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2023 Advisory Trends Report
In December 2023, we asked over 350 of our members a few questions to get insight into CFO/Advisory trends. Here's what we found...
The majority of our members (in The CFO Project Membership Program) still offer other services in their practice (bookkeeping and/or tax).
We've found that most accountants or bookkeepers who start a CFO/Advisory service will do one of three things:
One: They'll add their CFO/Advisory service to their existing list of services (tax or bookkeeping services) for clients to choose from.
Two: They'll transform their practice into an 'advisory-first' practice while upselling their clients to additional services (e.g., tax or bookkeeping).
Three: They'll stop providing tax/bookkeeping services and only focus on being a highly-sought after CFO/Advisor. (This is who makes up the 23% in the chart above).
We've found that most accountants or bookkeepers who start a CFO/Advisory service will do one of three things:
One: They'll add their CFO/Advisory service to their existing list of services (tax or bookkeeping services) for clients to choose from.
Two: They'll transform their practice into an 'advisory-first' practice while upselling their clients to additional services (e.g., tax or bookkeeping).
Three: They'll stop providing tax/bookkeeping services and only focus on being a highly-sought after CFO/Advisor. (This is who makes up the 23% in the chart above).
We asked our members what percentage of their firm's revenue in 2023 was made up of CFO/Advisory, Bookkeeping, Tax and Other.
What's interesting is that although most of our members are either bookkeepers, CPAs, accountants or Enrolled Agents, they have quickly diversified their income.
A whopping 30% of all revenue is coming from CFO/Advisory services.
What's interesting is that although most of our members are either bookkeepers, CPAs, accountants or Enrolled Agents, they have quickly diversified their income.
A whopping 30% of all revenue is coming from CFO/Advisory services.
The average member in The CFO Project is making $188,810 in top line revenue for 2023.
Our highest member is making $1,700,000 a year. Our lowest member is also one of our newest members; making $1,000 as they have just started their practice from scratch.
Our highest member is making $1,700,000 a year. Our lowest member is also one of our newest members; making $1,000 as they have just started their practice from scratch.
Here's how much each member is earning by service.
Members are earning almost $57,000 per year from just CFO/Advisory services and they're earning $74,000 from bookkeeping and $42,000 from tax.
Although bookkeeping is a higher number, the cost to provide bookkeeping is far greater than it is to provide CFO/Advisory services.
With the systems we teach, a CFO/Advisor can service one client in about 4 hours per month. And, as we'll see shortly the average client fee is around $2,000.
This means, if a member is earning $57,000 from advisory services, they are serving, on average, 2.4 clients per month. Thus working around 10 hours a month to earn $57,000 a year!
Members are earning almost $57,000 per year from just CFO/Advisory services and they're earning $74,000 from bookkeeping and $42,000 from tax.
Although bookkeeping is a higher number, the cost to provide bookkeeping is far greater than it is to provide CFO/Advisory services.
With the systems we teach, a CFO/Advisor can service one client in about 4 hours per month. And, as we'll see shortly the average client fee is around $2,000.
This means, if a member is earning $57,000 from advisory services, they are serving, on average, 2.4 clients per month. Thus working around 10 hours a month to earn $57,000 a year!
We asked our members what they anticipate their firms' total revenue to be in 2024 by service.
CFO/Advisory services leads the way with an increase of 26% points from 2023.
All other services (bookkeeping and tax) are down. Thus indicating that members want to put less focus on transactional or compliance work.
CFO/Advisory services leads the way with an increase of 26% points from 2023.
All other services (bookkeeping and tax) are down. Thus indicating that members want to put less focus on transactional or compliance work.
This chart was very surprising (in a good way).
The average CFO/Advisor is charging a little under $2,000 a month for their advisory services.
Also, when it comes to sales conversion - the average CFO/Advisor is able to sell their $2,000/mo service to 62% of the prospects that they've had a meeting with (we call it a "Right Fit Meeting" in our program).
Although we teach that one client can be serviced in about 4 hours per month, most members are spending about 7 hours per month per client. Either way, the effective hourly rate is $279 ($1,956 / 7 hours).
At the same time, the average client is being retained for 24 months! This allows the average CFO/Advisor to not have to constantly be looking for additional clients.
The average member reported that it only took about 5 months for them to get their first client. We've found that the first client is always the hardest and the next set of clients will come much easier and much quicker.
When it comes to marketing and selling business advisory services, we need to, first, understand why a business owner would want to hire a CFO/Advisor in the first place.
It seems that the number one reason a business owner hires their CFO/Advisor is because they want someone to talk to that cares followed by wanting a plan for growth.
You see, business owners really want one thing: someone they can trust to guide them on having a growing and successful business.
There's two key concepts:
1. They want someone they can trust
2. They want that person to guide them.
Business owners hire CFO/Advisors if there's an emotional connection. This is why it's so important to connect with prospects on a relational level long before you connect on a logical level.
In other words, we will not have much success selling business owners on a CFO/Advisory service if all we do is talk 'numbers'. Why? Because business owners are not numbers-focused.
We must connect on a relational level and establish an emotional connection. Then, and only then, will you be able to convert business owners to CFO/Advisory clients. (We'll show you how step-by-step in our Membership Program).
We asked where the majority of the CFO/Advisors in our membership program are finding new clients.
The trend presented in this chart tracks with our decades of experience running CFO/Advisory practices.
Most clients will come from referrals and word of mouth.
In second place, "associating" with business owners (the target client) in association-based groups and/or networking groups will be one of the quickest ways to get clients.
In third place are upselling existing bookkeeping and/or tax clients on a CFO/Advisory service.
Not surprising, in last place is online. Most business owners do not understand exactly what a 'CFO Service' is nor do they think they need a CFO. Because of that, it is incredibly difficult (and time consuming) to try to find clients through 'scalable marketing efforts'.
At the same time, we are not going for volume (like most internet and eCommerce companies are). We don't need hundreds of low paying clients - rather we need a handful of clients paying a lot of money. At $2,000 per client per month, you only need 10 clients to make $20,000 a month.
Plus, because you're only working with 10 clients, you're spending anywhere from 40 hours to 70 hours a month earning that $20,000.
This is what will allow you to have more of a work-life balance.
The average age of the members in our program is between 40-59 years old.
Most successful CFO/Advisors are those that have experience in either accounting or bookkeeping and would like to leverage their experience and skills in a way that provides more of an impact on their clients lives.
About half of the CFO/Advisors in our membership program service clients locally (in either their clients office or the client will come to their office).
The other half service clients nationally. They usually meet with their clients via a video conferencing software (e.g., Zoom).
From an efficiency standpoint, it's much easier to find clients remotely and service them remotely. You can provide a highly effective (and lucrative) CFO/Advisory service without ever having to leave your office or home office.
Plus, many business owners are more used to meeting remotely especially since COVID.
The other half service clients nationally. They usually meet with their clients via a video conferencing software (e.g., Zoom).
From an efficiency standpoint, it's much easier to find clients remotely and service them remotely. You can provide a highly effective (and lucrative) CFO/Advisory service without ever having to leave your office or home office.
Plus, many business owners are more used to meeting remotely especially since COVID.
We thought it would be interesting to find out what software our CFO/Advisors could not live without. We actually got a lot of answers, however, we've displayed the top nine here.
The top two, not surprisingly, are QuickBooks and Microsoft Excel.
The top two, not surprisingly, are QuickBooks and Microsoft Excel.
Finally, we asked how joining The CFO Project's Membership Program has impacted their business and career.
The top answer was "I'm more confident giving advice". This is huge. All business owners want from the financial professional in their lives is to guide them. To give them advice.
However, not that many accountants or bookkeepers actually give advice. And the ones that do don't charge enough for the advice (or at all!).
Why? We've found that it's because most accountants, CPAs, bookkeepers and Enrolled Agents are not confident in their ability to give advice to their clients - nor are they getting paid for that advice.
Yet...this is what most clients want! Most clients want the financial professional in their lives to guide them towards having a growing and successful business.
If you can do that (become more confident in giving advice to your clients), you'll have a much easier time building and scaling your practice through CFO/Advisory Services.
Notice that the second and third place responses were around the financial professional able to do more interesting work and being able to have more of an impact on their clients' lives.
Here's some of the candid responses some of our members gave us to this question:
"It gave me a boost to change my business from accounting focused to advisory focused and it gave me confidence to set aggressive growth and revenue targets." - Jeffrey D.
"I thought bookkeeping was my answer to self-employment and out of corporate, but finding The CFO Project opened up my eyes." - Kelly G.
"I have greater clarity around lead generation and sales." - Brian Z.
"I have confidence in growing my business much quicker (more clients, more income)." - Kodi B.
"You showed me how to use my talents and years of experience to build real wealth for my family rather than just pay the bills. I am on a mission to reach income levels I never dreamed possible. The CFO Project is changing my life." - Karen K.
"This has been life changing and continues to blow my mind every week." - Jeremy T.
"I have founded my practice from the ground up and have quit my job." - Raul S.
The top answer was "I'm more confident giving advice". This is huge. All business owners want from the financial professional in their lives is to guide them. To give them advice.
However, not that many accountants or bookkeepers actually give advice. And the ones that do don't charge enough for the advice (or at all!).
Why? We've found that it's because most accountants, CPAs, bookkeepers and Enrolled Agents are not confident in their ability to give advice to their clients - nor are they getting paid for that advice.
Yet...this is what most clients want! Most clients want the financial professional in their lives to guide them towards having a growing and successful business.
If you can do that (become more confident in giving advice to your clients), you'll have a much easier time building and scaling your practice through CFO/Advisory Services.
Notice that the second and third place responses were around the financial professional able to do more interesting work and being able to have more of an impact on their clients' lives.
Here's some of the candid responses some of our members gave us to this question:
"It gave me a boost to change my business from accounting focused to advisory focused and it gave me confidence to set aggressive growth and revenue targets." - Jeffrey D.
"I thought bookkeeping was my answer to self-employment and out of corporate, but finding The CFO Project opened up my eyes." - Kelly G.
"I have greater clarity around lead generation and sales." - Brian Z.
"I have confidence in growing my business much quicker (more clients, more income)." - Kodi B.
"You showed me how to use my talents and years of experience to build real wealth for my family rather than just pay the bills. I am on a mission to reach income levels I never dreamed possible. The CFO Project is changing my life." - Karen K.
"This has been life changing and continues to blow my mind every week." - Jeremy T.
"I have founded my practice from the ground up and have quit my job." - Raul S.
Looking Forward
The accounting and bookkeeping industry is in a state of flux. There's outside pressures coming from tech start-ups and AI as well as pressures from within the industry by automated accounting/tax/bookkeeping software.
All in all, accountants and bookkeepers, more than ever, are stuck in the Accountant's Trap. They are working too hard, for too little pay, dealing with high-demanding clients and working on ever-increasing commoditized and transactional work (thus, not being able to increase your fees).
The way to escape the trap is to offer something that your clients do want. That way, you can raise your fees while providing such a valuable service to your clients.
And, what do your clients want? They want someone they can trust (you) to guide them towards having a growing and successful business.
Because of this, we expect CFO/advisory services to continue to grow in 2024 and beyond, eventually becoming the primary revenue source for most firms in the near future. Bookkeeping and tax work will continue to be important for these firms, but with diminishing impact (and revenue).
As more jobs get automated, and competition from outside sources expands, the largest issue for both bookkeeping and tax providers will be finding a reliable source of revenue that is commensurate with the work.
The increased competition will only drive fees further down from their 2023 levels. While bookkeeping provided the majority of revenue (and occupied the majority of time spent working), we expect that revenue from bookkeeping is expected to fall in 2024.
Coming in to occupy the revenue stream (but not necessarily the time commitment) is CFO/Advisory services. As more business owners struggle to deal with hardships in the business, they will have to turn to someone who can help them. No matter how well coded, an AI will never be able to give practical actionable advice. But accountants, bookkeepers, CPAs and Enrolled Agents find themselves uniquely positioned to offer the advice business owners need because they’ve already established a relationship of trust.
In 2024 and beyond, accountants, bookkeepers, CPAs and Enrolled Agents must make moves to differentiate their firms from their competitors, but they must do it in a way that ensures they will avoid the pressures currently facing the accounting industry. CFO and advisory services are poised to revolutionize the way many firms do business, which will become the new trend in the accounting industry for the foreseeable future.
If you’re interested in getting help starting or adding a CFO/Advisory service to your practice, please find more resources below.
Adam Lean
Co-Founder, The CFO Project
For Accountants, CPAs, and Bookkeepers
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