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Client advisory services (CAS) practices saw a 20% growth rate in terms of net client fees per professional, according to the latest CPA.com & AICPA PCPS Client Advisory Services Benchmark Survey. That outpaces the 12% growth rate CAS practices reported in 2018, the inaugural benchmark survey and the last time it was conducted. Respondents reported having more CAS clients, higher net client fees, higher fees per professional, and higher CAS net client fees per client than they did in 2018.

These results “validate what we’ve been seeing in terms of the growth and profitability of CAS as a practice area,” said Phil Quimby, product marketing manager for CAS at CPA.com. The survey defined CAS to include outsourced accounting services and virtual CFO and controller services, as well as handling business processes, such as bill paying and payroll, for clients.

He attributes CAS’s growth over the two-year survey period to broader adoption of cloud technology, which makes CAS possible, as well as elevated visibility of the benefits of CAS. “Increased awareness of and focus on CAS has also resulted in better CAS-specific KPIs and metrics,” he said.

“CAS has become an increasingly strategic component of CPA firms’ offerings, and this was never more clear than during the pandemic,” said Erik Asgeirsson, president and CEO of CPA.com. “Looking forward, we see new opportunities in business forecasting, business funding, and other categories that will drive growth and provide greater value for clients.”

The survey was conducted online from August to December of 2020 and includes data from fiscal year 2019 as well as the early part of 2020 for 111 CAS practices. Respondents’ practices varied in size from under $250,000 to more than $4 million in net client fees in fiscal year 2019. Eighty-one percent of respondents said their CAS practices were part of a CPA firm.

Results from the survey were reported in median values. Practice growth rates were measured in terms of net client fees per professional. This metric was chosen, Quimby said, because it “better reflects CAS success across practices of varying sizes. Other common metrics, such as utilization or margin percentage, may not reflect the unique pricing and staffing structures employed by CAS practices.”

Quimby noted that the survey provides one of the most comprehensive sets of CAS practice performance data to date. “Now, after the inaugural survey, we have a second set of data to help us measure and benchmark the performance of CAS practices,” he said. “We have insight into what metrics drive performance, and can share that information with firms to help them manage their CAS practices.”