the best way forward. This often involves interpreting financial data. For example, advisors may analyze financial statements, cash flow trends, and operational data to identify inefficiencies and risks. 

Communication and client relationship management

Communication skills and a client-focused approach are now important in all areas of accounting. But this is particularly true in accounting advisory. Advisors often work closely with business owners, CFOs, and internal finance teams. Great advisors are able to:

• Explain complex financial concepts in simple terms
• Present insights clearly in reports and meetings
• Build trust and long-term relationships with clients 

Technology proficiency

Modern accounting relies heavily on cloud-based accounting software. Data analytics, automation, and AI tools are also playing an increasingly important role. As an advisor, you’ll be required to provide advice on how best to streamline operations using technology. This requires you to stay ahead of the latest tech trends, which are advancing at a rapid pace.

Strategic thinking and business acumen

Beyond technical know-how, advisors must understand business operations, industry trends, and financial strategies. This enables them to provide effective recommendations on how to save costs, scale operations, and align financial decisions with long-term business goals.

How much do accounting advisory services cost?

The cost of advisory in accounting depends on various factors. These include the experience of the advisor, the size of the firm, the complexity of the services, and your geographic location. Another key factor is the pricing model. For example, advisors may charge:

• Hourly rates. Some advisors charge per hour, with rates varying by experience and specialization.
• Fixed fees. Some have set prices for specific advisory services, such as financial planning or compliance reviews.
• Retainer agreements. For long-term support, monthly or annual fees known as retainers are a popular model.
• Value-based pricing. These fees are calculated based on the tangible impact a service has, such as cost savings or increased efficiency.

Here are some rough examples of what accounting advisory services might cost for different business sizes or service types: 

• Small businesses advisory — $150 to $500 per hour
• Mid-sized businesses — $5,000 to $15,000 per month
• Enterprise-level advisory — $20,000+ per month
• Project-based consulting — $5,000 to $50,000 per engagement

For a deep dive into accounting service pricing, check out this article.

The bottom line

Accounting advisory services help businesses navigate the complexities of finance and tax. Unlike regular accountants, advisors provide ongoing support on all manner of accounting-related matters. 

If you offer advisory accounting, you’ll know how important it is to stay organized. You’ll also understand the value of efficient workflows and smooth client communication. With a practice management platform like TaxDome, running a highly efficient and profitable tax advisory firm has never been easier. With TaxDome, you can: 

• Automate your accounting workflows
• Manage your team and tasks 
• Improve internal collaboration
• Provide an incredible client experience

And all without jumping between multiple different apps.