How The Subscription Model Can Transform Your Firm via FP&A Advisory

Are you looking for a way to earn more predictable revenue, have happier clients, and grow as an advisory firm?

What if I told you that moving to a subscription model focusing on FP&A advisory could achieve all of that and more?

Subscription models are periodic, recurring payments for frictionless, recurring, and ever-increasing value.

Many firms are comfortable with their existing business model, but looking for ways to grow, improve, and maybe even increase their valuation. Perhaps you’ve considered a subscription model, but aren’t entirely comfortable pitching it to your clients. 

Benefits of Subscription Model for FP&A Accounting Firms

Moving to a subscription model means you can focus on outcomes, instead of just hourly (inputs) or fixed-priced (outputs). Here are some benefits we’ve seen in our businesses: 

Predictable Revenue

It’s never fun to be uncertain if you’re making enough each month based on the ups and downs of your clients. A subscription model means that you’ll still have ebbs and flows in work, but your revenue can remain predictable. 

We don’t need to tell you the advantages of this for a firm, but just in case:

• Better ability to plan for opportunities and fluctuations 
• Less stress over meeting payroll 
• Cleaner books and easier internal and external reporting - as an added bonus, some firms even eliminate invoicing when moving to the subscription model, saving time on this administrative task!

Happier Staff

Being able to keep employees paid on time is the bare minimum for retaining staff in this competitive market. Subscription models can help your FP&A advisory because:

• Many employees prefer working with subscription-based firms because it means there is less pressure on making a minimum number of “billable hours”. 
• Predictable revenue allows for more staff training such as paying for advanced degrees and certifications.
• Distributed teams who work remotely often are attracted to the subscription model, knowing that it means the company focuses on outcomes. 
• Regular communications with clients mean staff form meaningful relationships, making tax season less stressful because the books are in order. 

FP&A Advisory Focus

One of the best ways to dive into FP&A advisory is clear pricing and subscription packages, whether for new or remaining customers. You can share what reports and level of support can be expected for each level, including a slew of relevant forward-looking advice, forecasts and projections.

If you’re wondering how to have these conversations, our article How Firms Can Build Confidence in Advisory Discussions shares tips for new and existing clients. 

High Firm Valuation

Whether you’re considering retirement or an earlier exit from your firm, subscription models can get you a higher valuation. While there may be some fatigue in the Business-to-Consumer marketing with subscription models, for B2B (Business-to-Business) markets the subscription model is booming. Investors recognize this trend. 

Benefits of Subscription Model for Clients

Consistent Communication to Meet Goals 

Many firms report that clients are hesitant to contact them when paying an hourly rate and end up in difficult situations because they put off calling their accountants. 

By having regularly scheduled touchpoints built into your subscription, you can both find problems and trends before they spiral out of control. 

This reinforces a comfortable relationship where clients are happy to reach out, and you’ll be able to create even more value together.

Tax season is also less stressful for clients who have improved relationships with their advisors, and they can enjoy their year feeling more confident in their finances. 

Clear Expectations

A mismatch in expectations can be a leading cause of client dissatisfaction. Keeping everyone on the same page increases customer retention and satisfaction. When you have a subscription model, everything is laid out clearly and explicitly for each package. 

Known Investment

It can be stressful for clients to predict how much support they’ll need from their accountants. With a subscription model, they can feel at ease budgeting and knowing what they can receive. It’s less cognitive load, taking one more thing off of a busy client’s plate. 

Flexibility

Clients can also feel better knowing that if there’s a time when they need more support, so long as it’s provided for in their package, they are going to receive it. They can do this without worrying about budgeting more time. 

Less Risk and Barrier to Entry / Exit

Subscription models mean clients can cancel at any time. It’s much easier for them to take on an accounting firm knowing that there are no penalties or unresolved hours to figure out if they decide to end things. This also ensures your firm is motivated to keep delivering value! 

Tips to Develop and Deploy Your Subscription Model

Now that you have the information to create buy-in for your FP&A advisory’s subscription model, here are some next steps: 

• Think about how frequently you want to bill clients. Some firms find success with weekly subscriptions, while others do biweekly, monthly, quarterly, or annually. 
• Consider what is included in each subscription level, with a particular focus on outcomes such as reporting. 
• Determine the frequency of meetings with clients - Weekly? Biweekly? Ensure regular touchpoints are scheduled so both parties can take full advantage of the benefits of the subscription model. 
• Decide if you will have a limit on the amount of hours for each client. Many firms decide to set no upper limit, recognizing various companies will have more and fewer needs depending on their profile and time of year. 
• Ensure you develop engagement letters that make sense for the subscription business model, particularly considering if clients are based in different locations. Hiring a lawyer often makes more sense than finding something online which may not cover all the bases. 

To hear the full conversation, see our webinar on moving to the subscription model.

Everything You Need for Your FP&A Subscription Model

From resources to our purpose-built FP&A Advisory software which drives value with tailored dashboards and powerful integrations, Jirav has you covered if you’re moving to a subscription-based model. Reach out for a free demo call today!