Whether you call it CAS, client accounting services, outsourced accounting or something else, CAS is one of the fastest-growing areas for many accounting firms. The CAS Benchmark Survey shows this area is seeing double-digit growth in firms — a rate exceeding overall firm growth. When automation is added on top of it, it’s like taking a rocket ship to the future. CAS is everywhere, but not everyone is successful at it; a lot of firms struggle with implementation. If that’s you, you’re not alone.
What is CAS, anyway?
The foundation for a successful CAS practice is to know what you’re selling. CAS means something a little different to most firms, and this confusion is something Hitendra Patil, author of “The Definitive Guide to Client Accounting Services,” picked up on early while conducting research for the book. He did an immense survey of more than 10,000 accountants and accounting firms on client accounting to find a universal definition of CAS.
“Those three words are pretty self-explanatory,” he said. “However, it’s often the client who needs to be educated on what CAS is.”
If clients think that accounting is business processing, you need to change their mind and educate them. Month-end, journal entries, depreciation and maybe producing financials or even tax — that’s all potentially CAS. Tax can be considered part of CAS if the accountant is also in the business, looking at the numbers and relying on their own record-keeping and financials. Tax is standalone and separate from CAS if the tax preparer relies on someone else’s books to compile the tax return.
“If you’re going back and cleaning up someone else’s mess, it’s not CAS,” Patil said. “But if you’re the one making sure the mess doesn’t happen in the first place, it’s CAS.”
CAS and advisory
While many people do not really understand what advisory is, how do they determine where advisory comes into play with CAS? Is CAS mainly transactional, CFO-type stuff? Or is there truly room for advisory services, too? The good news is yes, there is advisory!
According to Patil, if you view yourself as the business accountant (the one on the inside), then you’re seeking to learn from the day-to-day accounting. You want to understand the story that the numbers tell you so you can then communicate that story to the business owner. That is advisory.
Patil makes an interesting parallel between being a CAS advisor and imagining you’re on the client’s board of directors: You have the knowledge to help move the company forward, to connect the dots, and no one else can do that. That’s what being a successful CAS advisor is.
Do you have the CAS mindset?
What’s a CAS mindset and how do you know if you have it? Being in a CAS mindset is thinking like an internal management accountant, but for several companies. You’re not sitting from within one company — you’re sitting on the outside in a public accounting firm. Think of it like a corporate CAS practice.
Start by “getting back in touch with your core purpose,” Patil said. Get back to that place where you’re not just making a living, but where you’re making a positive impact on clients’ businesses, he advised.
Doing this requires you and your team to differentiate yourselves from what other public accountants are doing. Imagine you’re being hired in a corporate accounting department: You’ll have to identify and develop the skills necessary to be on that kind of team. You will likely need to upskill your team, too.
How to develop CAS skills
Younger staff aren’t being given the opportunities to develop certain skill sets that would enable them to succeed in advisory or CAS. Everyone on the team needs to learn to communicate, listen, understand, and make recommendations without needing to go through a partner.
Patil recommends a shadow practice. This means any time a more experienced CPA or accountant (like a manager or partner) is dealing with a client, include two staff members who will be processing that client’s work.
“Let them be a fly on the wall,” Patil said. “Don’t say anything. No notebooks, no note-taking, nothing. Just listen, so they know what the client is asking.”
The next part is where the upskilling really happens. When you get back to the office, or off the phone or Zoom, ask the staff to write up one page of what they learned. Ask them to recap what the partner asked the client to do, what their recommendations were, and why those recommendations should be put into practice. These interactions are more than just information-gathering or passing information back and forth, which is what a lot of staff-level accountants are limited to. This helps teach them how to have actual conversations!
Patil said that within three or four meetings, “The staff will be ready to connect the dots.”
Learning how to communicate is a skill upgrade, for sure. It’s on the firm to recognize that this upskilling needs to happen with the younger team members. This is how everyone can better understand what advisory is, how to have productive conversations, how to give recommendations to clients based on what they’re telling you and what you can see in the numbers that they can’t.
The shadow practice also comes in useful considering clients now have an expectation for instant answers. This is not always possible to provide immediate responses, but it doesn’t make it less frustrating for clients when they don’t have to wait around for a partner to answer something when another team member could just as easily do so. They just need to be trained to have those conversations. Empower your entire team to be closer to the clients.
CAS, change management and tech
Given how much CAS has taken off in the last several years, it’s almost a necessity for firms to be on board with this. If you’re not offering it, someone else will. If you’re not offering it well enough, someone else is. Clients will go to whoever can fill their needs. If you want to grow your firm, you need to be successful at CAS.
With competition increasing, one of the best ways you can get ahead, especially with CAS, is to automate. Accountants can’t afford to not automate. Patil has seen upwards of a 75% or more reduction in manual processing of CAS workflows when the processes are automated.
“To be competitive in this market, you’ve got to leverage technology to the hilt,” he said.
Look at changing who in your firm does what. Managers should not be doing bank reconciliations. Change management has to be part of a successful CAS practice.
Implementing CAS services is a really great way for accountants to make their practices better, grow their firms, and adapt and evolve with where the market is going. But you also need to recognize what it is that you’re trying to build, and help clients know what it is, too. You need to understand the roles that skill development, automation, and change management have in creating that successful advisory CAS practice. This doesn’t have to be the whole firm, but you know what? If you want to take these new processes and workflows and skills to everyone, that’s a great plan.
