Advisory Services 101: How to Launch CAS at Your CPA firm?

26 May 2023

The demand for advisory services is growing rapidly in the USA. A 2020 survey found that almost 29% of clients claimed they needed CAS, and nearly 68% wished that strategic consulting was a service offered by their CPA firm. Additionally, the survey found that CPA firms that offered the service were paid 43% more by their clients.

So, what drives the growth of the advisory services market?

• The increasing complexity of the business environment
• The need for businesses to improve their financial performance
• The growing demand for strategic advice from CPAs

The growth of the advisory services market presents a significant opportunity for CPAs. CPAs can differentiate themselves from their competition by offering advisory services and attracting new clients. Additionally, advisory services can be a substantial source of revenue for CPA firms.

Advisory services can be a great way to differentiate yourself from your competition, attract new clients, and grow your business. Firms that offer CAS have been shown to be highly profitable, with median profit margins reaching 34% across all firms and an impressive 47% for top performers.

What are Advisory Services?

Advisory services are a broad range of services that CPAs can offer to their clients beyond traditional accounting and auditing services. It refers to a range of professional consulting services experts provide to assist individuals, businesses, or organizations in making informed decisions, improving performance, and achieving their goals. These services go beyond traditional accounting and financial services and focus on offering clients strategic guidance, insights, and recommendations.

What do Advisory Services Include?

Advisory services can cover various areas depending on the needs and objectives of the client. Some common types of advisory services include:

• Strategy and Management Consulting: Assisting clients in developing and implementing effective business strategies, improving operational efficiency, and optimizing organizational performance.
• Financial Advisory: Guiding financial planning, investment strategies, mergers and acquisitions, risk management, and capital structure optimization.
• Technology Consulting: Helping clients leverage technology solutions to streamline processes, enhance productivity, implement systems, and improve cybersecurity.
• Risk and Compliance Advisory: Assisting clients in identifying, assessing, and managing risks, ensuring compliance with relevant regulations, and establishing effective internal control systems.
• Human Resources Consulting: Offering expertise in talent acquisition, performance management, employee training and development, compensation and benefits, and organizational design.
• Sustainability and Environmental Consulting: Guiding sustainable business practices, environmental impact assessments, energy efficiency, and corporate social responsibility.

Advisory services typically involve in-depth analysis, research, and collaboration with clients to understand their unique circumstances, goals, and challenges. The advisory team then provides actionable recommendations, strategies, and solutions tailored to the client’s needs, aiming to drive growth, enhance competitiveness, and optimize overall performance.

WHAT ARE CLIENT ADVISORY SERVICES?

CAS, or Client Advisory Services, is a specific advisory service that focuses on helping clients improve their financial performance. CAS services can include:

• Financial analysis
• Cost-savings initiatives
• Process improvement
• Strategic planning
• Business development

By launching advisory services (CAS – Client Accounting Services), CPA firms can tap into new revenue streams, strengthen client relationships, and differentiate themselves in a competitive market. Read on to explore a comprehensive step-by-step guide on successfully launching CAS at your CPA firm, ensuring you deliver fresh, relevant, accurate, and engaging services to your clients.

10 STEPS TO STARTING YOUR OWN CAS OFFERING:

1. Understand Your Clients’ Needs: To launch successful advisory services, begin by understanding your client’s pain points, challenges, and aspirations. Conduct surveys and interviews, and analyze client data to identify areas where you can provide valuable insights and support.
2. Define Your Service Offerings: Define the specific advisory services you will offer based on your clients’ needs. Consider areas such as financial forecasting, cash flow management, budgeting, strategic planning, tax planning, technology consulting, and business process improvement. Align your services with your firm’s expertise and resources.
3. Develop a Comprehensive Business Plan: Create a detailed business plan outlining your target market, service offerings, pricing structure, marketing strategies, and projected financials. This plan will serve as a roadmap for your CAS launch and help you stay focused and accountable.
4. Build a Dedicated CAS Team: Assemble a team of professionals with the right expertise and skills to deliver advisory services. This team may include certified management accountants, financial analysts, tax specialists, technology consultants, and business strategists. Ensure they are trained in client communication and possess the necessary soft skills.
5. Invest in Technology: Adopt accounting software, data analytics tools, and other technologies that streamline CAS processes and enable efficient data management. Implement cloud-based solutions for enhanced collaboration, data security, and remote access.
6. Establish Client Engagement Processes: Develop client onboarding processes, engagement letters, and service agreements that clearly outline the scope of advisory services, deliverables, timelines, and pricing. Regularly communicate with clients to provide updates, discuss progress, and address concerns.
7. Promote Your CAS Offering: Create a marketing strategy to raise awareness about your CAS services. Leverage your website, social media platforms, and industry-specific publications to showcase your expertise, success stories, and the benefits of your advisory services. Consider hosting webinars, speaking at conferences, and networking with potential clients.
8. Provide Thought Leadership: Position your firm as a thought leader by publishing insightful articles, blog posts, and whitepapers on advisory topics. Share your expertise through webinars, podcasts, and guest speaking engagements. This establishes credibility and attracts clients seeking professional guidance.
9. Monitor and Optimize: Monitor your CAS performance, gather client feedback, and adapt your services accordingly. Track key metrics such as client satisfaction, engagement profitability, and referral rates. Regularly review and update your business plan to align with market trends and evolving client needs.
10. Cultivate Long-Term Client Relationships: Building strong, long-term relationships is essential for the success of your CAS. Regularly communicate with clients, provide value-added insights, and proactively identify opportunities to assist them in achieving their financial goals. Continually demonstrate your commitment to their success.

WHEN SHOULD YOU START OFFERING CLIENT ADVISORY SERVICES AT YOUR CPA FIRM?

In the ever-evolving landscape of the accounting profession, the time is ripe for CPAs to seize new opportunities and expand their service offerings. Client advisory services (CAS) are the catalyst that can propel your CPA firm into a future of growth, innovation, and client satisfaction. But when is the right time to embark on this transformative journey?

The answer is now.

Today’s clients are hungry for more than just compliance and financial reporting. They yearn for trusted advisors who can guide them through complex business challenges, provide strategic insights, and help them achieve their goals—launching CAS positions you as a proactive partner who exceeds the numbers, offering comprehensive and tailored solutions that address your client’s unique needs.

But don’t wait for the perfect moment to arrive. The truth is, there will never be a “perfect” time. The accounting landscape continuously evolves, and your client’s demands constantly change. By embracing CAS now, you demonstrate your commitment to staying ahead of the curve and meeting your clients’ evolving expectations head-on.

Launching CAS is not just about adding another service to your portfolio. It’s about transforming your firm’s mindset and embracing a new way of doing business. It’s about recognizing the immense value you can provide beyond traditional accounting services and leveraging your expertise to become a trusted advisor. By making this strategic move, you position your firm at the forefront of the industry, distinguishing yourself from competitors and solidifying your reputation as a forward-thinking CPA firm. Your clients will appreciate the added value you bring to the table, and they will reward you with long-term loyalty and referrals.

WRAPPING UP

Are you hesitant to launch new services at your accounting and bookkeeping firm due to concerns about resource allocation? What if I told you there’s a model for client advisory services (CAS) that leverages your existing resources, potentially transforming your business’s growth trajectory?

Client demand for more comprehensive services is on the rise. Per the 2022 Tax Professionals Report by the Thomson Reuters Institute, 95% of accounting firm leaders acknowledge that their clients seek additional business advisory services. Yet, many small and mid-sized firms shy away from adding advisory services due to perceived high costs, disruption, and risks.

However, what if CAS could be introduced without significant investments or drastic changes, instead utilizing your firm’s established client relationships, expertise, and technology?

Overcoming Mental Barriers

Launching CAS requires a shift in mindset, moving away from a solely accounting-focused approach. It’s essential to overcome two common mental roadblocks:

The Accounting-Only Mindset: While accounting may be your core focus, it doesn’t mean that advisory services are outside your domain. Combining your existing activities into a digestible deliverable allows you to integrate advisory or consulting services into your client offerings seamlessly.

Underestimating Client Needs and Willingness to Pay: CAS packages can encompass a range of critical services, such as financial statement preparation, cash flow management, transaction processing, virtual CFO services, controllership, and business advisory. Rather than calculating hourly rates, consider the value you bring to your clients by providing insights and organization to their financial operations.

Leverage Your Existing Resources

You can initiate CAS by capitalizing on your firm’s resources, including client relationships, internal expertise, and technology:

• Relationships: Strong client relationships are built on shared energy and connections. Cultivate these connections and use the insights gained from client conversations and financial data to launch CAS successfully.
• Expertise: Your team has developed industry-specific knowledge through serving clients. Leverage this expertise to identify which clients would benefit most from CAS and tailor your services accordingly.
• Technology: Streamlining your workflow is essential before implementing CAS. By adopting standardized to-do lists, automation, workflows, and dashboards, you can free up research, forecasting, and consulting time. Explore your firm’s technology tools, such as expense management, customer relationship management (CRM), forecasting and budgeting, human capital management (HR), workflows, dashboards, and niche resources relevant to your clients’ industries or operating models.

Start with Simplicity

Introduce CAS gradually, starting with a select group of your best or long-term clients. Offer initial discounts for the first few months to showcase the value of CAS and refine your processes and deliverables. Focus on forecasting, margin, inventory, and cash flow management using your existing technology tools. Track year-over-year or month-over-month trends, industry benchmarks, and any concerning deltas or red flags, providing best practice recommendations for improvement. Identify technologies that could enhance CAS or your clients’ operations and prioritize them based on cost analyses.

Transform Your Firm with CAS

By embracing CAS, you can transition from a compliance-focused approach to becoming a forward-facing client partner. Analyzing and deciphering their data, you provide valuable insights for informed decision-making. As accountants, you are uniquely positioned to deliver value-added services, leveraging your existing relationships, expertise, and technology.

Don’t let the fear of resource constraints hold you back. Explore the untapped potential of CAS and position your CPA firm for future success.

Harness the Power of Outsourcing for Client Advisory Services

Outsourcing compliance work can be a strategic move for CPA firms looking to shift their focus toward client advisory services (CAS). By delegating routine compliance tasks to external professionals, your firm can free up valuable time and resources for more strategic and high-value client engagements.

Outsourcing compliance work allows your firm to streamline operations, increase efficiency, and reduce overhead costs. With compliance tasks in capable hands, your team can redirect their energy towards cultivating deeper client relationships, conducting in-depth financial analysis, and providing strategic advice. This shift enables you to position yourself as a trusted advisor who offers comprehensive business insights and solutions, catering to the evolving needs of your clients.

By embracing outsourcing, your firm can achieve a balanced workload, ensuring compliance requirements and client advisory services receive the attention they deserve. This strategic approach allows you to deliver exceptional value to your clients and positions your firm as a dynamic and forward-thinking leader in the accounting industry.

Outsourcing compliance work can be the catalyst that propels your firm towards a CAS-focused future, driving growth and creating new opportunities for your practice. By leveraging the expertise of external professionals, you can optimize your resources, enhance client satisfaction, and ultimately elevate your firm’s reputation as a trusted advisor in client advisory services.

Vishal Shah

With 13 years of experience in accounting and bookkeeping, Vishal Shah leads QX’s accounting operations, managing a 65+ member team. He specializes in process efficiency, quality control, and client delivery across industries, including SaaS, real estate, and workforce management. Vishal’s leadership drives scale, speed, and client satisfaction for CPA firms.

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