Maintaining accurate, accounting records is a natural and necessary part of business finance.
But many businesses aren’t fully harnessing the potential of the information they’re recording and producing as financial statements.
For many, accounting is a matter of bookkeeping and tax compliance.
The most successful organizations, however, go a step further. They draw on accounting advisory services to draw strategic insights out of their financial records, enabling smarter decision-making and a stronger forward-facing view.
In this article, we’ll explore the world of advisory in accounting. We’ll explain what it is, what kinds of advisory services exist, and the benefits of contracting an accounting advisor.
What is advisory in accounting?
Advisory accounting goes far beyond simple bookkeeping and tax compliance.
It takes your financial records and analyzes them to extract forward-looking, strategic insights that help businesses make stronger, more informed decisions, strengthen operational practices, and achieve their long-term objectives.
Rather than simply recording history (the principal role of standard accounting), advisory services guide business owners through the challenges they’re facing and the opportunities that sit in front of them, giving leaders a clearer path to future growth and stability.
Key differences from traditional accounting
Advisory in accounting is not an alternative to traditional accounting per se. Instead, advisory services build on the information you already have, turning “What happened?” into “What should we do next?”
Here are the main differences between traditional accounting and advisory services.
- Focus on strategy, not just compliance: The main focus of traditional accounting is simply to ensure that records are accurate and that taxes are filed correctly. Advisory services, on the other hand, look ahead. They help leaders plan and make more informed choices.
- Proactive versus reactive: Accountants traditionally report on what has already happened. Advisors take that information and use it to anticipate risks, spot opportunities, and provide recommendations on what actions to take next.
- Scope: The scope of advisory in accounting expands beyond bookkeeping into areas like cash flow planning, technology adoption, succession planning, and performance optimization.
Importance for small and medium-sized businesses
Advisory services are often considered an enterprise-only luxury. But even for small and medium-sized businesses (SMBs), advisory support can be transformative.
These businesses often lack large in-house finance teams, meaning they’re often simply keeping accounting records from a compliance perspective. Many SMBs lack the expert guidance they need to navigate growth, funding, and compliance challenges.
Advisory services give SMBs access to expertise that helps them:
- Build stronger financial foundations
- Improve cash flow and budgeting practices
- Identify growth opportunities while managing risks
- Stay competitive in markets where resources are limited
Types of advisory services in accounting
Advisory services span several areas that go beyond compliance, helping businesses improve decision-making and long-term performance.
These are the five most common types of advisory services in accounting.
1. Financial advisory services
Financial advisory services focus on budgeting, forecasting, and monitoring key financial performance indicators.
In many cases, they also include cash flow management, which helps businesses anticipate shortfalls. Optimize the use of working capital and maintain liquidity.
Financial advisory services are best for startups and growing businesses that need clarity on cash flow and future planning, though established companies looking to improve financial discipline can also benefit.
2. Risk management and compliance advisory
Risk management and compliance advisories assess financial, operational, and regulatory risks, then recommend controls and policies that can help the company reduce exposure.
They can also guide businesses through evolving compliance requirements, helping them maintain freedom and avoid penalties.
Risk management and compliance advisory services are best for businesses in heavily regulated industries like healthcare, construction, and finance.
3. Performance improvement and operational advisory
Performance improvement and operational advisory services centre on efficiency and growth.
These services can relate to:
- Technology adoption
- Process automation
- Workflow improvements
- Strategies for expansions or succession planning
- Funding support
- Mergers and acquisitions
Performance improvement and operational advisory services are best for mid-sized companies aiming to scale, family businesses that are planning for succession, and organizations looking to streamline operations or prepare for large-scale investment.
4. Tax strategy and planning
Tax strategy and planning advisors develop strategies to optimize tax efficiency, reduce exposure by identifying credit or deduction opportunities, and align tax planning with broader business goals.
These services are best for businesses with complex tax obligations or growth plans, such as companies expanding into new markets or with complex corporate structures.
5. Industry-specific insights
Some advisory services are tailored to unique challenges within a sector. For example, construction businesses may need project-based cash flow planning, while healthcare organizations often focus on regulatory compliance and reimbursement models.
These accounting advisory services are best for companies operating in niche or highly specialized industries where generic financial advice may not help leaders reach their objectives.
Examples of accounting advisory services
Advisory support shows up in many practical ways that help businesses move beyond compliance and into strategy.
These are some of the most common services that accounting advisors provide:
- Cash flow forecasting: Advisors can provide projections that help businesses anticipate upcoming shortfalls, manage liquidity, and better plan for growth with more effective use of capital.
- Budget development and monitoring: Accounting advisors often build systems to create realistic budgets and track performance against them, ensuring all resources are used effectively.
- KPI tracking and metric report: Customer dashboards can give leadership much-needed visibility into financial and operational performance in real time.
- Technology implementation: Experts on the tech side of business finance can provide recommendations and setup of accounting software or automation tools that improve accuracy and overall efficiency.
- Mergers and acquisitions support: Businesses engaging in M&A activity can access guidance from advisors on due diligence, financial modeling, and integration planning.
- Success planning: Advisors can often build strategies for family businesses or private companies where estates need to be managed or where leadership transitions need to be executed.
- Tax efficiency reviews: Advisors can provide analyses that uncover credits, deductions, and planning opportunities to reduce liabilities.
Benefits of engaging in advisory services
Working with an advisor gives businesses both big and small more than just support with compliance.
It provides them with the strategic guidance they need to strengthen decision-making, improve efficiency, and build resilience for the long term.
Enhanced decision-making and strategic planning
Accounting advisors bring an outside perspective to the table, delivering data-driven analyses that help leaders manage uncertainty.
Instead of relying solely on historical reports, businesses get insightful, tailored recommendations based on both current performance and expected future trends.
This allows management teams to:
- Set clear priorities
- Align operations with long-term goals
- Make more informed strategic decisions
Increased efficiency and cost-effectiveness
Quality advisory services often go beyond statement analysis, with advisors reviewing workflows, identifying bottlenecks, and suggesting and introducing process improvements or new technology to implement.
By streamlining accounting and financial operations, businesses save time, reduce errors, and free up staff capacity.
Advisors can also highlight opportunities to cut down on unnecessary expenditure, which helps make operations more cost-effective while maintaining quality and control.
Access to expert insights and industry trends
You’re an expert in your industry, but advisors are immersed in the financial and regulatory environments that shape business performance, meaning they bring specific beneficial expertise to the table.
They can benchmark a company against industry peers, highlight emerging risks, and share best practices from similar businesses. This can give company leadership a stronger sense of where the business stands in the market, equipping them to respond quickly to competitive or regulatory shifts.
Improved cash flow control
Cash flow is one of the most common pain points for small and medium-sized businesses.
Advisors can support here by developing forecasting models, monitoring working capital, and building individualized strategies to maintain liquidity.
A proactive approach like this allows businesses to:
- Manage seasonal fluctuations
- Invest in growth at the right time
- Avoid the stress of unexpected shortfalls
Risk reduction
Financial, operational, and compliance risks can quickly escalate if not addressed early.
Advisors can support risk reduction by bringing a proactive lens. They can identify gaps in controls, put procedures in place for monitoring regulatory obligations, and even prepare contingency plans.
This helps businesses protect themselves against fines, reputational damage, or unexpected financial losses.
Stronger growth planning
Advisors work closely with business owners to design roadmaps for sustainable growth.
This can include activities such as:
- Financial modeling for expansions
- Succession planning for leadership transitions
- Preparation for mergers and acquisitions
How to determine if advisory services are right for your business
Not sure if advisory services are right for your business?
Here’s a quick guide to check if it's the right investment for you:
- Spot the signs your business may benefit: Look for recurring issues like inconsistent cash flow, frequent budget overruns, or a lack of visibility into performance.
- Evaluate your current accounting practices: Ask whether your existing systems and processes go beyond compliance. If your accounting is mostly backward-looking, advisory can help fill the gap.
- Identify specific areas for improvement: Pinpoint where you need the most support, such as cash flow forecasting, performance dashboards, tax strategy, or process efficiency.
- Assess your business goals: If growth, expansion, or greater operational stability are priorities, advisory services provide the structure and expertise to get there.
- Weigh the potential return on investment: Compare the likely benefits (better decision-making, efficiency gains, risk reduction) against the cost of engaging an advisor. If the outcomes align with your strategic priorities and outweigh the cost, advisory services are likely a good move.
BILL helps build the foundation for better advisory in accounting
Financial advisors can provide both enterprise organizations and growing SMBs with much-needed strategic analysis, turning their rear-view mirror statements into a forward-looking strategy.
But all of that starts with a strong foundation, where financial activity is recorded faithfully and in a timely manner.
BILL’s financial operations platform supports more effective financial advisory by:
- Connecting seamlessly with your accounting platforms
- Automating routine tasks like invoicing and payments
- Providing real-time forecasts and spend reports
