Beyond Numbers: Why Client Advisory Services (CAS) is the Future of Accounting

For the last 50+ years, it’s been perfectly acceptable to provide an accounting service that simply “checks the box”. Moving forward, in order to build sustainable accounting services, firm owners must embrace the evolution of technology and the changing landscape of a high-caliber client experience.

CAS: It’s Not a Service, but Rather, a Mindset

First, what is CAS? The truth is - the jury is still out. Client Accounting Services, Client Advisory Services, CFO Services, Strategic Services, the list of the definitions goes on. Everyone has a unique perspective on what CAS is and what CAS isn’t, but here is how we think about CAS. Client Advisory Services is a strategic financial service predicated upon a deep understanding of your client’s needs and delivered through intentional financial, technology, and expert-driven solutions to improve your client’s likelihood of success.

In today’s CAS landscape, we often see firms promote services such as forecasting, cash management, financial modeling, and other ‘strategic’ services and label these items as their ‘Advisory Services’. They are often listed in medallion-structure pricing arrangements and indicate to the market that these are items that they can ‘opt-in’ to.

There is nothing inherently wrong with this approach, however, I believe that approach completely misses the point of what an advisory service should resemble. CAS is not a stand-alone service. CAS is not a product. CAS should be an undercurrent of the holistic solution offering that culminates in a deep and trusting relationship with the client.

As an example, here are two firms that offer CAS services:

Firm A

Services: Bronze, Silver, and Gold packages

Advisory: Inclusive in Gold package, that incorporates forecasting

Pricing: Fixed

Client Communication: Tightly Parameterized

Firm B

Services: Customized

Advisory: Inclusive, top to bottom

Pricing: Fixed + Variable

Client Communication: Structured, but variable based on client need

Firm A introduces a high-degree of scalability by highly productizing their service offering, pricing, and client communication. Firm B may sacrifice the productization of their service, but prioritizes the advisory nature of the relationship as they seek to meet the needs of their ever-changing clients.

While both Firm A and Firm B both offer CAS-type services, I would be more prone to work with the firm that the level of engagement at each touchpoint with my service provider would allow for the flexibility required as my business grows, changes, pivots, and evolves over time.

The difficulty for firms lies within the understanding of how to structure and scale a relationship-driven service. This is where the rubber meets the road. In my opinion, you must make a decision to prioritize the scalable nature of a product-oriented service or embrace the nature of variability and potential volatility that comes with a relationship-first CAS approach. Both can be scaled, but require a tremendous amount of technical and operational efficiency in order to achieve magnitudes of scale.

Embedding CAS Into Your Day-to-Day

Let’s take a look at how you can begin to incorporate a CAS mindset into every layer of your service line.

Your entry-level bookkeepers and accountants are responsible for transactional categorization and perhaps reconciliation of bank and credit cards accounts. The ‘basic’ data entry of these individuals (or tools) is mission-critical to garner key insights into a client’s cash flow patterns, budgetary insights, as well as downstream efficiencies for financial reporting.

The mission at the transactional layer is to drive consistency and comparability. As a firm owner, your responsibility is to educate your team on how to drive these outcomes and push improvements to your clients’ operations in order to achieve the desired outcomes. 

Do we have inconsistency in how transactions are categorized? Let’s educate our team to make recommendations on how to establish bank rules in QuickBooks. Are there period-over-period comparability concerns? Let’s ensure that our team knows how to rapidly identify and remedy multi-period reporting issues through a consistent reporting framework that highlights the concerning issues that require additional attention.

Utilizing Technology to Build a CAS Mindset

The mantra around technology improvements and AI capabilities  in the accounting industry have revolved around the idea of internal efficiency and optimization. While a noble mantra, we believe that the use of technology should not only serve internal purposes, but be constantly evaluated to elevate client outcomes. Here are 2 examples on how to utilize technology to improve client outcomes and build internal efficiency:

1. Connected Data For All
   1. Clients come with a variety of disparate systems, data sets, and siloed operations. In our view of CAS, it is our responsibility to harness technology to bring data organization to the chaos. The quality of the underlying data generation is integral to operating as a strategic advisor to your clients. 
   2. The lowest bar in this effort is achieved through ensuring that your transactional data-generating tools are integrated into your accounting system. Ideally, these disparate systems are able to be aggregated into a single system to yield quality data. An easy example could be utilizing a multi-suite product tool like Quickbooks - GL, Payroll, Bill Pay, Money, etc. When your transactional-layer data is connected, your ability to drive consistent outputs is much greater. But hey, wouldn’t recommending a suite of connected data sources be a great starting point for your advisory services? Doesn’t this also drive a sustainable foundation for any growing company? This is advisory, we’re doing it!
2. Workflow Management
   1. An unfortunate reality is that workflow management tools for firm owners are not ubiquitous. I suspect that  every aspiring accountant deploys some form of workload management techniques, however, operationalizing a system to support client requests, document management, and internal team assignments is becoming more of a necessity than a nice-to-have.
   2. Pose the question to yourself - if I were to engage an accountant for my firm or personal finances, would I feel more comfortable engaging with a firm that utilizes a secure system that has an easy-to-use interface and automatic reminders or respond to last minute ad-hoc email requests with sensitive financial information?
   3. By deploying a workflow management system, you quickly establish a backbone for your business. One that clients can interface with, your team can track their progress within, and a system that can help you better manage your client workflows. This is what the accounting nobles would call a win-win-win.
      

What is the Benefit of Building a CAS Mindset?

When evaluating transitioning your team from box-checking to a team of top-to-bottom advisors, you open the doors to a variety of improved outcomes, here are a few:

1. Your clients begin to improve their financial hygiene and health, which fuels a higher likelihood of success. When properly set-up and advised, your clients will begin to make data-informed decisions rather than gut-driven decisions. This enables your clients to make smart financial decisions and also makes them feel equipped to handle the uncertainties of running a business.
2. You create new revenue opportunities and ‘stickiness’ for your firm. Firm revenue growth is often achieved through elevating your services with an existing client base through driving value to your clients. By creating and communicating the actionable data or benefit of your advisory services, you will more effectively translate advisory to increased revenue. If you are able to execute driving value through advisory services, you create a stronger bond with your clients that will yield a higher lifetime value.
3. You set yourself apart in the industry. In order to sustain growth, every business needs a competitive advantage. When you are able to incorporate end-to-end advisory services into your offerings, you immediately separate yourself from compliance-centric firms. You gain further competitive advantage through articulating your value proposition to a niche audience. 
   

Summary

In the realm of accounting, there historically has not been room for creativity. CAS services allow for a high degree of creativity, exploration of technology, as well as an ability to dig into a business model that has been long neglected by accountants. 

Whether you are a solopreneur accountant or seasoned CAS veteran, the ever-evolving landscape of our industry requires individuals to adopt a CAS mindset in order to continue driving high-caliber experiences for our clients. In the accounting industry, opportunities abound.

When push comes to shove, who do you want to be?What do you want to be known for? CAS is ever-evolving, but with an advisory-centric firm from the transactional layer to the strategic goalseeking conversations, it requires a collective mindset at every level in your firm.

_{This was lovingly written by yours truly in a paid partnership with Intuit 💚.}