A funny thing happened to accountants when the U.S. Small Business Administration launched the Paycheck Protection Program. There, amid the chaos of the early days of the COVID-19 pandemic, with many of us still juggling the transition to remote work and all of us worried about the uncertainty ahead, accountants suddenly found themselves in a position to offer a much-needed sense of security to their small-business clients. Sitting at the center of the financial information required for PPP applications, able to explain how subsequent loan forgiveness terms would work and well-positioned to help complete detailed applications, accountants quickly emerged as the steady hand we all needed in an otherwise fraught business environment.

For many, the experience has cemented their roles as trusted business advisors, creating new opportunities to grow their businesses beyond basic tax accounting functions and develop important new revenue streams. A recent Thomson Reuters survey found that 95% of accountants said their clients are now seeking business advice from their tax professionals.

One accountant who recently expanded their advisory practice is Stephen Morris in Los Angeles, who has seen his revenue increase by more than $200,000. “Expanding into advisory has been a mutually beneficial relationship for us,” said Morris. “Our clients receive personalized financial advice while we obtain predictable, recurring revenue.”

Earning the role of trusted advisor

It makes sense. Tax professionals occupy a unique space for their small business clients. Unlike financial advisors, who tend to focus on investments, or business consultants, who tend to focus on strategy and process, accountants are privy to the most intimate details of the inner financial workings of their clients’ businesses and often form close working relationships with business owners. They’re also highly trusted. Consistently ranked among the top 10 most trusted professions — right up there with nurses and firefighters — CPAs have a reputation for shooting straight with their clients.

While that mix should create the perfect formula for building out an advisory business, not all tax pros have made that transition. The key to leaping from a transactional business rooted in the seasonality of tax filing to a year-round advisory business rooted in trusted counsel is building a business model that supports the transition.

In our work with small-business accounting firms worldwide, we’ve found that most firms pivoted to advice during the pandemic, but only some of them got paid for it. The difference between the two is having the right contract in place and the confidence to introduce the idea. Those who had contracted, retainer-style agreements in place with their clients were in prime position to engage in an advisory relationship, providing the necessary data and guidance on the PPP application, coaching clients through the best approaches to scaling down and scaling up throughout the volatile period, and filing for loan forgiveness. Those who had more transactional, quarterly filing-driven agreements with clients also ended up providing advice because it was the right thing to do, but they didn’t get paid for it.

Building a new business model

If there’s one thing every business professional learned over the past year, it is that the legacy structures of traditional business — from the lunch meeting to the office building — are not set in stone. That extends to underlying business models that can evolve and be adapted to suit changing demand and improved service offerings.

But before any of that can happen, tax pros need to find the confidence to see themselves as something more than tax preparers. According to our survey, even though 95% of tax professionals say their clients seek business advice, 59% say they are highly confident offering that advice. Moreover, among those who lacked confidence, female tax pros represented a disproportionate majority.

Many of the major business trends that have been unfolding for the last several years — many of which were amplified by the pandemic — have their roots in tax and accounting. The increased use of government incentives and relief packages, the introduction of more complex local tax and tax nexus reporting requirements, and changes in consumer behavior can have a major impact on small businesses. And no one understands them better, both from a compliance perspective and an anticipatory perspective, than a professional accountant. Thus, accounting firms should be in the pole position among trusted small-business advisors. Many are proving it’s possible to do just that by taking a more proactive role in their client relationships and putting the right structures in place to turn good advice into good business.

Along the way, these pioneers are helping transform accounting from a transactional business rooted in quarterly compliance deadlines to one that is strategically aligned with the growth of its clients.