“CAS” is the buzzword du jour in the accounting industry. Short for “client advisory services,” it’s something all the experts are saying accountants should be offering. But aside from the decade-old “compliance is dead” argument, few are really telling accountants why they should be offering these advisory services.
The value of CAS
According to Amy Bridges, professional development manager for CPA.com, the mean gross profit margin for CAS grew from 34% to 47% between 2018 and 2020. The profit margins for more traditional accounting services also grew during this time…but only by 6% (from 28% to 34%.)
Why did CAS grow at more than double the rate of traditional accounting services?
- CAS is valued higher by clients. Over the past two years, clients have grown more aware of the help their accountants can provide. Accountants had a unique opportunity during the pandemic to step up and prove their worth, and as a result many businesses that otherwise might have failed, thrived. This real-life experience has led to business owners being more willing to invest in advisory services.
- CAS is valued higher by accountants. As they were helping their clients survive and even thrive, accountants started realizing clients really are willing to pay for their unique knowledge and business insights. This realization came at a time when accountants were experiencing a high burnout rate, exacerbated by changing legislation, moving deadlines, and staffing shortages. As a result, accountants started looking for ways to earn the same – or more – money without working themselves to the bone to do it.
In short, we’re in the midst of a once-in-a-lifetime opportunity where what clients need and are willing to pay well for aligns with services accountants want to provide. And accountants can charge premium rates for these services while still ensuring their clients get an ROI on their investment.
But what is CAS?
Like its predecessor, known simply as “advisory,” CAS has a definition so broad as to be almost undefined. Depending on who you ask, CAS can mean:
- Budgeting and forecasting
- Accounts payable management
- Technology management and training
- Payroll and HR services
- Cash flow management
- Financial statement preparation and review
- CFO services…which has become sort of a catchall term for all the above
At its core, CAS – like advisory – goes beyond data entry, reconciliation, and tax returns and extends to strategic work with your clients.
How can CAS have the most impact?
Software developers would have you believe CAS is a matter of having the best dashboard for your clients to use. Traditional accounting organizations will tell you CAS is all about teaching your clients how to interpret and use their financial statements.
But business owners don’t necessarily want a fancy dashboard or to learn how to read financial statements. What they do want is an advisor who will help them look ahead and make predictions about how to move their business forward profitably. A combination of “real time” reporting and advising and future-focused guidance will have the most impact for businesses.
In other words, business owners want you to help them the way you helped them during the pandemic.
In our next article, we’ll take a look at some of the future-focused advisory services you can add to your firm’s offerings now that the world is returning to “normal.”