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Why compliance IS advisory

Dean Shepherd of TaxCalc explains why any debate about compliance versus advisory is meaningless –
what’s important is delivering a first-rate service to your clients

My inbox is once again starting to swell with invitations to a plethora of keynote speeches by illustrious industry commentators and social media influencers.

There is an all too familiar theme to some of these events – compliance is a commodity, advisory is the future – the knowledge and experience I have acquired over 20 years of helping small business owners with their tax and accounting woes seemingly no longer valued and anyone thinking otherwise is a relic of the profession, soon to be extinct, alongside their outdated business model.

Compliance inextricably linked with advisory work

This compliance to advisory message has been peddled for as long as I have been in the profession. Previous incarnations were touted as ‘value-added’ or ‘proactive’ services. I guess even snake-oil salesmen need a rebrand from time to time. Whether you call it advisory or value-add, the concept seems to completely miss something known by every hard-working accountant up and down the land, that compliance work is inextricably intertwined with advisory work. In fact, compliance is advisory.

The notion that you can somehow separate ‘advice’ from ‘compliance’ or that compliance services are not fundamentally about advising clients, is a concept that seems lost on those promoting a move away from compliance for their own self-interest.

In a recent survey of our customers, 84% agreed that compliance is, and will continue to be, the cornerstone of accountancy. However, 60% of those have concerns that their practice may become unsustainable if they do not offer additional services to their clients in future; and 69% of respondents say they do have an appetite for offering such services.

Separating compliance and advisory serves no purpose

Language is important and I do not find it helpful to talk about compliance and advisory as if they are mutually exclusive. In my practice, I had a range of services that I provided to my clients. Some may be considered compliance, others may be considered advisory, but to me and my clients, they were simply solutions to their problems. I would never categorise them into those two buckets as it serves no purpose.

When accountants tell me that they want to start offering advisory services, what they are really saying is that they want to do more for their clients, solve problems that will make a bigger difference to their lives, and build and grow a more profitable, inspiring practice that they can be passionate about. I am 100% supportive of that.

When all’s said and done, value and profitability matters

In my practice, we had a list of services that we were competent to deliver, either entirely in-house or via trusted third parties.

We mapped that list against all our clients to see who did or did not subscribe to each of those services. We called it our ‘windows of opportunity’ and used it to identify clients that we could solve problems for but who did not yet engage us to do so. We would always try to identify new ways of helping our clients so that we could add to our list of services and increase our windows of opportunity. Some of those were compliance services, some were advisory. Providing they helped our clients and were profitable for us, we didn’t care. Neither should you.

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