two people sitting side by side talking, one working on a laptop with a pen in hand and a pad of paper next to them.
Tax & AccountingJanuary 11, 2021

Make Profitable Client Accounting Services Your 2021 New Year's Resolution

By:

This post contains highlights from a December 08, 2020 webinar discussing the bottlenecks that hinder growth in Client Accounting Services (CAS), and what steps are necessary to create more capacity to focus on the growth of your CAS offerings.

To watch the webinar on-demand, click here

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 eliminated geographic limitations and supported additional service offerings.
  • Value pricing models were adopted by successful CAS practices, creating long-term revenue streams.
  • BPO remote staffing 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:

  • high-pressure deadlines
  • handoffs
  • interdependencies
  • lack of visibility
  • work compression
  • competing priorities
  • manual processes
  • point solution struggles

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

Build a great business process. Bottlenecks decrease capacity and productivity and arise from 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:

  1. Identifying the most effective business process,
  2. Standardizing each process so that everyone knows how it's done, and
  3. 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 completed yet.

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 onto those systems.

Improve client onboarding. Review existing onboarding processes, focusing on potential bottlenecks or inefficiencies. Document and standardize the processes, making sure to test that service delivery plans work seamlessly with the onboarding processes.

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.

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.

Watch the webinar on-demand to learn more about how firms of all sizes are scaling up their CAS offerings and increasing profitability by leveraging workflow technologies to automate their processes, become more efficient, and increase capacity.

 

Solutions for Tax & Accounting Professionals

Tax, accounting, workflow, and firm management solutions to help your firm succeed, with the research tools you need to stay informed.