A Comprehensive Guide to Client Accounting Services
Thinking about offering client accounting services but not sure where to start?
In this beginner-friendly guide, we discuss what client accounting services (CAS) are. We'll also break down how you can use this service line to generate another lucrative stream of revenue for your accounting firm.
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. It can also be synonymous with client 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 accounting 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 traditional compliance services like 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 fundamental functions like payroll to more nuanced client advisory services such as strategic planning.
Because CAS is a relatively new approach, there's no clear consensus on which services should be included or offered. However, many CAS firms offer an entire suite of client accounting and advisory services to fully replace the need to hire an in-house accountant. Some CAS firms even market themselves as virtual CFOs, offering high-level services such as ongoing financial analysis, strategic planning, and assistance 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
- 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.
Cloud technology now enables the implementation of automated accounting services that would otherwise be manually intensive. This efficiency frees up human resources so you can zero in on higher-value tasks, such as customer relationship management and strategic growth initiatives.
Key Benefits of Offering Client Accounting Services
Many accounting firms have extended their offerings beyond traditional or transaction services to include CAS. But is it the right move for your accounting firm?
Let's take a look at the biggest advantages you stand to gain from expanding or moving to a CAS model:
Higher Client Lifetime Value
If you do not currently offer client accounting services, 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 solution). 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 currently offer CAS or client accounting services, you're missing out on the opportunity to make more money per client. Share on X
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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.
You might also think that clients are resistant to fee increases. In reality, their main concern is likely whether they will receive a good return on their investment. Thus, to successfully upsell client accounting services, you must clearly distinguish them from traditional ones. Demonstrate the added value of CAS: a team of professional accountants serving as your client's remote accounting department. That's one immediate and decisive competitive edge that enhances client trust, streamlines their financial operations, and drives long-term business growth.
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 client accounting services 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.
Elevated Role as a Trusted Advisor
When your client makes use of your firm's client accounting services, they will see you as a trusted advisor for the long haul. This is a major step (or maybe even a leap) beyond one-off accounting services. By offering CAS, you elevate your role from a tax preparer to an integral part of your client's financial operations.
Being seen as a strategic partner enhances your professional reputation. Your expertise and insights are recognized and valued, leading to more referrals and a more prominent presence in the market. With deeper relationships and an enhanced reputation from your expansion to client accounting services, opportunities for more challenging and rewarding work
Enhanced Scalability for Your Practice
The CAS model allows you to provide precisely what your clients need at each specific stage of their business growth. This modular approach lets you start with basic services and expand to more complex offerings as your client's requirements evolve. For example, a startup might initially need just bookkeeping, but as it scales, you can add services like detailed financial modeling and business performance reviews. By offering tailored client accounting services, you can cater to the unique needs of each client, ensuring that your services align with their specific goals and objectives.
The recurring revenue model of CAS also stabilizes cash flow. As a result, accountants can better manage their resources and plan for long-term investments, such as hiring additional staff or upgrading technology. These investments can, in turn, further drive growth momentum.
5 Best Practices for Operating Under a Client Accounting Services Model
The move to or addition of CAS shouldn't be done without careful consideration. This expansion requires a shift in the way you do things. Realize the potential of client accounting services to grow your practice with these key strategies and best practices:
1. Start with the Right Software
Before offering CAS, you need a solid practice management and accounting billing software to operate from. That's because client accounting services require robust technology to streamline operations and improve efficiency. By adopting project management for accounting firms, you can automate tasks, track progress, and make data-driven decisions to drive business growth.
When choosing the right practice management solution for your firm, look for one that can help you streamline your daily processes and deliver client accounting services optimally. For instance, Mango Practice Management's project management software offers automatic notifications to ensure that staff are promptly informed about high-priority tasks, both overdue and upcoming. This can help enhance overall task management.
The platform's time-tracking options also integrate smoothly with project management workflows, allowing firms to monitor resource allocation effectively and ensure that time is spent judiciously.
Additionally, your accounting practice management software should enable you to securely share documents with your clients and request their eSignatures by email. Mango Practice Management is not only a client portal but also a frictionless medium for contacting clients and managing their financial needs.
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2. Rethink Your Billing Model
Hourly billing is still very useful for core accounting services. However, when you offer CAS, it's better to use a different pricing 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 annual basis to access your client accounting services. With fixed pricing, the rates 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 rates can fluctuate depending on a variety of factors, such as market demand or the client's perceived value of CAS.
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 client 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 they can anticipate and manage the costs.
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.
3. Create a Dedicated CAS Team
Another consideration is staffing. Constantly shifting from CAS to other services can be mentally draining and lead to inferior results. To be successful, you'll need a dedicated CAS staff who can devote themselves to managing your retained clients' financial needs.
Equip your CAS team to swiftly adapt to the complexities of client accounting services. For instance, invest in providing them with specialized training in areas like project management for accountants and advanced financial reporting. Ensure accessibility by offering these training sessions in flexible formats, including in-person, online, and self-paced modules.
4. Leverage Real-Time Reporting
Implementing real-time reporting in your accounting practice can significantly enhance your business operations. Real-time dashboards and advanced visual tools provide your team with immediate and comprehensive access to financial data, allowing for continuous monitoring of cash flows and performance metrics. This capability enables your practice to make swift, data-driven decisions, improving overall efficiency and responsiveness.
5. Shore up on Security
Robust security measures and secure client portals are essential to protect sensitive financial data and maintain client trust. Here are several safeguards you can put in place when offering CAS:
- Implement encryption to safeguard data both in transit and at rest.
- Secure access controls, such as multi-factor authentication and role-based permissions.
- Conduct regular security and compliance audits to address system vulnerabilities and stay aligned with industry standards like the General Data Protection Regulation (GDPR) and Service Organization Control 2 (SOC 2).
- Utilize compliant technologies like secure cloud-based platforms.
- Clearly explain to your clients how you use their data and make sure to get their prior consent.
By integrating these protocols, you can protect your clients and build a reputation for reliability
Outpace the Competition: Deliver Seamless CAS with Mango Practice Management
Expanding to client accounting services is one of the best ways to increase the value you offer your clients. You can also help your clients scale their business as you scale yours. Before diving into client accounting services, weigh the above benefits and considerations to determine if it's the right move for your accounting firm at this stage of your practice.
Make decision time effortless by partnering with Mango Practice Management. We're an all-in-one project management software developed by accountants, for accountants. At Mango, we understand your exact concerns, from staying compliant with ever-changing regulations to managing a demanding client roster-it can be a lot. We know because we've been in your shoes. That's why we've created a platform with all the tools to streamline your practice and deliver exceptional client accounting services anywhere, anytime.
Schedule your free demo today and discover how you can stand out from the crowd.
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