4 questions to ask when creating a CAS practice

Filing taxes, auditing a business, preparing financial statements: These are all necessary services your clients need. But none of these really help you understand their business or deepen your relationships.

When you can provide full accounting services, you gain unparalleled insight into your clients’ business operations. Knowing so much about their business allows you to advise them on how they can streamline and grow. It’s a mutually beneficial arrangement:

• Your clients get a deeper level of accounting expertise without the dedicated expense of a controller or accounting professional.
• You can command higher rates as a consultant with more profitability and year-round relevance.

Another pressing reason to offer advisory services: If you don’t, someone else will.

The reality is CPA services are shifting. Growth-minded firms that want to build and retain a loyal client base must add the services clients need. As CAS accounting is normalized from a client perspective, clients will seek out a firm that can serve as a one-stop shop.

No matter how long you’ve been providing basic accounting services, your clients will look for someone new if they want more help — and will likely take their basic service business with them.

How you get started with client accounting services depends on the type of firm you’re a part of:

• If you’re the sole decision maker in your practice, congratulations! Your first step is a lot easier since you only have yourself to convince.
• If you’re in a firm with one or more partners, or all of the partners are not you, first get leadership buy-in on the plan.

This is important because developing an advisory capability isn’t like adding most accounting service offerings. Preparing a profit and loss statement, filing income tax returns, bookkeeping, payroll — each has a predetermined set of steps that tend to be externally defined.

Taking on advisory services is more of an entrepreneurial endeavor: You’re partnering with each individual client. You can create parameters, but each relationship is different with its own requirements and peculiarities. Client accounting services is a long game, and should be properly nurtured as you implement it.

Invest in the right people

Build a team of CPAs, CFO advisors, compliance pros, and others who are dedicated to the CAS line of business. This means no splitting roles or borrowing bodies when tax season comes around. Invest fully in your advisory team.

For midsize and larger firms, consider appointing a client advisory services leader and empowering that leader to protect their team against internal “borrowing.”

Invest in the right technology

The reason client advisory services can be so profitable for accounting firms is the potential for automation. Because you’re making services available to multiple clients, you’ll be able to invest in the technology that makes accounting services more efficient and accurate than manual processes.

Invest in platforms that handle a lot of the accounting work itself, like:

• General ledger
• Inventory management
• Bookkeeping
• Tax compliance
• Payroll
• CRM

By automating tasks, you can focus on finding ways to help your clients improve their business and dedicate time to building your relationships.

Because you’ll likely build your tech stack over time, it’s important to choose API-friendly platforms that integrate with multiple partners. Avoid locking yourself into specific vendors or creating dead-end solutions that limit growth potential.

Step 1

The first step to building your offering is to create a business plan. You should be able to define:

• Where your business is
• What your goals are
• How you’ll achieve those goals through
  • People
  • Processes
  • Technology

Your plan should get buy-in from across the firm, from leaders at the top to employees at the bottom of the org chart. It’s a large shift and everyone should know what their role is and why the decision is being made.

Step 2

Audit your own practice:

• Determine how to align your new offerings with your existing ones
• Figure out where the holes are in both staff and technology
• Eliminate the redundancies and streamline processes
• Review which of your current clients could benefit from advisory services

Step 3

Network with other CAS firms and professionals. Learning from other people’s successes and mistakes can save you time and money as you expand your business. You can also request referrals for partners, platforms, and professionals.

Step 4

Understand your target market. Get a clear view of the types of industries and clients you want to serve.

Client accounting services is a highly unique capability and you shouldn’t try to templatize it. But knowing the types of clients you cater to can create efficiencies and help you invest in the right professionals and technology.

Finding a niche or focusing on specific industries can give you insight into your clients’ pain points and influence the way you advise them.

Speaking of clients,make sure you’re working with the right ones — which means identifying when to say no (gulp).

Because a CAS practice is relationship-based, working with the wrong clients can be frustrating and costly. You need to trust each other and have good chemistry; it’s a partnership after all and you’re in it together.

To help you identify the right clients, set your relationship expectations up front, including:

• How and how often you plan to communicate
• The business data and information clients need to provide
• Timelines for receiving information and input
• The scope of services you’ll provide and their costs

How someone responds to your expectations is an indication of whether the relationship is a good one. If a potential client isn’t interested in the kind of relationship you’re offering, it’s important to learn how to say no. Having a list of trustworthy accountants to refer them to can be a welcome alternative to simply turning them away.