Client accounting services isn't just one of the most successful new practice areas an accounting firm can launch, says industry expert Jim Bourke: It can also turbo-charge a much wider advisory practice.
"CAS is a growth engine," Bourke told attendees at Accounting Today's Firm Growth Forum, held in San Diego this week. "It is the fuel to knock your advisory services out of the park – you have all of the keys to the kingdom. You know everything your clients are buying, and everything they're doing."
Bourke is managing director of advisory services at Top 100 Firm Withum, which launched its advisory practice seven years ago on the back of a very small CAS practice — and has since seen it explode. "Seven years ago we were a traditional audit and tax firm," he said. "We decided to start an advisory practice. The first piece was our CAS team, which had very little revenue, so we took CAS clients and put them in a place that was filled with people just doing client accounting services. Fast-forward to today, and we have $70 million in revenue in the space, from nothing. It can be a huge growth engine for your firm, and the start of an advisory practice."
"CAS practices today are perfectly positioned to drive growth," he said. "You have access to your client's world — you know everything they're doing."
Withum's original CAS practice laid the groundwork for a number of other advisory services. "A lot of what we're doing in advisory comes out of our CAS practice," Bourke explained, with the firm having added, among other offerings, transaction advisory, cybersecurity, risk-type work, health care consulting, and investment banking services. "We started with only CAS seven years ago, and now we've expanded into so many different areas."
Accountants start with strong relationships with their clients, and CAS only enhances that. "What's driving our profitability? Our client base," he said. "Your clients would rather buy something from you than from the guy down the street, if you can sell it to them. That's the advantage we have in the advisory space."
"Advisory sells best next to CAS," he added, "and advisory-based services are the way the profession is going to grow and become profitable."
AI in CAS
It's not just accountants' close client relationships that make now a great time for a growth strategy that leads through CAS to a broader set of strong advisory offerings. The implications of artificial intelligence, both positive and negative, also play a role.
On the downside, AI is automating much of what accountants do, and empowering competitors inside and outside the profession.
"We're going to see complete automation of the tax process," Bourke warned. "Think about what that does for the revenue stream of so many firms in our country that live on that tax revenue from February through April."
"There's so much competition in the marketplace today," he added, "Bigger firms are coming downmarket, leveraging AI to do work faster."
On the plus side, new technologies can also empower accountants themselves.
"AI in CAS — that's where you're going to get the most bang for your buck," said Bourke. "Think how quickly Claude or ChatGPT could find a variance [in a client's books] — and probably come up with an explanation for it."
What's more, AI will make finding and delivering valuable information to clients much easier. "Clients like seeing dashboards," he said. "At first, it took a lot of time to do these, but today, leveraging AI in a CAS practice to deliver real-time dashboards to clients on the metrics they want to see — that's priceless. That's how you differentiate yourself from other CAS practices."
Bourke suggested starting small by giving clients an 'Amazon experience' that lets them know where their work stands — such as exactly what stage their return is at in the tax preparation process.
"How many of you are giving your clients that kind of experience at your firm?" he asked. "AI gives you the ability to do that. That next-gen client — that's what they want."
Between the possibilities of CAS and advisory services, and the new capabilities arising from AI, Bourke is enthusiastic about the future.
"I often say I wish I was 22 years old and entering the profession all over again," he said. "Today we have some of the best technology around, and the biggest diversity of services."
