Client Advisory Services 101: What are they? Why should you offer them?

What are Client Advisory Services (CAS)? The AICPA defines advisory as services where the practitioner “develops findings, conclusions, and recommendations for client consideration and decision making.”

A more practical description comes from firm owners themselves: “taking client challenges and applying strategies to create opportunities in service to their growth.”

If your accountant’s brain is confused by the breadth of those definitions, you’re not alone! Within that ambiguity lies opportunity. As their most trusted advisor, you are uniquely positioned to have a positive influence on the trajectory of your clients’ businesses. Yes, transaction processing is needed. Yes, compliance services are required. Those are simply foundational pieces. Your clients want and need more.

What do CAS include?

CAS include a wide array of services that depend on the specific needs of each client, including cash flow forecasting, budgeting, technology implementation, industry benchmarking, business valuations, and tax planning. Ultimately, advisory services are any form of advice regularly given to a client in relation to their business.

The list of potential services is as diverse as the specific needs of your client base. Whether it involves pricing, sales, hiring, or expansion, clients are looking for a professional who can explain future-looking forecasts, and help them use that knowledge in their business decisions.

Adding value for clients

Technological changes are upending the industry in many ways. What hasn’t changed is the level of trust small business owners place in their accountants. Through the pandemic, accounting professionals became therapists, coaches, and partners to their clients, helping them navigate the most significant economic downturn they’d ever known.

Clients look to their accountant for answers to questions ranging from how to pay an employee, how cash flow will affect a loan application, and even how to use accounting software. While technology can generate more data and often better information, your clients need you to help them understand that information and apply it in ways that make sense for their business.

Why is now the best time to consider adding CAS?

Working in accounting can be a rewarding endeavor, professionally and personally. If you’re anything like me, you find fulfillment in helping businesses thrive by keeping their financials in order.

Accounting firms have always provided valuable information to their clients through financial statements and tax returns. However, the assembling of this information is becoming more automated and commoditized by the day.

Next-generation accounting tools powered by machine learning are processing transactions and analyzing data with greater efficiency, which is devaluing traditional bookkeeping and tax preparation services.

You don’t have to look any further than a recent investment by Amazon founder Jeff Bezos in an accounting startup called Pilot ($1.2 billion valuation) to understand that the field of accounting is in the midst of a sea change with far-reaching impacts on firms that serve SMB clients. You may already recognize this trend in subtle ways through conversations with prospective clients who are beginning to care less about how and more about how much.

How does offering CAS benefit firms?

According to a report in CPA Practice Advisor, 42% of accounting firms are already providing some level of advisory services, from cash flow management to outsourced CFO services. 

Another recent survey reported in the Journal of Accountancy that firms offering Client Advisory Services experienced a 20% growth rate of net client fees per professional. Advisory services offer the perfect opportunity to move from hourly billing to value-based pricing.

That aligns with findings from CPA.com that states buyers are willing to pay more to address their most significant challenges, including business owners who said they would be willing to pay up to 20% more if advisory services were offered to them. 

In addition, the 2021 Rosenberg Survey summarizes by saying, “Advisory services continues to be one of the critical areas of growth for accounting firms.”

The future of accounting firms is clear: Advisory services present a huge opportunity for accountants to develop deeper, more valuable, and profitable relationships with their clients. If you haven’t already done so, now is the time to prepare and launch these services.

Learn more about Client Advisory Services

Building your Client Advisory Services offering is about people, processes, and technology. Download our Grow Your Firm CAS eBook to learn more, or read more about these elements in our client advisory services series:

People

• Building client advisory services? The future of CAS is people-first
• Business strategy drives people strategy: How to leverage your team
• Could your firm’s structure use an update? Do it before you hire
• Your firm’s client advisory services offering starts with people
• Find your ideal clients and understand their business goals
• An effective Client Advisory Services team has these 4 roles 

Processes

• A culture of learning could make or break your firm—choose to thrive
• Offering Client Advisory Services across the business lifecycle
• Value-based pricing
• To niche or not to niche: That is the question
• How to avoid scope creep in your advisory engagements
• How to identify your ideal client advisory services prospects

Technology

• 4 ways to build your ideal advisory app stack