4 steps to building a successful CAS practice in a traditional CPA firm

By Anita Dennis

Client advisory services (CAS) is one of the fastest-growing practice areas in the accountancy profession, with consistent double-digit revenue growth in recent years. However, a CAS practice functions differently than the traditional compliance-based practice and can't be built or managed the same way. That means CAS practice leaders may encounter challenges when trying to grow a successful practice within a traditional full-service firm.

Kalil Merhib, vice president of growth and professional services at CPA.com, and Matt Gardner, CPA, the CEO and co-founder of hiline, a CAS practice that evolved from a boutique accounting and strategy firm, suggest the following four tips for integrating a CAS practice into a traditional firm:

Begin with a solid road map. Firms should develop a comprehensive go-to market strategy, a plan to successfully launch the service area that supports high growth. To help brand and promote a CAS practice, it may require, among other things, educating customers and prospects on what CAS encompasses, the value it can offer, and how to get the most out of it.

"Customers don't realize this service is an option," Gardner said. The go-to-market strategy should address marketing and sales so that CAS practices are able to quickly move prospects through the sales pipeline, close the deal to deliver, and expand the relationship going forward. "That's a very different way of thinking for CPAs," he said.

The strategy should also set limits on the number of technology solutions the firm will support and include a profile of the optimal customer. Both can enable firms to standardize processes — an important best practice for CAS practices — and achieve greater efficiency and profitability.

Don't shortchange the change management process. Creating something completely different within an existing firm can be tricky. It's also challenging to ensure that the new entity can keep on transforming as needed. Merhib recommended following a continual improvement cycle that includes:

  • An assessment of where you stand. Review how the firm functions now and potential challenges and opportunities for the CAS practice.
  • Prioritizing initiatives that will mitigate risks and capitalize on opportunities for the practice. This can include communicating the value of CAS to other firm members to promote cooperation and acceptance.   
  • Developing a strong execution plan that's measured and adjusted continually.

Create a dedicated CAS team. CAS practices provide ongoing service for customers, which means they require consistently available resources. That's one reason why team members should not be pulled away from the practice to support other areas during busy season or any other time, according to Merhib. "Advisory services should be a priority," he said.

Because of their deep involvement in client businesses, CAS practices should include people with strength in general business skills, according to Gardner, such as project management, stakeholder management, and the ability to run an effective meeting.

Realize that new approaches require new benchmarks. The measures used to evaluate a CAS practice's health and performance may look different from what's used in a traditional practice. They should include indicators that focus on lifetime performance and value rather than on the profitability of a project at a set point in time. Such indicators can include customer acquisition cost, recurring revenue, or the lifetime value of clients, according to Merhib. Because CAS practices often use a subscription billing model, the timeline to go live with a client is another important KPI. "Every month it takes you to go live is a month when you didn't receive your CAS subscription fee," he said.

Greater client loyalty, enhanced staff engagement, and improved efficiency are some of the many benefits that a CAS practice can offer.

Both Merhib and Gardner will be part of a panel discussion on "Growing CAS Within a Full-Service Traditional Firm" at the Digital CPA Conference 2022, which will take place in Austin, Texas, on Dec. 4–7. The in-person event is sold out, but you can still register to attend online.

For over a decade, the Digital CPA Conference has been the premier event for forward-thinking accounting professionals who are ready to shape the future of the profession. You'll experience 35+ actionable sessions, gain insight into the latest accounting technology and trends, earn up to 14.5 CPE credits virtually, and learn what's next for the accounting profession.

— Anita Dennis is a freelance writer based in New Jersey. To comment on this article or to suggest an idea for another article, contact Courtney Vien at Courtney.Vien@aicpa-cima.com.

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