If you’ve been paying attention to the accounting industry for the last several years, you’ve probably picked up on a trend many firms are starting to adopt: CAS, or Client Accounting/Advisory Services. What exactly is CAS? You can find out more about what CAS is here. The real question is, is CAS something your firm should offer?
Essentially, CAS is about rebranding the relationship accountants have with their clients. Historically, it’s been focused on accounting and tax services, or compliance after-the-fact services. Now, with evolving technology and a remote workforce, it’s easier for accountants to offer advice and give clients their perspective and expertise proactively. Which brings us back to the question...
Should your firm offer CAS? Let’s look at the numbers.
Potential for increased revenue
A 2020 CPA.com survey found that 29% of clients report needing advisory services and a whopping 68% of clients reported wanting consulting from their CPA firms if price wasn’t an issue. Additionally, CAS firms boast a higher staff satisfaction and increased revenue compared to traditional accounting firms. According to CPA.com, accounting firms have the chance to increase monthly client revenues by 50% through offering strategic advisory services. The Journal Of Accountancy reports that on average, clients who don’t use advisory services pay an average of $1,108 per month at their CPA firm compared to the $1,585 monthly price clients who do use advisory services are spending—a 43% increase. Now might be the time to join the movement, considering CAS firms saw a 20% growth rate, according to recent data.
More opportunities to add value
If you’re getting paid to only get compliance work done for your clients, that’s going to be your main focus. Meanwhile, if you’re providing advisory services, each time you speak with the client is a new opportunity to showcase your value and offer more services that could help them. CAS is solution-oriented and gives you the freedom to stay curious, be proactive and always look for ways you can add value to your clients. With advisory work, accountants are always looking for ways to add more value to the client, which brings more opportunities for higher rates. Instead of being paid for the work being done, you’re being paid for your expertise, knowledge, connections and value.
Flexibility in billing model
CAS firms have more flexibility with their billing structure or billing model. Offering advisory services allows the firm to improve the billing procedure and hourly billing is no longer necessary. CAS firms typically implement value-based pricing, instead of hourly billing. With upfront billing, everyone is happier—the accountant gets paid before the work is done, and the client knows exactly what service they’re getting and what the cost is. Some firms who have transitioned from hourly billing to a subscription-based method, still track time internally for record keeping, but it’s no longer a necessary part of the business model and it’s no longer how the accountant gets paid for their services. With subscription-based pricing, anytime you interact with the client, you’ve already been paid. This can lead to better client relationships because everyone involved has a clear understanding of the cost, what’s owed, and what value the accountant is offering. Say goodbye to the days of clients feeling afraid to reach out to their accountant, and the days of accountants dreading client interactions.
Year round and diversified cash flow
While CAS firms can still do compliance work for their clients, it is no longer the main focus. This paired with the fact that the firm is being paid monthly, means cash flow is no longer seasonal and dependent on tax season. With CAS services, there’s more interest in the process of the services you deliver, compared to compliance—typically, compliance-only clients aren’t interested in hearing about which areas were more difficult, they only want to know the work was completed. Rather of telling clients “Hey, here’s your tax return,” they’ll instead want to hear “Hey, here’s all the time and money I’ve helped you save and here’s a report with important decision-making information you need for your business.” The client/accountant relationship in an advisory model is more of a partnership.
So, should you join others in the industry and adopt these services? Well, the data speaks for itself, but ultimately it’s up to you if launching CAS services is best for your accounting firm.
Does your firm offer CAS? Let us know your experience in the comments below.