Advisory Services: Pruning for Growth
•February 20, 2026
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Why It Matters
The transition safeguards revenue streams and positions firms as strategic partners rather than commodity service providers, reshaping the accounting industry’s value proposition.
Key Takeaways
- •Prune low‑margin clients to free capacity for advisory
- •Shift from hourly to flat‑fee advisory billing models
- •Build team‑based advisory structures for scalable service delivery
- •Leverage industry niche expertise to differentiate advisory offerings
- •Use analytics to allocate client revenue firm‑wide
Pulse Analysis
Automation is eroding traditional audit, tax, and bookkeeping tasks, forcing accounting firms to confront an existential dilemma. While AI can process data faster and cheaper, it cannot replace the strategic insight that advisors provide. Firms that recognize this inflection point are reorienting their business models toward high‑margin advisory work, where human judgment and client relationships create defensible value. This shift is not merely a service add‑on; it is a fundamental redefinition of the accountant’s role from data processor to trusted business coach.
The practical pathway to advisory growth begins with client pruning. By identifying low‑margin accounts that consume disproportionate resources, firms can reallocate staff to higher‑value engagements. Transitioning billing structures from hourly rates to flat‑fee or tiered packages aligns incentives and clarifies the value proposition for clients. Moreover, establishing a team‑based delivery model—where junior staff shadow senior advisors and handle routine interactions—enables scalability without over‑reliance on a single partner, fostering consistent service quality across the firm.
Strategically, firms that embed niche industry expertise and leverage data analytics to reassign revenue from individual partners to the firm will differentiate themselves in an increasingly competitive marketplace. As non‑CPA firms expand their advisory footprints, accounting firms must compete on insight, outcomes, and client experience rather than price alone. Embracing these practices positions firms to capture the growing demand for strategic guidance, ensuring long‑term relevance in a technology‑driven economy.
Advisory services: Pruning for growth
Pruning Clients: Transitioning Accounting Firms to Advisory
As rapidly developing technologies automate audit, bookkeeping and tax tasks — fundamentally changing the foundation of the profession — accountants need to transition their firms from compliance shops to advisory shops in order to not become obsolete. The key? Pruning clients.
If accountants really want to become “trusted advisors” and “partners to their clients’ success” (both common phrases in discussions surrounding advisory), that means going against some of their instincts.
“You've got to be very selective on the clients you take on, and you've got to eliminate clients that don't value the work you can deliver,” said Geni Whitehouse, founder of the consulting firm The Impactful Advisor.
It’s hard for accountants to turn clients away, Whitehouse explained, and it’s common for accountants to undervalue their own work. These conservative tendencies create friction around change, and whether they realize it or not, most firms are already doing advisory work. They’re just not charging for it.
“Every firm, small and large, has been doing advisory services since day one because our clients call us for everything — not just the tax work, not just the audit work, the reviews, the compilations. They call us for every single question they have,” said Jim Bourke, partner and managing director of the advisory services practice at Top 100 Firm Withum. “So without formalizing it, I've been doing it for 38 years.”
So with most firms already doing advisory work to some degree, the next step is codifying these processes and scaling them.
Three camps
Firms are all across the board in developing their advisory practices. Madeline Reeves, founder and CEO of the consulting agency Fearless Foundry, which hosted a series of nationwide conferences called Advisory Amplified last year, divides them into three camps.
First camp – “random acts of consulting.”
These firms may sell a compliance or bookkeeping service, but their clients come to them with questions and they answer them without a structured, priced advisory offering.
Second camp – “single‑person advisory.”
Advisory is centered around one partner or leader, limiting scalability to 10‑20 clients because it depends on that individual.
Third camp – “team‑based advisory.”
These firms use junior staff to shadow client conversations, tier services so not every interaction is at the partner level, and generally have a scalable, team‑oriented model. They are few and far between.
Pruning low‑value clients
The first step is pruning. Experts agree that to scale advisory practices, firms need to cut low‑value clients in exchange for high‑value clients that want advisory services. Low‑margin clients ultimately use more time and resources than high‑margin clients.
Hitendra Patil, CEO of Accountaneur Advisory, compared it to fitting a square peg into a round hole — advisory services just aren’t a good fit for every type of client.
“Everything else is secondary — billing, pricing — because ultimately, it is the client who sees the value in advisory,” he said. “If the client doesn’t see it as a fit and doesn’t need advisory … you’ve got to change your business model.”
Most firms concentrate expertise at the top, creating a knowledge gap that makes delegation and scaling difficult. Partners are often possessive of their clients because compensation is tied to the number of clients they bring in.
“In the current practice management system, it’s very difficult to track it,” said Deb Defer, director of CAS consulting at Woodard. “So you need to be using tools that can really extrapolate the data and slice and dice it multiple ways so that the partner still gets credit for it, but the revenue dollars fall in the correct department and it’s holistically the firm’s client — not the partner’s client.”
Defer identified another hurdle:
“The No. 1 enemy of efficiency, standardization and being scalable, is variation. If you continue to say yes to every single industry and not home in on four to six industries for a larger firm, no more than two to three for smaller firms, you’re not going to be able to scale.”
Perhaps the most discussed challenge is billing. Accounting firms are accustomed to hourly billing for audit and tax work, but an ideal advisory practice bills flat fees.
Reeves noted common billing pitfalls:
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Not charging at all.
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Not leaving room in the scope for advisory conversations.
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Structuring billing in a confusing way with tiers that jam unwanted services.
She added that while firms should move away from hourly billing, they still need flexibility for work that can’t be neatly packaged.
“That might be discovery work, or work that isn’t ongoing,” she said. “I think there was this real kind of emphasis to completely get rid of hourly billing without recognizing that there might be opportunities or areas where it’s still essential.”
Best practices
Firms looking to formalize and scale advisory can learn from larger firms.
Timothy Ball, partner and leader of the advisory and consulting service line at The Bonadio Group, recommends:
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Take inventory of non‑compliance requests from clients and move them into the advisory bucket.
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Strip partners of compliance duties so they can focus on business development, freeing them from busy‑season constraints.
Ball also highlighted that Bonadio hires specialists with industry credentials, even if they aren’t accountants.
Jim Bourke (Withum) suggests identifying advisory services and products clients currently buy elsewhere and offering them in‑house.
“It’s a big ocean out there, and the types of advisory services are endless. So no longer are we competing just with CPA firms. We’re competing with non‑CPA firms, and I do believe that gives us an advantage,” he said.
Firms should start with what they know, leveraging existing niche expertise rather than cold‑selling new services.
“There are things unique to every single firm that the firm has a specialty in — I don’t care whether it’s construction, technology, oil and gas, health care — that’s a great place to start with thinking about the ideal advisory services to offer to your clients because you know them already,” Bourke said. “Now it’s a matter of do I have the resources from a people perspective to do what I need to do?”
The need for advisory
Technology is the driving force behind the shift to advisory. AI and automation are removing rote compliance work, forcing accountants to focus on higher‑value advisory services.
“Advisory is a service where AI cannot replace accountants. What people don’t understand is AI works only on what data is already created,” said Patil. “It does not work on what is there in the minds of clients or business.”
Technology also levels the playing field:
“Most people will produce the same kinds of outputs from the same kinds of software. So how are you going to differentiate? That differentiation comes only through your client relationships,” Patil added. “Outcomes that you can influence are what are going to really differentiate you.”
Yet some accountants remain enamored with the tools themselves.
“I think that we’ve hidden behind automation — behind the tools on our desk,” Whitehouse said. “But what our clients need is an understanding of what they can do differently tomorrow, how they can improve their business outcomes and how they can motivate staff — all of those things.”
Whitehouse continued:
“We get so fascinated by what we can do on the back end and how we can make the most beautiful pivot table, and we forget that the only thing that matters is how that client can apply that information in what they’re trying to accomplish.”
Reeves warns that as compliance becomes automated, firms risk a “race to the bottom” on price and speed unless they prioritize advisory now.
“We’re going to move into a world where, if you’re going to sell the value of accounting, it has to be tied to your ability to deliver a true experience to that client, which is going to be your ability to take that information, make it meaningful, and help that client achieve their goals,” Reeves said. “Firms need to be thinking about themselves almost as a coach or a guide to their clients in the future, and that’s going to change the identity of who an accounting professional is.”
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