Defining Value Added Services
Value added services are a large category of services which meet one test – they actually add value in some way or form to the client. The common value added services include tax planning, profit improvement, business development, and succession planning.
Types of value added services
Value added services that an accounting practice can provide include:
- Tax planning.
- Succession planning.
- Cash flow management.
- Strategic planning.
- Business planning.
- Asset protection.
- Annual budget preparation.
- Quarterly review of actual performance versus budget.
- Customer segmentation and pricing analysis.
- Business valuation and saleability improvement.
- Key performance indicators.
- Benchmarking.
- Break-even point calculations.
- Customer segmentation.
- Organisational structure.
- Unique selling proposition.
- Internal control.
- Competitor analysis.
Many services provided by accountants are promoted as value adding, but actually add very little value at all. To pass the value-added test the service or product must generate value for the client that is at least three times (3X) the cost charged by the accountant. For example, a tax planning service provided to a business client at a cost of $1,000 must generate legal tax savings for the client of at least $3,000.