six reasons you need it, no matter the size of your firm.
by hitendra patil
the definitive success guide to client accounting services
before we get to why firms can’t miss out on cas, we need to know why business owners buy accounting software, even when their core business is not accounting.
more: survey: why some firms fall behind in cas | how cas makes firms better | cas: finding the why behind the why | how to lead clients into client accounting services | cas begins with a mindset
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in the years before the internet, accounting software was only desktop software. businesses used it to run their business processes – to issue checks, record income, and for some other processes. business owners predominantly did transactions processing, leaving the financial accounting – and compliance – to professional accountants.
more likely than not, business owners had no option but to get the transaction processing done themselves or by their staff, many times by those who had no accounting education. no wonder, then, that business owners sending “messy books” to accountants was a common experience.
business owners had accountants come to their offices and do the “real” accounting. or they gave an “accountant’s copy” of the software to their accountants – for “cleaning up” and “making adjustments.” it was not possible for business owners, their staff, and the outside accountants to work together collaboratively in real-time, or even in near real-time, on the same accounting database, unless all of them were at the same office/premises.
the result was inefficient, expensive, inaccurate, outdated accounting information – used mainly for compliance purposes, and only rarely for any timely business decision-making – and invariably, messy books. more importantly, business owners perceived that they could do what accountants do – and that perception commoditized the pricing/fees for accounting services.
fortunately, the birth of the internet planted the seeds for the birth of the cloud.
the cloud-enabled the accounting software to be used from anywhere, anytime. business owners, their staff, and outside accountants could now use the same software at the same time.
desktop accounting software forced and constrained business owners to use it from their premises. unfortunately, even with cloud accounting software, business owners and their staff mostly continue to issue checks, create invoices, record income, and so on. accountants can quickly take over all this work if clients are made aware of the benefits of doing so.
the cloud makes it possible – no, it makes it inevitable – for smart business owners to focus on their core business and let professional accountants take care of accounting, including transactional work (to be done accurately).
this new possibility gives rise to cas opportunities for accountants to work in collaboration with business owners in real-time.
cas is one of the fastest-growing new revenue segments of many top 100 firms, but the cas opportunity is more relevant and more available to smaller accounting firms!
why is cas a great new revenue growth opportunity?
here are some of the critical factors that make cas a more significant opportunity for accountants, and for their clients, too:
- cas is stickier: as accountants process transactions in real-time in collaboration with business owners, the sheer increase in the number of interactions between them – and the increased ability of accountants to help business owners make timely and better business decisions – means cas is a much “stickier” service. it is not easy for business owners to replace or recreate the value that cas delivers.
- cas elevates accountants: as more and more advice is given, more frequently than before, accountants become top of mind, and that helps truly elevate them as their clients’ most trusted advisors.
- cas changes clients’ perspective about accounting itself: previously, business owners saw outsourced accounting, which was essentially after-the-fact work, as more of an essential expense/cost. therefore, business owners wanted to reduce the cost of it. now, as cas delivers more decision-support intelligence, the value that business owners receive from their accounting information makes it a win-win. increasingly, clients will not perceive accounting purely as a cost. they will see cas as an investment.
- cas is more cash: from a client who more or less fits the cas model, your revenue, as a ballpark estimate (based on the experience of several firms), can triple. so, if your firm earned $4,000 to $5,000 a year in write-up work, cas can earn you $12,000 to $15,000 from the same client.
- cas multiplies your clientele: as you manage some key business processes for your cas client, you interact with your client’s vendors and customers. those businesses, in turn, become your best prospects to sell your cas offering. even a small business, other than a mom-and-pop shop, can easily have an average of 20 vendors and 50-100 customers. imagine the multiple of your total “warm” lead-pool – and compute the impact on your revenue and profit if you manage to get just 10 percent of this captive audience!
- cas provides superior revenue growth: the survey results revealed that 77 percent of the firms that offer cas agree that cas provides superior revenue growth. my interactions with cas firms indicate that it is the pace of revenue growth as well as the quantum of growth that makes cas a revenue-superior service offering for accounting firms.
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- one of the key reasons for superior revenue growth is the higher time and costs a firm would otherwise incur in generating revenue growth if it did not offer cas. without cas, the firm must get more new clients to grow the revenue. several surveys and research reports across various industries indicate that it is 5-25x more expensive (and time-consuming) to get new clients compared to retaining existing clients. in the accounting profession, upselling/cross-selling to existing clients is not only possible but is easier. it is easier because accountants can see the business insights, at times even before the business owner can see them, to learn which services the clients may need in the near term and in the future.
- accountants have easier access to the decision-makers at clients’ businesses. compare that to the difficulties salespeople face in reaching the decision-makers at “prospect” companies.
- when accountants offer cas to clients, their interactions with decision-makers increase. it leads to more familiarity, deepening of accountant-client relationships, and the resultant increase in trust as well as “top of mind” recall.
some surveys in the accounting profession indicate that cas firm clients refer more prospects than those by non-cas firm clients.