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Building a Modern Client Accounting Services Practice

Joe Manzelli
Posted by Joe Manzelli on May 17, 2021 12:24:15 PM

Client Accounting Services (CAS) was once thought of as just bookkeeping, payroll, and after-the-fact reporting. Now, CAS covers more areas, including financial statement preparation, general ledger/trial balance, cash flow management, payroll, accounts payable and receivable, transaction processing, and business process outsourcing (BPO).

As the accounting industry has shifted towards additional consulting and advisory work, so has CAS, adding virtual CFO services, controllership, and business advisory services to the service menu. As this shift happened, CAS has emerged as one of the most profitable business lines for accounting firms, but why? Three key factors:

  • Cloud accounting technology has eliminated geographic limitations and supported additional service offerings.
  • Value pricing models have been adopted by successful CAS practices, creating long-term revenue streams.
  • BPO remote staffing has allowed accounting firms to become the entire back office for small businesses, providing outsourced CFO services and higher-level advisory services.

In order to support CAS growth, there is forever a need for additional capacity. Almost all CAS departments face the same eight challenges that decrease and restrict capacity:

  1. 1. high-pressure deadlines
  2. 2. handoffs
  3. 3. interdependencies
  4. 4. lack of visibility
  5. 5. work compression
  6. 6. competing priorities
  7. 7. manual processes
  8. 8. point solution struggles

To combat capacity restrictions and start to profitably scale your CAS practice, consider making these changes.

Build great business processes. 

Bottlenecks decrease capacity and productivity and are caused by a combination of an increased workload + ineffective process management. Increased workloads can arise from ever-changing regulations or business growth initiatives, while unclear expectations can lead to ineffective process management. Combat these inefficiencies and gain back capacity through better business processes. Build a great business process by:

  • Identifying the most effective business process,
  • Standardizing each process so that everyone knows how its done, and
  • Embedding the processes in day-to-day workflows through the use of technology.

Business process and technology can provide real-time visibility into all projects, tasks, due dates, and staff availability. Firms can reduce risk by utilizing an integrated and automated workflow solution that centralizes work tracking, optimizes business processes, and follows established processes.

Implement workflow to support the process

An effective CAS workflow platform should have six key elements:

1. Standardization: Establishing and embedding processes to make the work repeatable.
2. Delegation: Creating dynamic checklists that allow for parsing out work to more than one person on any particular task.
3. Communication: Tracking essential task-related knowledge and instructions; posting and answering questions and review points.
4. Predictability: Creating and managing recurring tasks to spread out workloads and know how much capacity the firm has to grow.
5. Collaboration: Easily assigning, reassigning, and managing staff work.  
6. Visibility: Knowing who has the task, what the task is, where it is in the process, when it is due, and why it isn't yet completed.

Find a niche

Accounting firms are finding that the best way to build a CAS practice is to focus on clients in a certain niche or specialty, such as franchise businesses or medical practices. Having a niche or specialty means there's no need to reinvent processes for each client, increasing efficiency.

Create a strong tech stack 

Start your review by taking inventory of the CAS technology stack. Focus on standardizing technology across all clients, scaling the overall tech stack back if necessary. Once the tech stack has been chosen, create a plan to implement/migrate tools with existing clients as necessary, including migrating client information into those systems.

Expand with tech-enabled services 

As the firm builds trust with clients and the firm's CAS capabilities mature, they can expand the practice to other industries. To supplement this growth, especially when experiencing capacity challenges, consider CAS remote outsourcing and tech-enabled services. Typically, firms seek CAS remote staffing due to recruiting or training challenges, a lack of capacity for incoming work, or transaction-heavy clients that they can't service internally.

Use data insights to drive growth

One way for a firm to ensure that its CAS practice is profitable is to implement a real-time analytics tool that can provide department-wide visibility. Look for a tool that can provide benchmarking data year over year, both within the firm and within the firm's peer group. It should be able to drill down to details, with dashboards showing how long it takes to complete tasks and which ones take the most time to complete, each staff member's performance, work for each client, or due dates for each task.

Topics: Modern Practice


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