When a client approaches you with a question that extends beyond the scope of accounting compliance, it’s time to pay attention. This signals an unmet need—a golden opportunity to develop a new relationship through accounting advisory services that you simply cannot afford to overlook.
Client Accounting and Advisory Services (CAAS) isn’t a novel concept, yet many accounting and tax firms remain unaware of the substantial revenue growth they can achieve by including accounting advisory in their service portfolio.
To illustrate what you might be missing by not monetizing these services, consider the 2023 revenue figures from the Big 4 firms, which show that over $80 billion comes from consulting services alone.
You can see the visualization of revenue segment of the Big 4 Accounting Firms here.
Also, you can expand the service portfolio and monetize the client accounting advisory that you might be giving for free already.
In this article, I will discuss:
By tapping into the potential of accounting advisory, you can unlock new revenue streams and enhance client relationships.
Compliance is about the past; advisory services are about shaping the future.
If you’re running an accounting firm, chances are you’ve already heard the buzz around client accounting advisory services (CAAS).
And there are many other variations of the term CAS.
The term “CAS” can refer to different concepts, such as Client Accounting Services or Client Advisory Services, which often creates confusion in the industry. Another common acronym is CAAS (Client Accounting and Advisory Services), which combines both “Client Advisory Services” and “Client Accounting Services.”
The interpretation of CAS varies depending on who you ask. In the accounting industry, there’s a growing emphasis on firms becoming strategic advisors. However, not every firm possesses the necessary expertise to do so effectively.
Advising should extend beyond just tax reduction and basic financial reporting; it should include comprehensive support for broader financial decision-making.
Accounting firms that excel in advisory services can bundle subscription offerings that integrate both accounting and advisory elements. They can create packages that feature strategic advisory meetings—whether monthly, quarterly, or otherwise—to deliver ongoing value to clients.
If your firm is handling compliance accounting while also providing strategic advisory services in areas like budgeting, tax planning, and cash flow management, then the acronym CAAS perfectly represents your capabilities.
You might be wondering, “Why should I bother adding advisory services to my firm’s offerings?” The answer is simple: because it makes sense.
Adding accounting advisory services to your portfolio can give a revenue boost to your firm and help break out of the traditional mold of compliance work.
In a world where the accounting landscape is rapidly evolving, staying ahead of the curve is important. So, let’s dive into why your accounting firm should seriously consider taking the leap into advisory services.
And the reasons go way beyond the beliefs “Compliance is dead” and “AI will replace accountants”
There are two compelling reasons to dive into financial accounting advisory services:
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By incorporating financial accounting advisory services into your service portfolio, you open the door to increased revenue and cultivate stronger client relationships.
Compliance is a necessary aspect of accounting; clients must adhere to mandates. Effective compliance provides peace of mind, saves time, and keeps businesses in good standing with the IRS. However, quantifying these benefits in terms of marketing can be challenging.
On the other hand, advisory services are quantifiable. For example, you can clearly demonstrate the value by stating, “Save X in taxes by paying me Y.” Here, Y is a fraction of the cost of X, making it easy for clients to see the value and happily invest in your advisory services.
1. Premium Fees
One of the most compelling reasons to offer advisory services is the potential for higher profit margins. Unlike compliance services, which often face price compression due to their commoditized nature, advisory services allow you to charge premium fees.
Why? Because clients are willing to pay more for personalized advice that directly impacts their financial well-being. When you can demonstrate the value of your expertise, you’re no longer just a service provider—you’re a trusted advisor. This shift allows you to move away from the race to the bottom on pricing and instead focus on delivering high-value services that justify a higher fee.
2. Firm Growth
Advisory services are also a significant driver of firm growth. By offering services that clients want—like strategic tax planning or outsourced CFO services—you position your firm as a valuable partner in their success. This not only helps in client retention but also attracts new clients who are looking for more than just basic accounting services.
Essentially, you’re setting your firm up as a one-stop shop for financial expertise, which can be a powerful selling point in a crowded market.
Advisory services present one of the most important growth opportunities for firms.
3. Added Value for Clients
Now, Clients expect more from their accounting firms than just number-crunching. They want proactive advice that can help them navigate financial challenges and seize opportunities.
By offering advisory services, you provide added value that goes beyond what traditional accounting services can offer. This makes your firm indispensable to your clients, and let’s be honest—who doesn’t want to be indispensable?
4. Diversification of Services
Relying solely on compliance work is risky business. Seasonality, economic downturns, and changes in tax laws can all impact your revenue stream. Diversifying your service offerings with advisory services helps mitigate these risks by tapping into new revenue streams.
This diversification makes your firm more resilient and better equipped to handle market fluctuations. In other words, you’re not putting all your eggs in one basket.
5. Competitive Advantage
As more firms begin to offer advisory services, those that don’t risk being left behind. The accounting industry is no longer just about balancing books and filing taxes—it’s about offering strategic insights that can help clients grow their businesses. By integrating advisory services into your practice, you differentiate yourself from competitors who only provide traditional accounting services. This competitive edge can be the key to winning new business and retaining existing clients.
6. Future-Proofing Your Practice
The accounting industry is changing at a rapid pace, and firms that fail to adapt may find themselves struggling to keep up. By offering advisory services, you future proof your practice by aligning with the needs and expectations of modern clients. This proactive approach ensures that your firm remains relevant and profitable in the years to come. Plus, it positions you as a forward-thinking firm that’s ready to tackle whatever the future holds.
So, you’re convinced that offering advisory services is a good move—what next? The transition doesn’t have to be overwhelming, but it does require some planning. Here are a few actionable steps to help you get started:
Tip – At Credfino, we leverage Fathom and Reach Reporting to enhance our CFO clients’ advisory services.
We favor Fathom for its forecasting and reporting capabilities, while Reach Reporting excels for clients with custom reporting needs.
Our fees for reporting are included in our “Month-End Review and Reporting” service, which offers options for basic, standard, and advanced packages. Our clients then charge their clients based on the complexity of the accounts and the reporting required.
Looking for the perfect partner to help you navigate the change? Let’s connect!
Taking the leap into advisory services isn’t just about adding another line to your list of offerings—it’s about transforming your accounting firm into a modern, client-focused business that’s ready to thrive in an ever-changing industry.
Not only does it benefit your clients, but it also positions your firm for greater success in a competitive industry.
So, what are you waiting for? Now is the time to explore how your firm can integrate advisory services and reap the benefits they offer.
Looking for a partner to navigate through the transition? Let’s talk!
First things first—what exactly are advisory services in the context of accounting? Unlike standard compliance work, such as preparing tax returns and financial statements, advisory services involve providing expert advice and strategic insights to help your clients achieve their financial goals. Whether it’s through tax planning, cash flow forecasting, business performance reviews, or strategic financial management, the goal is to add value by offering solutions that can significantly improve your clients’ financial health and business success.
An advisory accountant helps businesses by providing financial advice and support. They analyze financial data, assist with budgeting and forecasting, and help manage cash flow. They also guide clients on tax planning, identify risks, and suggest ways to improve business performance.
Their goal is to help businesses make informed decisions and achieve financial success, going beyond traditional accounting tasks to add real value.
The term “CAS” can refer to different concepts, such as Client Accounting Services or Client Advisory Services, which often creates confusion in the industry. Another common acronym is CAAS (Client Accounting and Advisory Services), which combines both “Client Advisory Services” and “Client Accounting Services.”
The interpretation of CAS varies depending on who you ask. In the accounting industry, there’s a growing emphasis on firms becoming strategic advisors. However, not every firm possesses the necessary expertise to do so effectively.
With these LinkedIn tips, you won’t just know why LinkedIn works—you’ll have actionable strategies to start bringing in business for your accounting and tax firm.
Jackie launched her CPA firm back in 2012. After 11 years of running her firm, she finally made the leap to partner with an offshore CPA back office. Why?
If your offshore tax accountant is doing these 7 things, it’s time for a break-up because you are not in a healthy offshore accounting partnership.
