A modern accountant’s guide to client accounting services

Client accounting services — also referred to as client advisory services, CAS or CAAS —  focus on providing advisory accounting rather than the compliance-heavy services that generally characterize accounting. 

There is a considerable demand for advisory services: A 2020 CPA.com report found that 68% of accounting clients would want their CPA firms to provide them with strategic consulting if the price weren’t an issue. 

According to the second and latest Client Advisory Services Benchmark Survey from CPA.com and the AICPA Private Companies Practice Section (PCPS), CAS firms “grew at a median rate of 20%, almost two times as fast as the 12% reported in the 2018 survey. This is over three times the average practice growth of 5.7% reported by other 2020 CPA firm benchmark surveys.”

Defining client accounting services

The AICPA and CPA.com define client advisory services as “a practice where firms advise clients across a spectrum of financial and accounting related decisions, with the goal to deliver higher value and deepen the trusted advisor relationship.” In order to provide the proactive and in-depth insights that are required to run a successful CAS practice, CAS professionals leverage technology and efficient processes. These practices have a foundation of outsourced accounting services like bookkeeping and financial statement preparation but also offer services like business process outsourcing, outsourced controller or CFO services, including business forecasting and modeling.  

The five most common client accounting advisory services are: financial statement prep, accounts payable, CFO/controller advisor services, budgeting/forecasting, and payroll services. Rather than simply ensuring that a client’s tax return is correctly prepared and submitted on time, CAS firms review the return and ask how they can add further value and perspective. 

To have a CAS firm, you need to change the narrative about accounting — you’re no longer selling your time; you are selling your knowledge and expertise. CAS firms look to the future, helping their clients remain proactive and make the best decisions for their business. But that doesn’t mean a shift away from compliance services. A good way to visualize this relationship is that the compliance side is like the cake and the advisory services are the icing. 

Why offer CAS?

Over the last several years, we have seen a massive increase in remote work and technology adoption. According to a study, “78% of small businesses say that they would consider switching accountants to one who uses the latest technology.” Accountants and their clients are more comfortable working hand-in-hand without consistent face-to-face interactions and are increasingly, securely sharing sensitive documents online. As a result, it has become easier for accountants to create an ongoing partnership to offer advice and provide proactive expertise. Additionally, the CAS Benchmark Survey found that CAS firms showed strong profits that exceeded traditional practice areas by between 6 and 13%.  

Below are a few things to consider when assessing if CAS is a good fit for you:

  • Increased opportunities to add value for clients. Compliance work is often systematic and clearly defined; however when you provide advisory services, each client touchpoint is an opportunity to find more value and potentially offer additional services. 
  • Technology is key in making CAS work. In order to benefit from running a CAS practice, it is essential to leverage the benefits of the cloud and other technologies. Technology enables accounting professionals to dramatically reduce the time spent doing administrative tasks, enabling them to spend more time providing more clients with higher value services like proactive advisory. 
  • Fixed price model or value pricing where possible. Advisory work is much different than compliance work as it is ongoing, proactive and potentially less time consuming. As a result, charging an hourly fee for the exceptional knowledge you provide to clients doesn’t do you or the work justice. Defining several packages starting at different price points, with room for customization is a great place to start. And with this kind of subscription-based pricing, anytime client interaction happens, you’ve already been paid. This can create better client relationships because cost, what’s owed, and what value the accountant is offering is defined upfront.
  • What business model works. Before transitioning to offering advisory services, firms need to spend time looking at which business model it would require and what changes would need to be made. 
  • CAS likely means year-round cash flow. Monthly, upfront payments mean that cash flow is no longer seasonal and dependent on tax season. Instead of handing your client their tax return once a year, you can provide a report of all the money you helped them save and important decision-making information they need out of their business.
  • Specialization helps considerably. Since CAS accountants are intimately familiar with their client’s businesses, CAS firms generally choose to specialize in one or a small number of niche markets

Incorporating advisory services into a traditional accounting firm is not simple. There are many things to take into consideration and because starting a CAS practice is such a significant undertaking, firms need to fully commit to it for it to thrive. However, once the move is made, there are significant benefits and, as client expectations evolve, it is a real differentiator.