Art of Accounting: Guide to client accounting services

This column is a review of an exciting new book,The Definitive Success Guide to Client Accounting Services (CAS), by Hitendra R. Patil. I remember calling Hitendra a few years ago about an article he wrote about CAS to ask him what CAS stood for. Today CAS is an essential service that can only grow much further than it has already.

CAS is outsourced accounting services performed for clients replacing their internal bookkeeping and accounting department. This allows clients to divest themselves of non-core functions, relieving them to concentrate on the important revenue-producing functions they established their businesses to do. This also applies to not-for-profit organizations so they are freed up to put their energies into their central missions.

This sounds like a simple premise, and it is. It’s surprising that this took so long to become a service accounting firms are going all in to offer. Actually, when I started my practice, most of what I did was CAS, except we called it write-ups and we whispered that we did this. At that time it wasn’t considered “professional,” but it was the bread and butter for most of us. On my first job I showed up at a client at 9:00 a.m. I wrote up their accounting books by taking the transactions from the checkbook, entering the checks and deposits, and doing a bank reconciliation for each bank account. I entered the sales invoices and customer payments in an accounts receivable ledger and wrote out the statements to mail to the customers (I even stuffed them in the mailing envelopes).

I entered the payroll after the fact but left the client with a listing of what checks to write each week for their employees until my next scheduled visit. Then I calculated the tax payments and wrote those checks. I posted everything to the general ledger, took off a trial balance and prepared a financial statement. I also made out the sales tax and payroll tax returns, wrote those checks and sat with the client for a few minutes while he signed everything, including my boss’s check. I brought the check back to the office, along with the financial statement I prepared for my boss to review, have typed and meet and discuss with the client.

Some larger clients had bookkeepers, but I still posted the general ledger and prepared the tax forms. Somehow this worked well. As clients grew they added bookkeepers and then controllers, but my boss functioned as the CFO and primary business advisor. At some point computer processes were used. That added changes and iterations and reduced the “pencil pushing,” but while my work changed, my boss’s did not. He remained the client’s trusted advisor, but with even more data, information, tools and the ability to provide it quicker and closer to the time when the activities occurred. I started out performing CAS, and today most of the smaller and many of the larger firms are adding this service with many aggressively promoting it.

CAS, as Hitendra explains it, is a cookie-cutter service for the repetitive portion of the services and an advisory service for the more valuable guidance and support that business and NFP clients need, at costs that are materially less than the value provided. The author makes the argument that accounting is not a services profession, but a knowledge profession with services the mechanism to deliver the benefits of our knowledge. It’s a veritable how-to book with descriptions and explanations on how to perform each step along the way, and how to market, charge for and use CAS to establish the framework for becoming the client’s trusted advisor. Even if you do not want to offer such services (who wouldn’t?), it’s a good guide to managing an accounting practice or a niche segment regardless of the niche you want to introduce. There are also downloadable spreadsheets and charts.

This is an excellent book and I highly recommend it to not only be read and absorbed but also to then be used as a reference source thereafter.

The book was published by CPA Trendlines and when you order it, you can get a 25% discount by using my discount code EdSentMe.

Do not hesitate to contact me at [email protected] with your practice management questions or about engagements you might not be able to perform.