What does advisory mean?

When an accountant says they do "business advisory," what does that usually mean?

• What do they focus on when they provide 'business advice'?

• Answer:

  and have provided some great insight here regarding the other aspects of the accounting profession. I agree that the term 'Business Advisory' is a catch-all term to mean: "anything other than taxation and reporting compliance". Why firms impress this terminology as part of their outreach phrasing is because, taxation and reporting compliance kind of 'pigeon holes' (limits) the accountants to be glorified bookkeepers. The result, no real sense of 'value add' in those services and a consideration that those services are simply a commodity to be shopped around for to find the best price. With the change in the global economy and as laws continue to make business more and more complex, the role of the accountant is changing to a more 'Trusted Advisor' role meaning that, accountants are becoming the 'go to' people for holistic business advice. What accountants and lawyers share in common is that both professions (depending on specialisation) have the ultimate 'backstage pass' to business dealings. We see the cause and effect of many transactions (some repeater transactions). This is particularly evident with those accountants who work in 'the profession' as we get to experience a range of clients across a broad range of industries. So why not tap into that knowledge base when making business and transaction related decisions? Just about anyone can lodge a tax return, you can even do it yourself online, but not everyone can provide pre-emptive strategy, loyalty, commitment and  trusted experience to the clients, without having partnered up with them as they face their business and life challenges. This diagram below shows the position of a Trusted Advisor in comparison to a Vendor (commodity): When you and your client have a low/weak view of your relationship, you are a 'Vendor' meaning that pricing will likely be the key determinant of engagement. When you and your client have a high/strong view of the relationship, you are a 'Trusted Advisor' meaning that, loyalty, integrity and commitment that will determine the engagement, not price. Price is unlikely to be an issue when the relationship has reached this mark. This is why accountants want to distinguish themselves away from being considered only useful for compliance related matters. They want to be known as business advisors.