“How do you deliver $2,000 to $8,000 per month in value to your advisory clients?” Many CPA firm owners looking to get into high-level advisory services are looking for an answer to this question. Marcus and Rachel Dillon, hosts of the “Who’s Really the Boss” podcast, answered this question in a recent episode. In short, they take a carefully tailored approach that combines industry knowledge, relationship management, and adaptive communication.
The Art of Tailoring Client Advisory Services
Effective client advisory requires a structured yet flexible approach to client meetings. Marcus, who provides outsourced CFO services for several clients, outlines a framework that allows customization while covering crucial bases: connection time, priority investigation, financial analysis, strategy discussion, and action planning.
“Those five points give a structure to the meeting. Otherwise, the clients might direct the meeting the whole time and let you sprinkle in some words of wisdom,” Rachel explains, highlighting the importance of having a structure, especially with new clients.
The key to successful advisory meetings lies in thorough preparation. Marcus describes his process: “I have a Chrome browser pulled up just for the client. I’ve got three tabs open from the client’s QuickBooks Online file, so I’ve got their balance sheet through today, their P&L, and their AR aging because that’s usually a talking point.”
However, flexibility is equally crucial. As client relationships mature, the approach can become more fluid. Marcus might focus more on immediate concerns or recent financial changes for established clients while still touching on all key areas.
Case Study: Navigating Growth in a Marketing Agency
To demonstrate the power of tailored advisory services, Marcus and Rachel shared a case study of a marketing agency client with an annual revenue of $3-3.5 million. This client was considering acquiring a vendor to bring research capabilities in-house.
Marcus tailors his preparation for this client: “They use Google Sheets, while we use Excel.. So we’ve had to find that balance. He’ll keep his internal stuff and invite us into his Google Sheets for the projections.” It is important to consider disruption to firm workflows when determining if or when to go outside your standard tech stack based on an individual client’s needs.
The advisory meetings focus heavily on cash flow management and acquisition planning. Marcus notes, “We’ve seen pull back in that industry over the last year and a half to two years in response to the overall economy.” To address this, Marcus uses a combination of tools, including QuickBooks Online for historical data and a specialized cash flow tool for 90-day projections.
A key challenge is balancing the focus between core business operations and the potential acquisition. It’s easy for the owner to focus so intently on the acquisition that he neglects sales. But Marcus addresses this by emphasizing the importance of maintaining sales efforts and closely monitoring accounts receivable, even as the client explores growth opportunities.
Case Study: Managing Cash Flow in a Dental Practice
The Dillons’ second case study focuses on a dental practice with an annual revenue of $2.4-2.5 million. This client was experiencing cash flow concerns, presenting a different set of challenges than the marketing agency’s.
Marcus approaches this client’s situation with a deep understanding of the dental industry. He explains, “I looked at distributions and at the P&L. I know collections in his industry are a little bit soft since people aren’t doing some of the elective procedures. But production was about the same and collections were only down about $5,000 compared to last year.”
The advisory approach involves a careful balance of personal and business financial considerations. Marcus knew this client took significant distributions from the company to pay for a home remodel. Marcus notes, “Having that data, I was able to say, ‘Okay, you’ve pulled out $200,000, in distributions. Did all that go to that remodel project?’ Yeah. Pretty much.” By highlighting how personal financial decisions impact business cash flow, Marcus helps clients understand their financial situation.
Strategic advice for this client includes considering price increases, focusing on AR collections, and considering a membership program as an alternative to accepting traditional dental insurance, where reimbursements continue to go down for doctors and the cost to the insurer continues to increase.
Building Relationships Over Time
Marcus emphasizes the importance of building relationships with clients over time: “It takes about a year, probably a year and a half, to really get comfortable with a client, meeting on a quarterly basis. So I would say 4 to 6 meetings in, you get to know the other person on the other side of the screen and can anticipate their points of concerns.”
As relationships deepen, advisors can anticipate client needs, provide more nuanced advice, and adapt their communication style to best suit each client. For example, Marcus notes that with long-standing clients, he can often predict their concerns before a meeting, allowing for more targeted and efficient discussions.
Key Takeaways for Financial Advisors
So, what can accountants do to replicate Dillon Business Advisors’ success in having advisory-focused client conversations?
- Invest in industry-specific knowledge to provide contextual, relevant advice
- Build solid and lasting relationships with clients that go beyond numbers
- Develop a flexible advisory framework that can be tailored to each client’s needs
- Continuously adapt your approach as client relationships evolve
Listen to the full “Who’s Really the Boss” podcast episode featuring Marcus and Rachel Dillon for more practical tips for elevating your advisory services. You’ll hear firsthand accounts of client interactions, learn about specific tools and techniques for enhancing your advisory approach, and gain valuable perspectives on building a successful advisory practice. Whether you’re just starting to offer advisory services or looking to take your existing practice to the next level, this episode offers actionable insights you won’t want to miss.
Rachel and Marcus Dillon, CPA own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, is a community for accounting firms to get operational support in strategy, structure, and systems.