Client Accounting Services - The Definitive Guide - Future Firm

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Client Accounting Services: The De nitive Guide

AUGUST 19, 2020 | IN PRACTICE MANAGEMENT | BY RYAN LAZANIS
This post is going to describe what client accounting services are and how to launch this offering in
your own rm.
(Step-by-step)
In fact, I attribute being able to quickly scale my rm from scratch to sale in just 5 years mostly due to
the client accounting services (CAS) offering in place.
So in today’s post, I’m going to show you exactly what CAS is and how exactly I’d recommend getting
started: 
Whats is CAS?
Bene ts of CAS
Step #1: Master the Core Technology ABOUT WORK WITH ME NEWSLETTER BLOG CONTACT    
Step #2: Adjust Your Sales Process
Step #3: Bundle CAS into a Subscription Offer
Step #4: Develop Standardized CAS Delivery Processes
Step #5: Develop SOP’s for each Client
Step #6: Plan Your Capacity
Step #7: Invest in Reskilling
What are Client Accounting Services?

You’ll nd a whole slew of de nitions of CAS on the internet.
But let’s keep it simple.
CAS is simply where you act as an outsourced accounting department for your client.
Think about what an internal accounting department handles:
Bookkeeping
Bill pay
Collecting receivables 
Processing payroll
Managing cash ow
Preparing nancial statements ABOUT WORK WITH ME NEWSLETTER BLOG CONTACT    
The above work is usually performed by an accounting technician and controller on a weekly or
monthly recurring basis (rather than annually).
Some would also say that CFO-level work should be included in a CAS offering, but I actually believe
that it ts more within an advisory offering. While that argument can be made, for the purposes of this
article, I’m sticking more with technician and controller work.
Over the years, rms have not wanted to offer this kind of service. It was viewed as low-margin,
ine cient, and a distraction from the core audit, tax & advisory offerings.
But the tides are turning.
Based on a recent Accounting Today Top 100 Firms article, CAS was one of the fastest-growing service
niches:


Bene ts of Cloud Accounting Services
Here are just a few:
Easy Upsell into Advisory
If you’re essentially your client’s accounting department, you have a pretty good nger on the pulse of
the business to be able to easily spot advisory upsell opportunities.
Demand is High
According to a recent Xero survey, 77% of business owners would pay someone to stop doing many
CAS-related activities. This seems like an easy sell.


Standardizing Your Firm is Far Easier
When you standardize, you can scale. One of the keys to standardization is eliminating as many
variables as possible. When you provide client accounting
ABOUT WORK services,
WITH ME youNEWSLETTER
control the workBLOG
ow andCONTACT
the    
data. The more you control internally, the more you can standardize.
Here’s what I had to say in my article on the 11 tactics to automate your rm:

Increased Client Stickiness

The more services you surround your client with, the harder it is for them to leave
Greater E ciencies on Compliance Work

It’s a lot faster to complete your compliance work when you’ve been the one handling the books and
payroll. These time savings translate to cost savings, WORK
ABOUT boosting
WITHmargins.
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Improved Customer Experience
Client Accounting Services help foster a closer, deeper relationship with your clients as you are an
integral part of their day-to-day business.
How to Get Started with Client Accounting Services

Step #1 – Master the Core Technology
A solid CAS offering can only be successful when you’re automating as much as possible.
Punching numbers into a computer is dead.
One of the reasons why CAS is growing so fast is because technology can be leveraged to handle the
heavy lifting of data entry. You then essentially become a manager of work ows.
And while there are tons of cloud accounting apps out there to help you automate these work ows,
you’ll need to pick your core apps and become a power user of those apps.

At a minimum, you’ll need to leverage cloud accounting software to automate the bookkeeping and to
act as your automation hub for all other work ows that you’ll be taking over for your client.
When it comes to cloud accounting software, consider Xero:
Or QuickBooks Online:

Past that, my suggestion is to ease into the technology by mastering 2-3 move apps that integrate with
Xero/QBO, depending on the work ows you’re taking over as part of your CAS offering.
If you’re looking to automate expense management, consider Receipt Bank:

Or Hubdoc:

For payroll, check out Gusto in the US:

Or Wagepoint in Canada:

And these apps are really just the tip of the iceberg…
The point is to identify your core technology at the beginning and master them in order to be able to
leverage the automation bene ts necessary for CAS. 
Step #2 – Adjust Your Sales Process

The needs analysis that you’ll perform when offering a CAS service will greatly differ from a needs
analysis that you perform when you’re selling a tax plan
ABOUT or aWITH
WORK onceMEa year nancial statement.
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That’s because, at the core of it, client accounting services centers around taking over work ows. And
a successful CAS offering should make those work ows as smooth and as e cient as possible.
So the sales process has to assess their current work ows and be able to visualize what the ideal
work ows will look like, all supported by the right technology identi ed in Step #1 above.
Here are examples of processes that you’ll need to understand depending on the CAS offering:
The revenue streams, how invoices are created and how money is collected
Types of expenses and how bills are paid
How many employees the company has, how often payroll is run, how the payroll le is assembled
and how payroll is paid out
Etc.
In this step, you really need to visualize how you’ll take over those work ows and how you’ll improve
your client’s current situation. This is basically what they’re paying you for.
Step #3 – Bundle Client Accounting Services into a Subscription 

Offer
Because you’re now delivering value and services on a recurring basis, you’re in a great position to start
charging your clients a monthly subscription.
And to do that, you’ll need to productize your services.
A good way to think of it is to de ne, upfront, the services, apps, and support that you’ll perform on a
regular basis and then determine a monthly price for your services.
Here’s an example of how Bean Ninjas in Australia productized their bookkeeping offer:

Step #4 – Develop Standardized Client Accounting Services

Delivery Processes
CAS can be a very repetitive kind of service offer. So the key to success, your margins, and your client’s 
satisfaction is to ensure that each repetitive process is delivered in the same way, each and every time.
This is actually easier than it sounds. The problem is that most rms don’t take the time to process
map upfront. ABOUT WORK WITH ME NEWSLETTER BLOG CONTACT    
It’s simple.
a) Take someone experienced on the team that has performed that task countless times
b) Ask them to write out the detailed steps (with screenshots) to perform that task the next time it
needs to be completed
Example:

c) Review the steps to see if anything can be optimized and adjust the process as necessary
d) Store these processes in a central location (ie. a knowledge base) for everyone to refer to
e) Train the team
f) Review the process quarterly to make sure it’s being tweaked for further optimizations
If the service is totally new and item a) can’t be done, then handle the service yourself in that rst one 
or two periods, work out the kinks, and document things yourself.
That’s it.
Step #5 – Develop a Standard Operating Procedure for Each Client
In Step #4, you’ll have developed a rm-wide standard operating procedure (SOP).
But we all know that each client is unique.
The trick in this step is to document each client’s uniqueness in how their processes might be handled.
For instance:
If payroll needs to be approved by your client’s CFO and you keep sending it to their COO, your client will
become frustrated.
Likewise:
If your client wants their rent expense to be split between 2 different GL accounts and your team keeps
putting it to just 1, again, your client will not be happy.
So it’s up to you to (reasonably) document the uniqueness of each client to ensure consistency of the
delivery of CAS for each client across your rm.

Step #6 – Plan Your Capacity
This step is near and dear to my heart, though 99% of accounting rms out there have little to no
capacity planning processes in place to ensure
ABOUTthat: WORK WITH ME NEWSLETTER BLOG CONTACT    
The work promised is delivered on time

Their team is not overworked
This is especially important when it comes to CAS services because, week in, week out, CAS services
need to routinely go out like clockwork. Missing a week of payroll for your client because your team is
overworked would be unacceptable and would be grounds for the client to seek help elsewhere.
The basic thing you want to model out is your team’s available capacity, in hours, compared to the
forecasted capacity requirements promised to your clients.
A good accounting practice management system, like Teamwork, should be able to help in this area:

Step #7 – Invest in Reskilling

If your rm is looking to move more heavily into CAS, it will be worth reskilling your team.
As Client Accounting Services are offered weekly or monthly, compared to many other compliance
services that are performed annually, there’s an entirely new dynamic that your rm must get used to.

I believe upskilling/reskilling in the following areas could be useful:

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ABOUT WORK WITH ME NEWSLETTER BLOG CONTACT    

Client Accounting Services: The De nitive Guide

What are Client Accounting Services?

But let’s keep it simple.

Think about what an internal accounting department handles:

But the tides are turning.

Easy Upsell into Advisory

Increased Client Stickiness

Greater E ciencies on Compliance Work

Improved Customer Experience

How to Get Started with Client Accounting Services

Punching numbers into a computer is dead.

If you’re looking to automate expense management, consider Receipt Bank:

For payroll, check out Gusto in the US:

Step #2 – Adjust Your Sales Process

Step #3 – Bundle Client Accounting Services into a Subscription 

And to do that, you’ll need to productize your services.

Step #4 – Develop Standardized Client Accounting Services

e) Train the team

But we all know that each client is unique.

The work promised is delivered on time

Step #7 – Invest in Reskilling

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