The accounting industry is sitting on a gold mine. Are you digging?

There's one conversation I've had many times over the past year. I'm sitting with the leader of an accounting firm and I ask: "How important will advisory services become for you going forward?" The answer always comes quickly. Very important. Then I ask: "How much of your revenue comes from advisory today?" That's usually when it gets a bit quieter.

There's a paradox in the accounting industry right now: most people agree on where the industry is heading. More of the bookkeeping work is being automated, and clients expect more. Accountants should spend less time producing the numbers and more time helping clients understand them. We've talked about this for a long time, and yet advisory work is still a relatively small part of the business for many. When I ask why, the answer isn't that they don't believe in advisory services, it's that they're not quite sure how to make it happen.

I find that interesting, because we also meet plenty of clients who have figured something out.

Some have already started

They don't treat advisory work as something you do if the client happens to ask. They actively work out which clients have potential and set targets for advisory revenue. They train employees in client dialogue and use technology to cut the time spent on analysis and preparation. But maybe most important of all: they don't wait for the client to call.

They call the client.

That might sound like a small difference. It isn't. The moment an accountant moves from reacting to a client's needs to spotting the need before the client does, the entire value of the relationship changes.

The business market needs what accountants already have

This might be what I find most fascinating. When we talk to leaders of small and medium-sized businesses, the need for financial sparring is obvious: can they afford to hire, why are margins falling, what should they prioritize if things develop differently than budgeted. Many don't have a CFO, but they do have an accountant. And that accountant is already sitting on something incredibly valuable: the numbers, the history, the relationship, the trust.

That's why I believe the accounting industry is sitting on a gold mine. The question is whether it manages to dig.

Advisory work can be far bigger than most people think

One of the most interesting things we see when we start running the numbers together with accounting firms is the sheer size of the opportunity. Advisory work is often treated as a small add-on to the bookkeeping engagement, maybe 20, 30 or 50 percent extra. But when you actually look at client needs and what a firm can deliver once advisory is systematized, we sometimes see potential for advisory revenue to become as large as, or larger than, the bookkeeping revenue itself.

At that point we're no longer talking about a minor add-on service. We're talking about a new growth engine. And the interesting part is that the client is already there. You don't need to spend enormous sums finding a whole new market. The clients are already in the portfolio, wanting help and advice.

So why isn't it happening?

After many conversations with accounting firms, the answer comes down to three things: time, technology and system.

Time is the obvious one, because accountants already have full days. If advisory work means first pulling reports, analyzing numbers, finding deviations, building a presentation and preparing the meeting manually, the threshold becomes far too high. Advisory work becomes something you do when you find the time. And anyone who runs a business knows what happens to tasks that fall into that category.

Technology is next. If you have 200 clients, you can't start Monday by analyzing 200 sets of accounts to figure out who to talk to. The technology has to do the groundwork. It should help you see which clients need attention right now, why, and what you should talk to them about. That's exactly what we built alerts in Capassa to do: catch the deviations before the client does, so you know who to call today. That frees the accountant to spend time on what people are far better at, the actual conversation, the judgment and the advice. With the right technology, an accountant can do a far better job for far more clients.

System might be the most important of the three. Advisory work can't be something only the partner, or "the one who's really good with clients," can do. If this is going to become a significant part of the business model, more people need to be able to do it. It needs to be a way of working: What are we looking for? What questions do we ask? How do we go from a deviation in the numbers to a good conversation? How do we follow up? And how do we help employees grow confident in that role? It might sound difficult, but it's probably easier than many accountants think.

You already know the hardest part

I tend to say this when we work with accounting firms: you already know the hardest part. You know the chart of accounts. You understand what's behind the numbers, the difference between profit and liquidity, and what happens when receivables grow, margins fall or costs run away.

What you need to learn is really just a new dialect. Not just what the numbers show, but what does this mean for the client? Why is it happening, what might happen next, and, not least, what should the client do? That's advisory work. And seen that way, I think the leap from accountant to financial sparring partner is far smaller than many imagine.

The window won't stay open forever

This is where I think the industry should feel the pace of things. The business market's need doesn't disappear while accounting firms figure out how to organize their advisory services. Quite the opposite. AI is making financial analysis cheaper and more accessible. Banks want closer relationships with their business customers. CFO services are becoming available to ever smaller companies, and new tech companies are building solutions aimed directly at the business market. Everyone sees the same opportunity, and they all want to help business owners understand what's happening and what to do about it.

In my view, accountants have a better starting point than almost anyone else. You already have the client, access to the data, trust and the financial expertise. But a head start only has value while you use it.

The difference I see right now

When I meet accounting firms, I don't see a divide between those who believe in advisory work and those who don't. Almost everyone believes in it, so the divide runs somewhere else: between those who still talk about needing to do more advisory work, and those who have started building their business around it.

That's an important difference, because the ones who start now are learning which clients respond. They're learning which services clients are willing to pay for. Employees grow more confident in the advisory role and build good working methods. And clients start to see them as an important sparring partner and advisor. All of this creates a lead that gets harder to close the longer you wait.

The gold mine is already in your client portfolio

So I don't think the most important question for an accounting firm today is "should we invest more in advisory work?" Most people I meet have already answered that one. The interesting question is: "What do we need to do differently on Monday for advisory work to actually become part of our business?"

Because the opportunity isn't five years away, it's sitting in the client portfolio you already have. And while some are still discussing what the future of the accounting industry will look like, others have already started building it.

The question is no longer whether advisory work matters. The question is who gets there first.