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How KPIs Drive Advisory Conversations

Morgan Hines
Posted by Morgan Hines on Feb 5, 2024 8:49:00 AM

Advisory services streamline accounting processes. They keep the channels of communication open and enable effective decision-making. Firms become more profitable—especially if tying compensation to financial performance. 

Clients find your accounting services more valuable when you provide concrete numbers. This shows that you offer sound advice. They understand why you recommend certain financial decisions and actively participate in meaningful discussions about strategy. 

Tracking KPIs is the best way to demonstrate this value. 

It is important to show clients their financial situation and trajectory. It provides proof that they've chosen the right firm. Center your advisory conversations around them to achieve sustained success for everyone involved.

What Do Clients Expect from Advisory Services?

We've come a long way since accounting was mostly keeping the books, compilations, and tax planning. Even small business owners are recognizing they need a financial advisor to compete. 

Clients today expect to have numbers-driven advisory conversations, but more than that, they want you to show them why those numbers matter. 

This is where KPIs step in. You watch and compare them over time to correlate with company events and decisions. 

When you offer strategic guidance, you define and develop a client's business strategy. You can forecast a KPI's trajectory based on the factors you know influence that number. 

Tracking, analyzing, and discussing KPIs on each call is essential. It helps the client understand their financial position over time. They start to realize that operational efficiency directly affects every KPI, which in turn impacts their entire business. 

Moreover, client success accelerates when they can plan over a longer horizon. They invest capital to grow into the future with confidence in your accurate cash flow and revenue forecasts. 

How to Pull KPIs into Advisory Conversations 

Establish a Foundation 

Share with clients that "KPIs connect the dots between your decisions and financial performance". 

They feel they earned their success because they can see how smart decision-making made it possible. At the same time, they feel empowered to overcome challenges rather than be tossed around by factors out of their control. 

Conversations are improved when KPIs are the focus. They become more: 

  • Directed 
  • Concise 
  • Actionable 

Set KPI-Driven Goals

Let clients know that KPIs have to matter. They must be measurable and trustworthy indicators of financial success. 

Show them how related variables (decisions) impact that KPI. This will allow them to set reasonable goals for that KPI over time. 

Monitor and Analyze Performance

Clients should be aware that you will use KPIs to assess progress and find areas for improvement. This may lead to some tough conversations about things that aren't working. 

When you have an advisory call, revisit the goal versus KPI performance. The client will be able to focus and re-focus energy next quarter to improve struggling areas. They can scale what's working for them with confidence. 

Let's say revenues meet or exceed the goal, but cash flow falls short. It might be a good time to review the accounts receivable and accounts payable processes. 

For example, is your client sticking with manual billing processes? They could instead employ invoicing automation to make cash flow more reliable. Some might view this technology as an "expense. " Yet forecasting how it will impact the KPI makes one thing clear: This is an investment that pays back many times over. 

If revenues are low, then you might be asking other questions. Could more streamlined processes and technology speed up approval processes or enhance client support—leading to better customer experiences? 

Integrating Technology for KPI Tracking 

Business software enables streamlined accounting practices that elevate your client services. 

Technology is critical for consistently tracking KPIs. It provides an objective look at performance you and the client can trust. 

Business software can also provide an easily accessible log of information, notes, etc. for each client. This log is always up-to-date and is a valuable resource. 

Building Trust Through KPI Transparency 

Business technology fosters transparency in KPI reporting and analysis. It builds trust by empowering clients with a clear understanding of their financial health. They see how operational decisions impact the bottom line. 

With the right software, performance data becomes more reliable. You and the client collaborate to set up the software, which tracks all the data required for accurate performance representation. 

Use KPIs to Drive Advisory Conversations 

Accounting advisory services streamline processes, foster communication, and bolster decision-making, leading to increased firm profitability. Tracking concrete KPIs allows you to connect decision-making with outcomes and discuss them from period to period for better understanding. 

It validates your sound advice and strengthens client trust. 

Today, more than ever, clients expect numbers-driven advisory conversations substantiated by KPIs. They want to understand financial statements and why they matter, and they want to make informed decisions based on those numbers. 

KPI discussions reveal the operational inefficiency and opportunity. 

Integrate KPI tracking business software into your plan to record and communicate KPIs. Numbers are kept current and easy to access. They help identify issues and plan for the future. 

Through KPI-centered conversations, you help clients achieve sustained success. 


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Topics: Financial Advisory


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