A Guide to Client Accounting Services

Carl Coe

Thinking about offering client accounting services but not sure where to start?

In this beginner-friendly guide, we discuss what client accounting services are and how you can use this service line to generate another lucrative stream of revenue for your accounting firm.

Client Accounting Services

What are Client Accounting Services?

Before we define what client accounting services are, let’s dissect the term. You may be surprised to find out that the term “client accounting services” is just one of many designations used to describe this business model. It’s also called CAS, which is an acronym for client accounting services, or CAAS, which stands for client accounting advisory services. And, if that’s not enough to confuse you, this business model is also referred to as financial planning and analysis (FP&A) consulting.

To keep things simple, from this point forward, we’ll call it client advisory services, or CAS for short.

So what exactly is CAS?

CAS is a suite of expanded services that an accounting firm offers to its clients. It’s a service model that allows accounting firms to offer a wide range of accounting services beyond the traditional compliance services, such as tax preparation, or transactional services like bookkeeping.

If you look at CAS from an accounting client’s perspective, working with a CAS firm is similar to outsourcing all accounting needs to a team of financial experts. Instead of only seeing their accountant when it’s time to prepare tax documents, the accounting client will maintain an ongoing relationship with the CAS firm. The CAS firm may handle any or all of the client’s accounting needs, from payroll to strategic planning.

Because CAS is a relatively new business model, there’s no consensus on what services to offer. However, many CAS firms offer an entire suite of accounting and advisory services to fully replace the need to hire an in-house accountant. Some CAS firms even market themselves as virtual CFOs, and offer high-level services such as ongoing financial analysis and strategic planning. A CAS can even assist with acquisitions and mergers.

Here’s a rundown of common CAS services:

  • Accounting document management
  • Accounts payable and receivable
  • Acquisitions and mergers
  • Audits
  • Benchmarking
  • Bookkeeping
  • Budget development
  • Business plan development
  • Cash flow management
  • Controller services
  • Data analytics
  • Debt restructuring
  • Financial statement preparation
  • Forecasting
  • Outsourced Chief Financial Officer
  • Payroll
  • Reporting
  • Strategic planning
  • Success planning
  • Tax preparation and filing

CAS has changed the way that many accounting firms work with their clients.

In the past, CAS was considered by accounting firms to be a waste of time and resources that could be better spent on core accounting services. However, the rise of cloud-based accounting software has made CAS an affordable, revenue-generating, and easy-to-implement service line for accounting firms. And because most firms now use automated technology to handle tasks such as bookkeeping and reporting, offering client advisory services doesn’t cause a drain on human resources.

What are the Benefits of Offering Client Advisory Services?

Many accounting firms have extended their offerings beyond traditional or transaction services to now include CAS. But is it the right move for your accounting firm?

Let’s take a look at the biggest benefits you stand to gain from expanding or moving to a CAS model:

Higher Client Lifetime Value

If you do not offer client advisory services currently, you’re missing out on the opportunity to make more money per client. Your client may come to you for specialized services but attempt to do other financial activities, such as payroll, on their own (aided by the power of an accounting software). However, if you offer these additional services at a reasonable rate, your client will likely take the upgrade. This allows you to make more from your client than you would otherwise.

If you do not offer client advisory services currently, you're missing out on the opportunity to make more money per client. Click To Tweet

Easy Upsell

If you’ve managed to convert a prospect into a client, you’ve done the hard work. From there, it’s fairly easy to upsell your client on the idea of CAS. Why is it so easy? You’ve already earned their trust to handle the basics. And once they trust you with a little, it’s not a big leap to trust you with more.

To be successful, an upsell must add value to a client. By offering CAS as an upsell to your core service line, you can provide your clients with immediate value: A team of professional accountants that act as the client’s remote accounting department. Your upsell offer alleviates the client’s burden so they don’t have to tackle all of their other financial needs on their own.

Greater Client Retention

A client who’s only coming to you for tax preparation may or may not stick around. It’s anyone’s call. But, if your client has hired your accounting firm to handle all of their financial needs, they’ll be less likely to leave. Also, offering CAS improves your client retention rate. If you offer the accounting services that your client needs in one spot, they won’t have to venture elsewhere.

Become Your Client’s Trusted Advisor

When your client makes use of your CAS, you will become their trusted advisor. This is a major step (or maybe even a leap) beyond one-off accounting services. By offering CAS, you can provide a more comprehensive solution to all of your client’s financial needs.

Consider This Before Offering Client Advisory Services

CAS allows you to transform from “the tax preparer” to a virtual accounting department. And with that transformation comes all of the above benefits.

However, the move to or addition of CAS shouldn’t be done without careful consideration. Adding client advisory services will require a shift in the way that you do things.

First, you’ll need to rethink your pricing model, especially if you bill hourly. As we’ll discuss in the next section, hourly billing can repel CAS clients.

Another consideration is staffing. To be successful, you’ll need a dedicated CAS staff who can devote themselves to managing your retained clients’ financial needs. This is the most efficient use of your staff’s energy. Constantly shifting from CAS to other services can be mentally draining and led to inferior results.

Client Accounting Services

Best Practices for Operating Under a Client Accounting Services Model

Ready to shift into a CAS model? Here are few best practices to keep in mind:

Start With Your Technology

Before offering CAS, you need a solid practice management and accounting billing software to operate from. This software needs to do all of the heavy lifting. Not only should it help you manage projects and track your time, but it should also allow you to work seamlessly with your clients. You need an accounting practice management software that allows you to securely share documents with your clients and request their eSignatures by email. You need a client portal, but you also need a frictionless medium for contacting clients and managing their financial needs.

That’s where Mango Practice Management comes in. We’re an all-in-one project management software for accounting professionals. You can use Mango to ensure that you work well with clients and never miss a deadline. Mango contains everything you need to deliver a quality CAS experience every time and to every client.

Learn more about Mango Practice Management software here.

Say “Goodbye” to Hourly Billing

Hourly billing is still very useful for core accounting services. However, when you offer CAS, it’s better to use a different billing model, such as subscription-based, fixed, or even value pricing.

In a subscription model, your client will pay a recurring fee on a monthly, quarterly, or annually basis in order to access your CAS services.

With fixed pricing, the prices are set for each service ahead of time and remain the same, regardless of any outside factor, such as competitor pricing.

With value pricing, the price can fluctuate depending on a variety of factors, such as market demand or the client’s perceived value of CAS.

Why the shift from hourly billing?

Simply put, CAS clients don’t want to feel like they’re watching the clock when paying for additional accounting services. It’s more difficult to upsell accounting services that have no set amount. But if you offer a fixed fee, for example, your client will be more open to the idea because the cost won’t fluctuate.

When upselling, be prepared to educate your clients on what CAS is and how they (in particular) can benefit from using it. You’ll need to show your client that there’s a clear difference between CAS and your traditional accounting services.

Final Thoughts

Offering client accounting services is one of the best ways to increase the value you offer your clients. You can also help your client scale their business while you scale yours. Before diving into CAS, weigh the above benefits and considerations to determine if it’s the right move for your accounting firm at this time.

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