Inside Client Accounting Services: Promise and pitfalls


Few service offerings can boast the sort of boom that client accounting services have enjoyed in the past five or six years, as technological advances (particularly in the cloud), client needs, and bold practitioners have combined to create enviable growth rates and an entirely new way of looking at how firms serve business clients.

For all its success, however, CAS remain an ill-understood niche, with many accountants unsure what it entails and what it offers for their firms. With that in mind, Accounting Today convened a “virtual roundtable” of cutting-edge practitioners and firm leaders, along with industry experts, to shed some light on this phenomenon.

In the first installment of the roundtable, the panelists defined CAS, gauged how far it has come, and predicted its future; in this second part, they discuss integrating CAS into an accounting practice, and some of the practical issues surrounding that.

What pitfalls should firms be aware of when they’re launching or transitioning to a CAS practice?

Hitendra Patil (director of customer success, AccountantsWorld, and author, “Accounteneur”): Three key things:

  • Expecting the clients/prospects to know about CAS that your firm can offer now. As a firm, when you take steps to create and align your internal processes, deliverables (e.g., new types of reports) and technology stack, you can tend to feel that you are all set. If you don’t explain the “before and after” and what are the new benefits to clients, what will they miss out if they don’t buy CAS, clients will simply not know it. Marketing and client communications are a must for CAS. And the “services” sections on your firm’s website must be revised to let prospects know and get a feel of what they can get from your CAS offering.
  • Expecting CAS to be an add-on to existing ways of working. CAS can fundamentally change some of your current internal processes. It means your people have to learn some new ways and unlearn something that they did for years. It is an addition and a modification, but also a deletion of some of your processes. Your people will also need to learn the new components that you may add to your technology stack.
  • Expecting the same pricing methods to work for CAS. You will need to create separate CAS engagement letters/agreements. And especially if you are just starting your CAS segment, make absolutely sure to build a 90-day review period for future price adjustments (based on the volume of work, the time it takes to process, refining your processes, etc.). Your current profitability calculations will not work for CAS (because you will produce and deliver more services in CAS), so keep the price adjustment doors open and make sure clients are informed so that there are no surprises, haggling and heartburn later.

There are more “manageable” changes to be implemented at your firm for CAS, and some adjustments to your technology stack are inevitable if you are new to CAS.

Kenji Kuramoto (CEO and founder, Acuity): The biggest mistake I see firms make when starting a CAS practice is not understanding that the cadence of CAS services is entirely different than the traditional service lines within CPA firms. CAS work is often performed on a weekly, if not daily, basis. I’ve yet to see a firm successfully launch a CAS practice by staffing it with tax staff who are out of their traditional busy season times. Using this approach, you may gain a few clients in the summer but you’ll like lose them and burn bridges with clients come tax busy season when the same staff have to up their utilization for tax work. Using a dedicated team for CAS is essential.

Liz Mason (CEO, High Rock Accounting): Providing CAS for hourly rates is always a bad idea. Try to price your engagements based on the percentage of a full-time equivalent’s salary. It gives you a good base for clients to respect the value of what you are doing for them and respect you more for it.

If you are just launching a CAS department, hire someone who has used all of the technology before to iron out your tech stack, or hire a firm to do it. Do not try to implement accounting systems on your own without support and without the experience to do it well.

Another big pitfall is paying for variably priced software on behalf of your clients (payroll software being a big one).
I have been burned a few times with disappearing profit margins after a client significantly increased business use and I footed the bill.

Erin Vukelich (client advisor II, JCCS): I would recommend firms review their current mission and vision to make sure the services they offer align appropriately and address messaging at the top. If there is no buy-in at the top of the organization, it is a struggle to get any traction. You can be engaged with all the best software applications and tech, but if no one is using them, then it’s going to waste.

Once you do get buy-in, don’t be afraid to fail on an implementation. Use the failure as an opportunity to learn. I learned more from messing up an implementation than I did from implementations that go perfectly. So don’t be afraid of the failure, and don’t let one failure turn your whole initiative on its head.

Michael Cerami (vice president of marketing and alliances, At, we’ve consistently said that the technology adoption piece is the least challenging component. But it’s not just about adopting emerging technologies. Firms need to assess workflows and processes that optimize the technology. Sometimes this means turning your business model on its head, and practitioners don’t like to take a departure from what’s familiar to them. So the change management component can be the real challenge. Objectively assess your firm’s strengths and weaknesses first, and then develop a solid strategy for the type of CAS offering you want to put in place. We’ve developed a lot of resources to help firms make this transition, because it’s critical.

There also should be a recognition that the typical measures of success for other practice areas (like tax and audit) don’t necessarily apply here. In an advisory model, you’re moving away from the concept of compliance and hourly billing, so defining your value is key. That’s also why it’s important for CAS practices to do work on branding, messaging and marketing, because clients may need to be educated about what your firm brings to the table.

How much technology-savvy and tech-related talent does a firm need in-house to offer CAS?

Carolyn Hall (director, FWRD Services, Wiss & Co.): It certainly helps to have technology-savvy talent within the firm. There are challenges in finding experienced staff, though. An alternative option is to hire talent that is open to change and quick to learn technology.

Cerami: CPAs don’t need to write code, but they do need to understand the impact and opportunity of emerging technologies. What we see in leading CAS practices — and the more successful CPA firms in general — is a recognition that the accounting firm of the future will rely on constantly evolving skill sets, so it’s important that some team members will have a solid grounding in technology. This is really a broader firm issue that’s emerging first with CAS — the cloud, artificial intelligence and blockchain are also going to change the way CPAs offer services in traditional areas such as tax planning and the audit, too.

Vukelich: Depending on the size of the firm, I do believe there needs to be at least one champion who is willing to take the technology and learn all that they can about it. They will drive the success in the location they are in or team that they are on. Also, there may be talent hiding in plain sight with current employees who just need to be given the opportunity and time to adapt to the technology. We currently have a champion in one of our offices who has become a power user of our applications, and it is someone I thought would be reluctant to adapt to change. If she hadn’t been given the opportunity to grow, we would not have known how much of a rockstar she could be!

Kuramoto: CAS as a meaningful practice cannot exist without tech-savvy talent. The days of physically moving people and data between clients and firms is all but over. It’s an inefficient use of time and the accounting labor market is much too tight to hire for that type of antiquated process. So performing CAS in the modern era requires talent that can communicate effectively and complete their work in a digital environment, which means staff have to be knowledgable and comfortable using a wide variety of technology tools.

Mason: Technology-savvy humans will be relied-upon resources in every single industry. There is hardly an industry out there that technology has not infiltrated and improved. As such, it is never a bad thing to hire that talent. That being said, a firm never needs tech-related talent to offer CAS. There are plenty of firms that will provide the systems set-up for CAS clients and train the firm team members to use the technology. Using the technology is a far cry from being a technologist, and every accountant is smart enough to use it (we are lucky to be in an industry with intelligence!). Additionally, tech support and free education at every application has improved dramatically and should be used as a resource to CAS professionals.

Patil: I believe there is not even one firm in the market that does not operate technology for accounting and related work. Given the fact that every person in every accounting firm is a technology user, what a firm needs to set up a successful CAS offering is one or two “CAS champions” who align the firm’s internal processes with technology and then train the other users on it ­— and that includes users at clients’ offices. The more a firm can train the users on how to consume the CAS deliverables and insights online, the better the client satisfaction levels from CAS. You do not need to be a technologist to offer CAS successfully.

How small a firm can offer CAS? Can sole practitioners do it?

Vukelich: I truly believe any size of firm can offer CAS. I know several sole practitioners who only do CAS work now and are totally invested and successful in their work. Performing CAS work can often make the relationship between the client and the practitioner stronger. The practitioner can spend the time to really understand
the client’s business and what their goals, pain-points, etc., are.

Mason: Sole practitioners can absolutely offer CAS. In fact, some of the best CAS professionals only work with a limited number of clients at a time. CAS covers everything from bookkeeping through partial CFO services, so there is room for firms of all sizes.

Cerami: Yes, we know sole practitioners who successfully offer CAS, particularly those who serve niche businesses. But to be clear, they typically surround themselves with capable para-professional staff. And smaller firms can be at an advantage because they can be nimbler.

Patil: Small firms can (and should prefer to) offer CAS successfully. And yes, even solo practitioners can do it too. Results from a fresh CAS survey showed that nearly 80 percent of respondent firms offer CAS. Given the fact that the accounting profession comprises about 80 percent small firms, including solo practitioner firms, it is evident that firms of all sizes are offering CAS. In my experience of working exclusively with accountants, “advisory” offerings are becoming increasingly common with smaller firms, including solo practitioners. CAS is an essential precursor for such advisory services. And smaller firms are indeed offering CAS successfully.

How? It is a simple equation. “Time” is the scarcest resource for smaller firms and relative shortage of it can get such firms competed out from the CAS marketplace. Hence, two things matter the most for CAS success of such firms.

  • Standardization of internal processes, with the flexibility to customize the components of CAS packages for each client (ability to do what is best for each client); and,
  • A more automated and integrated technology stack. Being on the cloud opens up possibilities of quickly leveraging “remote shared resources” to augment capacity on-demand, without long-term locked-in liabilities. Think of large, one-time projects that you otherwise can lose.

These two together will help maximize the time availability and increase “utilization” at smaller firms. CAS can fetch two times the fees from CAS clients, compared to that from non-CAS clients. The net
impact of standardization and automated/integrated tech stack is that the firm can earn more per resource. This will increase profitability as well as the net income of the firm.

CAS provides comparatively more client satisfaction. Therefore, in addition to getting “referrals,” getting good reviews from existing clients is relatively easier. Smaller firms must proactively ask for Google reviews. Smaller firms across the country that are our customers at AccountantsWorld tell us that their No. 1 source of getting new clients is from Google search results because they have a higher number of good reviews. In many locations, just five to 10 four- or five-star reviews can place the firm on top of Google organic search results, without paying a dime for SEO and ads.

Kuramoto: CAS is a great practice to start with as a small firm or even a sole practitioner. There’s not a single other offering I’ve seen within accounting firms that puts you closer to the client on a consistent basis. So even if you’re not sure if CAS is the only service you want to provide, it can be a great opportunity for identifying other service lines since CAS work sits so close to clients and their needs.


Comments are closed.