Client Accounting Advisory Services Are Transforming the CPA World

Technology, Accounting, Business, Practice Management

Client accounting advisory services — “CAAS” or “CAS” as they are more popularly known — are transforming traditional accountancy by changing the way CPA firms serve their clients. Number-crunching and bookkeeping are now being supplemented with entire suites of other services designed to position the CPA firm as a trusted advisor.

That’s right. Trusted advisor. Not just “tax season form filer.”

The word “accountant” can conjure a lot of unflattering images. Visored bean counters. Poor old Bob Cratchit working for Ebenezer Scrooge. Leo Bloom, the negligible nebbish from The Producers

While accountancy isn’t known as a glamour profession, the role of accountants, especially when it comes to CPA firms is anything but negligible. The amount of trust clients put into CPA firms is huge, so it makes sense that such economically intimate relationships would evolve over time.

What are client accounting and advisory services?

Client accounting and advisory services are simply additional services a qualified CPA firm can offer its clients. Where firms have long had departments specializing in areas like Tax and Audit, as would be expected, many now have departments focused on other value-added accounting services.

Rather than simply helping businesses keep track of money and report their financial activity in compliance with regulatory rules and regulations, firms are now delving deeper into the lives of client companies. For instance, a company that cannot afford a CFO to bring financial perspective to the decision-making process and offer advice on how best to navigate in the current economy can turn to a qualified CPA firm to receive those services virtually. Virtual controllership is another avenue to pursue. A CPA firm can even choose to provide comprehensive back-office support for clients, such as accounts payable/receivable.

Want to offer in-demand virtual CFO services?

Learn how to create the most value for your clients, and differentiate your Virtual CFO offering, with this whitepaper.

Download now

It takes planning to offer client accounting advisory services.

Firms that want to make CAAS an integral part of their revenue-generation stream need to be strategic about it. There’s a reason why so many of the top CAAS-providing firms were high-performing to begin with—they had sound governance from the get-go, which gave them the means to branch out.

Such firms also have a strategic outlook mentality. You can’t just decide to offer CAAS, you need to carefully plan out what it looks like for your firm. What do your clients need? What services can you offer that will truly further your client relationships, increasing their reliance on your firm?

Focusing on needs also means staffing with people who will be able to interact well with clients as they become more and more involved in business operations. Client accounting and advisory services require a whole new way of approaching the traditional firm/client relationship.

Client accounting and advisory services also require a well-designed, well-planned technology infrastructure with the capacity to automate services, allowing your firm to do things like budgeting and forecasting for clients while freeing up time for that whole new level of service that includes financial guidance, business planning and whatever else your individual firm has the expertise to provide. 

How profitable are client accounting and advisory services?

According to the available research, the answer to that question is, “Very.” 

In a 2020 study by CPA.com and AICPA PCPS, median net client fees among respondents rose from $895,000 to $1,123,257 between 2018 and 2020. 

Median net client fees per professional rose from $94,118 to $112,293, and median net client fees per client rose from $8,778 to $13,636.

There is a definite appetite among businesses for strategic support from the people they trust to help them keep track of their money. in fact, another CPA.com study found that, if money were no object

  • 68% of clients would want strategic consulting from their CPA firms; 
  • 41% would even want to turn over some of their financial operations to their CPA firms

And there’s more good news. One positive thing about the pandemic is that it got the world acclimated to remote working arrangements. That means your firm’s footprint can grow both nationally and globally.