Go all in on CAS

By Tori Smith

The word holistic is derived from the Greek word holos, which means “entire” or “all.” A holistic approach is used in the practice of medicine, observing all parts of the body, not just physical symptoms.

But the holistic approach can apply to more than just people: CPAs can look at clients the same way.

“An organization is a living organism,” said Natalya Yashina, CPA. “You can’t just look at one arm and not at the other.” 

Through client advisory services (CAS), CPAs can take a holistic approach to a business’s structure, processes, needs and wants by offering meaningful services. 

Although services differ for each client, Natalya said it’s a “transactional service with a trusted advisor that helps the client plan for its future.” 

Natalya, who started performing CAS services amid the COVID-19 pandemic, came from a background with audit experience. She said she enjoyed getting to know the challenges of a client and creating relationships. 

Natalya’s passion sits in nonprofits, and she recently performed CAS services for one. The first step was to figure out the organization’s main priority before completing a holistic diagnosis of its challenges and creating an action plan. 

“Companies want high-impact solutions,” Natalya said. “They want solutions that solve specific problems. Everything is ever-changing after the pandemic, and you need to think of outside-of-the box solutions.”

Natalya recommends companies revisit their mission, vision and values every three years to make sure their actions align with their statements.

“There’s always time for improvement,” she said. 

Edward Warren, sales and marketing leader at Sage, said three tipping points increased the popularity of CAS:

1. The pandemic
2. The “Great Resignation” 
3. The recognition of a “new normal”

Edward also agreed with Natalya that CAS is a holistic diagnosis, stating that CAS is maintaining the “health of their business.”

Edward learned about the power of CAS through independent consulting, and if clients can afford this level of advice and strategic insight, he said they should take it. 

“It’s truly the best of both worlds," he said. “The work is steady all year and there is revenue every month.” 

The largest challenge Edward has seen with clients is ongoing staff challenges leading to an uptick in offshoring. 

“They can’t just continue doing things they used to,” Edward said. “You need to be agile and figure out what to do with CAS, AI and other tools.”

Gary Thomson, CPA, managing partner of Thomson Consulting, LLC, said although there are more traditional roles being used in CAS like basic bookkeeping, financial reporting, sales tax, and bill paying, advisory services are evolving.

“What’s evolving includes fractional and virtual controllers, CFO services, key performance indicator analytics, cash flow forecasting, and other advisory services,” Gary said. “They aren’t technical in nature but are important elements to allow financial groups within our clients to function well. We’re seeing a growth in CAS as a part of the ‘family office’ and I see that trend continuing.”

Gary said CAS is in “fast-paced innovation” due to new technology, improved processes and utilization of outsourced professionals. 

Edward agrees. He predicts a major shift in small and medium-sized businesses. 

According to the 2022 Tax Professionals Report from the Thomson Reuters Institute, 95% of accounting firm leaders say their clients want more business advisory services, but small and medium-sized companies may not have the finances available to afford it, or at least they think they don’t. 

CPA Practice Advisor recommends CPAs get over the accounting-only mindset and consider the value of CAS services.

“Our profession is changing drastically,” concurred John Minnich, CPA, CGMA, from Oodles of Help, in a 2021 VSCPA conference presentation.

It’s not a surprise that CAS has continued to grow and evolve with everything that clients desire.  

John said that traditional compliance has been based on what clients need — services like regulatory and compliance, adhering to rules and standards, audits, reviews and taxes.

His practice of interactive and innovative strategic business advisory focuses on more than what clients need — it’s what they desire. 

He said strategic business advisory is based on a “holistic, complete business model that’s in addition to financial services” — a blend of clients' needs and wants that takes a facilitative, proactive approach focusing on the client’s drives, passion and mission. 

John said using a strategic business advisory approach is like adopting a CFO mindset, consistently looking future-forward. 

Although CAS could show up in many ways for a variety of clients, John offers these five steps as you start advising clients.  

Step 1: Foundation meetings
These meetings are short and exploratory sessions that act as an introduction to your client (if you don’t previously know them). These meetings might look at areas of strategic and business performance to highlight where the client wants to start. 

Step 2: Discovery meetings 
Often facilitated on an annual basis with the client to communicate about their financial situation, these meetings are an opportunity to communicate your immediate observations. 

Step 3: Planning facilitations 
This step acts in two parts: an annual strategy plan and quarterly meetings with the client. Use the facilitations to discuss the business’s and owner’s wealth generation. 

Step 4: Implementation facilitations
This step also presents itself in multiple ways, whether that is management meetings or coaching opportunities. These meetings are tailored to the client’s wants and needs. 

Step 5: Performance review
There are many different types of reviews that could be performed, such as risk management review, top-line growth review, or people performance review, but what John sees most is a key performance review. A key performance review facilitates a greater understanding of your client’s key performance factors, helping them manage and measure their results.  

Of course, this is a beneficial service for clients, but what’s in it for you? You or your firm will be the client’s most trusted advisor. There is an enhanced perception of value, fulfillment and rewards, in addition to recurring fees at higher rates.

There are multiple opportunities for revenue, including advisory, coaching, compliance, consulting, facilitations, mentoring and training. 

Advisory services complement the existing traditional compliance model, making it a truly holistic approach.

Tori Smith is the VSCPA summer communication intern. She is a student at Ball State University in Indiana.
 

6 tips for starting an advisory practice

Looking for quick tips to start your own advisory practice? Here are six from the VSCPA!

1. Commit to spending the time it takes to develop an advisory service practice. 
2. Identify your target audience. 
3. Reassess your fee structure. 
4. Consider the technological investment that advisory services require. 
5. Follow any applicable standards and regulatory and compliance requirements of your advisory service area.
6. Obtain a credential in your advisory area.

Continue learning

• Article: “6 tips for starting an advisory practice”
• CPE webinar: “Pricing Client Accounting Services 2023
• Recorded conference session — “Position your firm as your client’s most trusted business advisor”