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Client advisory services have already moved to the next phase

The accounting profession has been listening to the klaxon now for close to a decade: CAS! CAS! CAS! If you haven’t heard professional leaders tout client advisory services in their speeches, you’ve heard peers discuss them at mixers or read articles about their importance.

Yet firms everywhere still haven’t heeded the call. But this isn’t a public shaming—the firms still not invested in CAS have plenty of good reasons for not having gotten started. These could include a lack of resources, undertrained staff, fear, uncertainty about how to get started—even a lack of clarity about what constitutes CAS in the first place.


To make matters even MORE confusing, many CAS early adopters are moving into a 2.0 phase. That’s right, the CAS we’ve been talking about all this time is growing up and entering a new realm. Unfortunately, this means firms that want and need to get started offering client advisory services are now further behind than they were even a few months ago.

I don’t want to imply this is a race. But there is urgency attached. Easily repeatable, low-skill tasks like data entry are quickly being offloaded to automation. Firms that still use staff for these tasks are spending precious resources they could dedicate to the much higher-margin services of advisory. And they’re risking losing staff who want to be more involved in the kind of higher-value advisory services work clients most want, but can’t be, because they’re too busy doing mundane, time-consuming tasks technology could automate for them.

There’s good news. CAS follows a logical progression from transactional services to advisory services, allowing your firm to assess the services it can (and wants to) offer and develop a clear roadmap for getting there. It’s helpful to understand what services are involved in each stop along the way.


CAS 0.0

If you haven’t gotten started yet with a CAS practice, then this is most likely where your firm sits. You do mostly write-up work and bookkeeping — GL and trial balance, cash reconciliation and financial statements. In the past, it was a mainstay of firms and the work was plentiful. But these services have become commoditized, and in most cases, it’s too expensive to have a person doing them; firms that automate these have a distinct competitive advantage.


CAS 1.0

The big move to CAS 1.0 is that your firm now does outsourced accounting in the cloud in addition to write-up and bookkeeping. You already know there’s a ton involved in that, but it can include items like AP and bill payment, AR and collections, payroll, tax prep assistance, debt management, bank and credit card transaction processing, and financial statements.

Essentially, your firm now acts as a full-service virtual accounting department for small businesses. This creates enormous efficiencies for the client, who can now focus on their business. They can also count on better business operations and continuity, not needing to worry about their historical and institutional knowledge walking out the door with a departing accountant. Finally, they can let go of worries over security for their financials, knowing it’s handled by professionals who hold security at a premium.


CAS 1.5

In CAS 1.5, the firm adds outsourced virtual controllership services. This gives small companies access to experienced controllers at a fraction of what they’d have to pay to keep them in-house. Traditionally, services include comparative reporting, cash flow forecasting, budgeting, month-end close, software suggestions and implementation, fixed asset management, and more.

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If a client is trying to raise capital, sell their company or merge with or acquire another company, a Controller can be essential. Additionally, they might not have enough work to keep a full-time Controller busy, which makes outsourcing one a smart choice.

The ability to collect and report on historical financial data is a piece of the puzzle many growing businesses are missing. The value of a Controller is immediately apparent in improved forecasting and goal-setting. It’s a benefit many businesses aren’t even aware they need until someone talks to them about it.


CAS 2.0*

As firms move into CAS 2.0, they are undertaking outsourced virtual CFO roles.

For accounting experts who have been at the job a while, an outsourced CFO can sound a bit strange. It can be hard to imagine a non-employee having the familiarity with a business necessary to do the many things a CFO does. The truth is, technology has made access to the information a CFO needs to be effective far simpler than it was even ten years ago. 

Market information, profitability, financial statements, budgets… practically every vital statistic about the finances of a business can be collected almost instantly when a business’ technology supports it. And when that’s the case, a Virtual, or Outsourced CFO can easily accomplish modeling, planning, forecasting… the million things a CFO does best.

The advisory services of CAS 2.0 don’t just fill a gap in growing businesses’ operational needs, they catapult firms into a world of higher margins and more tightly integrated client relationships. In CAS 0.0, firms might see their clients only sporadically, and for relatively low-dollar reasons. By the time a firm enters CAS 2.0, it could be communicating with clients multiple times a week, or even daily. Each interaction is an opportunity to strengthen relationships, offer even more services (and charge more), and develop a client roster that enhances firm value.


To move up the CAS ladder, prepare your firm

There’s a shift in state of mind that has to happen as your firm starts offering cloud advisory services. First and foremost, you want to make sure your staff is prepared to serve clients in new ways as well as hire new types of talent (technical talent to implement a cloud tech stack, and senior leaders with controllership/CFO skill sets). Aside from the obvious technical knowledge, you’ll want them to practice their soft skills

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Take a good look at your client list — the tax returns you’ve been preparing can be an excellent way to determine which clients might be good to target for expanded services. Identify what it is you think your firm can do best in advisory, and consider specializing. It will give you a competitive edge and hone your firm’s skills working within a particular market.

One of the most important things you can do is reduce the amount of time your firm spends on low-value, time-consuming work. If your staff is spending hours upon hours of time on data entry and administrative work that comes with bookkeeping, for example, they won’t have the time to do the kind of analysis and insight development that will benefit your clients and your firm.

If you’d like to learn more about CAS 2.0 and the rise of Virtual CFO services, Botkeeper offers an excellent guide. However you decide to get started, the journey to CAS 2.0 is sure to be one that takes your firm in new and exciting directions. The next step is up to you.

*With thanks to CPA.com.


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