As CAS grows to be as important and central a service offering as tax and attest, how is that going to affect how firms operate? Will we see CAS-only firms? How can firms integrate their service offerings as their relative size changes? And what will CAS's newfound importance mean for its position inside the firm?
Transcription:
Dan Hood (00:00:14):
Good morning. I think it's morning for just about everybody, or it will be for another 10 minutes or so. Thank you all for joining us at today's CAS Virtual Summit. It's our second virtual summit of the year. We did one on private equity a little earlier, but this is one we've done now—this is our third year with the CAS Summit. We're excited about it. I want to thank you all for joining us. This is a topic that is, I think it's still safe to say, super, super hot in the accounting profession. It is an area that for many firms is growing much faster than some of the more traditional aspects of the practice. It's an area of excitement. It's also an area of evolution and change and, in some cases, revolution where we're noticing as we talk to CAS pioneers and people who are just starting out that it's often changing as they go through it.
(00:01:00):
It's changing. There is definitely a sense that we're discovering on a regular basis new and better ways to run a CAS practice, new and better ways to serve clients through the CAS medium, new definitions for CAS, right? We've gone from client accounting services to client advisory services to client accounting and advisory services, to all the different definitions. One of the things we're going to do in a couple of our panels is ask our panelists today to share their definitions of CAS because it's fascinating how different they are. There are obviously a lot of commonalities, but there is a practice area with a thousand different little ways it can be different from firm to firm. We're pretty excited about that. That said, it is our third annual, I think it's our third annual.
(00:01:46):
It's definitely our third. One of the things I will say is because CAS has been around now long enough, this will not be an intro-level set of CAS sessions. I don't think it'll be too far advanced for anybody to follow, but we're sort of assuming that there's a certain sense that people have a basic idea of what CAS is. I think it's been around long enough and it's talked about enough, and we've had enough of these kinds of sessions for people to understand the basic idea that it is you interacting with your clients, handling their accounting, always through the cloud, powered by cloud accounting software, but allowing you to be their back office to whatever degree as an accounting firm you want to be. It can be just basically doing the basic accounting and bookkeeping.
(00:02:32):
You can add all kinds of other back-office services, from payroll to invoicing, et cetera, up to a point where it becomes client advisory services where you're doing that foundation of the back-office work, but you're adding all kinds of advisory services to it. You can be an outsourced CFO, you can have all kinds of other business advisory services. Like I said, it's a pretty broad area. We're assuming that people are coming in with that definition or some sense of it. So what we're going to be doing today is talking in three separate sessions. Two of them are specifically just about how to make a CAS practice better and what the future of CAS might look like, because we said it's an area of tremendous evolution and revolution. So we're going to start by saying, "Hey, how do you make your current CAS practice better?"
(00:03:19):
Then on our third session, we'll look a little bit at how CAS is going to change in the near future. Obviously, we are not guaranteeing anything. The future is unpredictable, but we're just going to give a sense of where it's going or where people think it's going and how CAS practices can prepare for that, whether they're just starting out or whether they've been around for a long time, because as I said, it's an area that's changing a lot. In the middle, the second session, we're going to be talking about ways in which you can offshore and outsource elements of the CAS practice. Obviously, outsourcing and offshoring are things you can do for a lot of the things that accountants do. We're going to be looking at them specifically through the lens of a CAS practice. What parts of a CAS service make sense to take offshore, and ways in which you can do it.
(00:04:02):
We've got two firms that both own their own or built their own offshore services, so it's going to be a really interesting wrinkle they've put on it. Like I said, the basic elements of how you can use that to help create capacity for a CAS practice. CAS practices are suffering the capacity issues that every other practice area in accounting is suffering, and with their own individual wrinkles on it. One of the things that we'll undoubtedly, I think, talk about is the degree to which, "How much do you need accountants to do this work? Can other people do this work? Can non-accountants, non-CPAs do it? How can you bring that in to ease capacity issues and so on?" So that's just a brief overview of what today's all about. Like I said, I don't think anybody who's new to CAS will be lost, but we'll be a little bit more advanced.
(00:04:53):
Maybe "intermediate" will be the way to look at it, so we're hoping you'll get a lot out of it. I do want to quickly thank our sponsors, Canopy, Bill, Ignition, and TaxMetric, for helping us put this on today. I want to thank you all for joining us, and I want to quickly run through our CPE rules. We are happy to offer credit for this. There are a couple of rules you need to follow. I'm looking up; I've got another screen up here. The rules for CPE are slightly different, but mostly the same. Obviously, you have to stay for each of the sessions. CPE credit is available for each of the three sessions.
(00:05:32):
For each one, you need to stay through the entire length of it. You also need to answer all the polling questions that we'll be asking in each session. We'll try to make that as clear as possible. We'll make it easier for you to answer so you can all get the CPE. Once you've done that, there is a form in the attendee hub where you go between sessions that you need to fill out and get back to us no later than August 18th, which is next week. Once you get the form, we'll send you a certificate of completion with all your credits on it within two weeks. If you have any questions, you might want to reach out to Heather Nielsen, N-I-E-L-S-E-N, at horizon.com. If you have any problems with the form, can't find the form, or if you don't get your certificate or have any other issues, that's going to be your first line of recourse.
(00:06:26):
With that, I should probably just say one last thing before we dive in is to let you know that in between sessions—that's the thing I wanted to talk about—in between sessions, once we wrap up this session, you're going to leave this room and go back to the attendee hub, to the agenda to find the link for the next session. Similarly, after the second session, you'll go back to the attendee hub to find the agenda to get into the third session, if you're joining us for all three. Like I said, each one is available for CPE individually. I think that's all of our housekeeping items. With that, it's a little early because we had a little more time for opening remarks maybe than I needed, though Jody Grunden is probably looking at me going, "Hey, you almost filled most of that time," which is fair once I start rambling. But we did want to set the stage for today's session.
(00:07:22):
We got a lot of interesting stuff, and I wanted to make sure everyone understood where we're going with it and where we're coming from. With that, I want to dive right into our first session. This is "Taking CAS to the Next Level." Like I said in the introduction, it's a little bit about what are you doing with your current practice, what are you doing to make it better, what are the best practices, strategies, tips, and tactics for making your current CAS practice for boosting, "turbocharging" is the word I always end up using. It's a little bit of a cliché, but given the growth rates within CAS, turbocharging probably isn't as much of a cliché here; it's actually pretty appropriate. CAS practices are going fast and furious, and it's pretty exciting stuff. So here to talk about all that, we've got a great set of panelists. I'm just going to give you their names and their firms, and then I'm going to ask them to introduce themselves a little more fully, more about themselves, more about their firms, so we get a sense of their type and size of firms that you'd be able to say, "Hey, who fits best with me, or who's whom I most interested in?" Kicking it off with Destiny Flood of AAFCPAs.
(00:08:21):
Destiny, thanks for joining us.
Destiny Flood (00:08:23):
Yes, thank you so much for having me. Very happy to be here. It's a privilege. A little bit about myself: I am a partner at AAFCPAs. We are a Top 100 firm, predominantly based in New England, and we provide a very wide range of services, including all kinds of advisory, audit, and tax. I co-lead our CAS group with my fellow partner, Joyce Zi. I lead the commercial practice, and she leads the nonprofit practice. We've been a very rapidly growing CAS practice that's had rapid growth the last several years. We now have a team of just over 60 people, a little over 200 clients, with three partners and six CFOs, and team members from transactional accountant through controller and CFO level. I had the privilege of joining the firm two years ago. I was formerly an audit partner, so I've had a lot of fun transitioning to the advisory space. Thanks again for having me.
Dan Hood (00:09:30):
Thanks for joining us. Next up, I mentioned that Jody Grunden was in the house. So, Jody from Anders. Tell us a little about yourself and your firm and your practice.
Jody Grunden (00:09:41):
Yeah, Dan, thanks for having me on. My path is very similar to Destiny's. I am a partner at Anders, a Top 100 accounting firm, and a leader of our virtual CFO service line with my co-founder, Adam Hale. We founded Summit CPA Group way back in 2002, and that merged into Anders right about three years ago. So we've been with Anders for now three years. So a standalone CAS practice now with a Top 100 firm. We created our subscription-based billing model back in 2004—a weekly subscription base. We don't bill by the hour, and haven't billed by the hour. We do track time, but no billings, which is kind of a neat practice, and that was way before it was even socially acceptable. That's when Netflix came out with theirs. We've got about 200 clients across the United States, very similar to Destiny, as well as internationally. I've written a couple of books, Digital Dollars and Cents and Building the Virtual CFO Firm in the Cloud, basically just to really help other folks like yourself learn how we did it and what we're doing and the mistakes that we've done. So hopefully this presentation helps you guys out there.
Dan Hood (00:10:53):
Excellent. That's the goal. All right, thank you. Last, but only alphabetically, is Anna Masker of Dark Horse. Anna, thanks for joining us.
Anna Masker (00:11:01):
Oh, thanks for having me. So I'm Anna Masker. I'm the SVP of CAS Development here at Dark Horse. Dark Horse isn't your traditional accounting firm, as you can tell by our name. Our firm is more of a platform-style firm, so we give CPAs control and autonomy over building their own practice. We're really addressing the need that we saw in the market where the traditional partnership model of public accounting wasn't working for a lot of CPAs, and they got disgruntled and wanted to leave, but starting their own firm was a little bit more challenging once they started thinking about all the things they needed to do to do that. So our firm provides a platform, including coaching and tools and templates and workflows and everything for our CPAs who are building their own practices underneath our Dark Horse umbrella. Our firm is growing super fast. Obviously, it's resonating within the market.
(00:11:57):
We were a million dollars in revenue five years ago, and we're going to hit about 20 million this year, so massive growth. My background, I've been in the CAS space for about 18 years. I had two practices. One was a traditional CAS practice, and then I pivoted and focused on crypto accounting and CAS services for the crypto space for a few years. Now, my role at Dark Horse is to help our principals build out our CAS practices, helping them, especially our CAS accelerators, to help build their practices and provide the coaching and the tools and the templates to enhance our platform even further. As far as our services go, we do everything similar to Jody and Destiny. We do cash basis accounting all the way through CFO services and everything in between. Thanks for having me.
Dan Hood (00:12:48):
Excellent. Thanks for joining us. One of the things that for me emerges from all you're talking about yourselves is two themes: tremendous growth in the CAS area, but also the longevity. I think for a lot of people, they think of CAS as something, and for a lot of firms it's certainly true that it really started during the pandemic for a lot of firms that launched because of client need. But it is worth, I think you said 18 years, Jody, I know you've been doing it for a long, long, long time. This is a thing that has been around for two and a half decades, and in other firms, it goes back even further. So it's one of those things worth remembering: it has been around for longer than I think a lot of people necessarily know and has been a strong contender all that time, a strong performer all that time. With that, and recognizing that length of time, I want to, as I said before, get your definitions of CAS. We don't need to spend a huge amount of time on it, but just a quick sense of when you think of CAS. Jody, I'll let you go first on this one. What's your definition of CAS?
Jody Grunden (00:13:50):
Yeah, it's a great question. Our definition, like I said, it's going to vary from person to person, but what we look at, you can look at an ideal client side or ideal client when you're looking at CAS. So I look at CAS, we look from everything from the lowest end, which is a bookkeeping type service, to the highest end, which is a strategic virtual CFO service. CAS can be really anything in between. What we don't view as CAS is we don't look at projects. CAS for us is a recurring model, and we do it even on a subscription basis. So it's a subscription-based model, and we actually did it on a weekly basis. So it's a weekly subscription base. Our clients stay with us for four and a half, five years, usually until they merge or sell or whatever. So I would say really from as smallest as bookkeeping to as great as a really strategic leader that's going to be sitting alongside either the controller, an existing accounting department, or side by side with the CFO, being their FP&A person.
Dan Hood (00:14:50):
Gotcha. Excellent. Anna, how about you? What's your definition of CAS?
Anna Masker (00:14:55):
Similar to Jody, I mean, the gamut runs from simple to super complex. Although we also do the project work. One piece that I think gets overlooked a lot when defining what CAS services is, is this accounting operations component where you're taking a small business, for example, who started small and grew, but the back office and the financials got left behind. So helping them automate and streamline their accounting processes, helping them structure their accounting team roles, responsibilities, what tech stack to put in is also another component of CAS beyond just the bookkeeping and the closes and the CFO services, too. So we'll do that kind of on a project basis or ongoing, or we weave that into our subscription model as well. So that's another component for us.
Dan Hood (00:15:48):
Gotcha. All right, Destiny.
Destiny Flood (00:15:50):
Yeah.
Dan Hood (00:15:50):
How do you guys think about CAS?
Destiny Flood (00:15:52):
Yeah, it's a fun question, and I agree with you. I think you hear a different definition from a lot of different firms. So we actually rebranded our department two years ago. We called it "managed accounting services," similar to CAS. Now, we call it "outsourced accounting and fractional CFO services." We did that to try and align to the buyer. We want to really let the client know, let the business owner and founder know that we are a whole outsourced finance solution rather than the traditional CAS services. We do everything similar to Jody and Anna. We do everything from the very small, just some cleanup work to help get clients ready for their tax return, all the way through full outsourced finance solutions.
(00:16:42):
I like to say that we are a great value-added service because we let business owners stay in their zone of genius so they can focus on growing their business, running their day-to-day, getting clients, and hopefully not losing sleep over their accounting. For us, every client is a snowflake. So we're very, very creative and can be very flexible. I think that's one of our differentiators. We don't do a lot of temp work, but we can come in for certain short periods or during transaction periods as that may seem fit. We work remotely. I actually have the honor of leading a team from California, from across the country, and our clients are nationwide and international, also. So we highly leverage cloud-based and automation solutions. On our team, a lot of us in our group are former auditors, so we provide a lot of audit liaison support, so audit readiness for our clients, technical accounting, essentially the heavy lifting on that, more technical GAAP accounting components.
Dan Hood (00:17:58):
Right. It's fascinating as you all describe it, the number of different ways you can serve clients, but it's still perfectly within the CAS umbrella is fascinating, and it's one of the neat aspects of it. It's the huge flexibility within it to include whatever you're comfortable and interested in, and whatever your clients need that you're comfortable and interested in providing. So, very cool. All right, we do have some polling questions to get through. So this is our first one. I'm going to ask Megan to pop that puppy up for everybody. This is our first polling question. As I said, you have to answer all these polling questions to qualify for CPE. Our first one here is, "Do you have a CAS practice at your firm?" This is just one of those things we want to get a sense of who's out there in the audience. "Yes, you've had it for more than two years."
(00:18:43):
"Yes, you've had it for less than two years." "No, but you're planning on one," or just "No, what is CAS? I don't even know what you're talking about." So, click one of those answers quickly to the left of the answer that works for you, and then hit "submit" to make sure we get it registered. I'm going to leave this one open a little longer than some of the later ones for anyone who's unfamiliar with this platform. I see some of you've already found the Q&A feature, which is awesome. We'll try to get to as many of those questions as we can. We're going to save some time at the end hopefully to answer those, but put them in at any point during the session. If they're relevant to what we're talking about immediately, we may grab them. But for now, we're asking the questions, and you need to tell us if you have a CAS practice at your firm.
(00:19:26):
"Yes, you've had one for more than two years." "Yes, but you've had it for less than two years." "No, you're planning on it," or "No, you don't have one." And there's no judgment. We're just curious where everybody's at to give us a sense of how we can direct the conversation, and also to give a sense of where firms are as a whole. As I said, this is an area that people talk about a great deal, but it doesn't necessarily mean that every firm out there has rushed in or taken the plunge, though a lot have. It really was, as I said, over COVID. I think a lot of firms maybe not even thinking of it as CAS, just thinking of it as, "How am I going to serve my clients if all of us are stuck at home and stuck unable to go into our offices?" I think they picked up a lot of the elements of CAS, even if they didn't necessarily call it CAS, but I think many of them said, "Hey, wait a minute, this is now a service offering. Let's follow through."
(00:20:24):
Still a few more people to come in. Like I said, everyone has to answer the polling questions to qualify for CPE, so I don't want to cut anybody off. But if you haven't had a chance yet to tell us if you have a CAS practice, please do so now because I'm going to close the poll up in just a little bit, but we'll leave it open for a couple more seconds. I should mention that we'll be sending you afterwards a link to the recorded versions of these sessions. Obviously, there's going to be a lot of great CAS information in it, a lot of great insights and so on. Rewatch and share it with colleagues, clients, partners, whoever it may be. But if you're not watching it with us live on August 14th, it won't qualify for CPE. Enlightenment, yes. CPE, no. All right, I think it looks like just about everybody has come in.
(00:21:08):
If you haven't had a chance to answer, please do so now because I'm going to close that poll up, excuse me, in about, let's count you down. Let's say 5, 4, 3, 2, 1. Let's go ahead and close that poll. We'll get those results in a second. If you didn't get a chance to answer them, please let us know, but hopefully you did. Like I said, we'll leave those polls up for a little less time in the future. I know it feels excruciatingly long for now, but we do want to make sure everyone gets a chance to get their CPE. As I said, put questions in the Q&A panel at any point; we'll try to get to them. All right, it looks like about two-fifths, 41%, have had one for more than two years. About 14% have had it for less than two years. About 20% don't have one, but they're planning on it, and about a quarter just don't have one. By the end of the sessions, I assume that they will start having started planning to have one, but for now, that's who our audience is. So, good. An interesting mix from no CAS practice to a more senior CAS practice, if we could say two years or more is kind of senior. But with that, let's get back to the panel.
(00:22:19):
I want to talk about challenges. In the CAS space, it is often celebrated, right? It's huge growth, everyone's very successful, and so on. That does not mean that there aren't challenges that come along with it. Anna, maybe you can start us here. What do you think are some of the biggest challenges in CAS going forward?
Anna Masker (00:22:35):
Yeah, I think the biggest challenge and also the biggest opportunity, I think, is the rapid pace of technology and innovation that's happening. I mean, you cannot open your browser without seeing something about AI. Any of the news outlets that we follow in the accounting space are all talking about the impact of AI. So I really think it actually impacts us on four fronts, right? It's going to impact us on the work that we do. So AI will eventually replace our transactional compliance-level work. QuickBooks is evolving, our tools are evolving, and it's going to force us to move into more advisory roles, which is what everyone in the industry has been beating that drum for years and years, and now it's going to catapult us into that arena. So, number one is the work that we do; it's going to impact us there. It's also going to impact the tools that we use.
(00:23:29):
So we've all seen how each one of our tools that we're using in our CAS tech stack are becoming more advanced. They're incorporating AI, but also the rapid pace of new entrants into the market is staggering, unlike anything I've ever seen in the 18 years I've been in this space. So, as CAS practitioners, we have to be very careful and have some blinders of not following the shiny object or having that "squirrel" syndrome where you get lured by a nice sales pitch or a fancy brochure—nobody does brochures anymore—a website or whatever. But the tools that we're using, what we've done in our practice is create a very diligent evaluation process for the tools that we use, not only for today, so servicing our clients today, but giving us a two-year horizon to say, "Can we stay on this tool? Will this tool scale with us and with our clients?" Simultaneously always being on top of what else is coming up and new so that we're not closed off to that, but we are very diligent about doing that.
(00:24:36):
So the third front is the people who do the work. So, we need to hire technology-focused people, and we need to be change champions for those who are learning this. In our firm, we're very lucky; we're very tech-forward, but still, we have 150 people. So, getting somebody to adopt new technologies can be really challenging. Getting everybody on the same page, whether you're five or 50 or 150, change management is a big component of this technology influence. And lastly, our clients are going to be influenced by this technology. So, I think all of us have had a client or two who has said, "Well, I threw my financials in ChatGPT, and it tells me this." But we all know the devil is in the details. But also, I think the new analogy is the devil is in the poor prompting. So there's not a lot of context sometimes when clients are asking Chat for a specific, narrow focus. Where we can step in and add value is that global view, our experience, our context that can help them grow. But technology is going to be both a challenge and an opportunity for us in this space, a hundred percent.
Dan Hood (00:25:53):
Excellent. That's pretty comprehensive, thank you. Destiny, how about you? As you look ahead, what do you think are some of the challenges your firm and your CAS practice are facing?
Destiny Flood (00:26:02):
Yeah, Anna, that was really great, and I completely agree with you. I would say change management and technology. So, not to repeat too much of what Anna was saying, because that was very comprehensive, but just the concept of change management with AI and technology. Like Anna said, not only do we have to find the tech and be forward-thinking, the realistic piece of it is implementing that technology. So, our department this year is going through a pretty large new technology implementation, and it's a very heavy lift. So, we have a team of six people working on that, and that's a very big portion of their role for the next six months. Then training everyone on it, and then making sure that that technology can grow with us and scale with us. Because the FinTech space in CAS is so rapidly evolving, a lot of the technology offers are either maybe not having enough AI built in, so they may find themselves falling behind the pace a little bit, or there may be a very new FinTech company that's kind of building the ship as we're flying it.
(00:27:17):
So, there's just a lot of change management. I would say for all CAS leaders and all CAS teammates out there, if you're working in a CAS practice, change management and being really flexible and having empathy that this technology innovation is not something that we just snap our fingers and it's all great. The other thing is training. As we embrace this forward-thinking, advisory-type approach, our team members are going to now need to be trained on FP&A and advisory and forward-thinking, and really getting into those CFO services. I think it's a lot of fun, but it's definitely something that is a very big part of our role. The other thing I would say is staying nimble with our service offerings and really thinking through what our industry verticals are going to be, or are we going to stay industry agnostic?
(00:28:21):
What is the Goldilocks size of the right client? So, we work with some pretty large companies, which is a lot of fun, and I personally love that, and that's where we want to keep growing. But there is definitely a Goldilocks approach of when a company should use an outsourced accounting, when they need someone in-house, or a combination of the two. Because the work of accounting, especially in large organizations, it's a really big job, and sometimes just bifurcating that. Sometimes you do actually need a full-time person to supplement the outsource model. So, those were some of the areas that come top of mind. But I feel like we can talk about this topic, this question in particular, for a long time, but it's a lot of fun and such a great opportunity to really have that lifetime learning and forward-thinking component where no two days are the same.
Dan Hood (00:29:16):
I think it's probably... We're kicking this off with challenges and so on, but it's worth pointing out that all these challenges, or most of them—there are some that are just challenges—but a lot of them have tremendous upside. If you get these things right, you don't just succeed, you go to the next level. If you get your client mix or your client size perfectly right, then you are set until it changes. But I mean, it's mostly upside. It's change to take advantage of the upside, as opposed to change just to stay alive or just to stay afloat. So there's a lot of positive upside to all these changes, at risk of becoming a little doom and gloomy. So, as we all know, growth is tremendous, and facing these challenges is about unlocking those opportunities or the further opportunities. Jody, how about you? When you look ahead to challenges, what are you thinking about?
Jody Grunden (00:30:05):
I think my biggest challenge is going third on this panel. Great panel. I echo what everyone had said there. Technology, we've always been a technology-first company. Our very first CFO is now basically our automation and AI director, and it's always been that way. We've always led with that. We've always known that we've got to have solid technical people as well as solid income-producing people, because basically what's going to happen is they're going to make life easier for everyone, for our clients, for our people. Right now, out of 60 people on the team, I think we've got six of those that are dedicated technologists, so 10%. Again, really important. You think maybe you can't afford somebody? Well, you really can't afford not to have that person. I think everyone on this panel would echo that.
(00:30:57):
I would say another challenge is just simply scaling a high advisory, high-touch individual and scaling that or scaling it into a practice. I think it's really easy to scale a bookkeeping and an accounting practice. I think it's very repeatable. Everybody in the audience knows how to do bookkeeping, everybody can manage that, and everybody's going to school for that. Then we go and say, "Hey, we're going to take these people and we're going to make them advisors." You're going to find out pretty quickly that the majority of them aren't advisors. Just because they're the best accountant in the world doesn't mean they're going to be the best CFO. So you've got to be able to look for folks that have the acumen but also have the skills to be able to advise. That's a real challenging thing. It's super easy for every partner on this call to be an advisor, kind of what we do anyways, but to train somebody to be that, that's the big stumbling block for a lot of folks.
(00:31:53):
Focusing on advisory, really learning that soft skill, finding the right people. I was at a talk just the other day, and it was a guy from Chick-fil-A, and he was talking about the difference between McDonald's and Chick-fil-A. He's like, "Hey, do you realize that we pay our people less than what McDonald's is?" You think, "Oh, how is that possible? Chick-fil-A's got this really great service and all that kind of stuff." He said, "Because we hire the right people." And I can't focus on that enough. A lot of teams, we say, "Hey, we're going to get these processes, we're going to get these positions all mapped out," and then they put the wrong people in the positions, and it doesn't work. You've got to hire the right people. So I'm thinking scaling advisory is super important, to have the right people in place, and really look for that advisory-first type person. I would say the biggest challenge for me, though, coming through it was the merger. When the merger came on, we were a standalone CAS practice. We grew up to $10 million, puffing our chest, thinking that, "Hey, we're the best in the world." Never had a year under 30% growth rate. Growth was super high.
(00:33:01):
We were one of the few in the industry at that point. Then we came in and we merged with an accounting firm, and growth flattened out. That was a challenge. Now, growth is again high. So it took about a two-and-a-half-year pace before we were accepted into an accounting firm that was flourishing—a great accounting firm, a very progressive accounting firm. But again, it took that long for them to understand what we did because everybody thinks—I would say most people know what CAS is, and most people know what we do—but when you take it to traditional accounting, auditing, and tax practice, they don't. A lot of times they think, "Hey, we're just historically looking," or "We'll do the bookkeeping." And they're giving us leads that just weren't the greatest leads in the world.
(00:33:43):
It wasn't until we figured out the secret sauce there was to invite them into our leadership meetings. We brought partners, a couple of partners, to every single quarterly meeting we had, and they heard our leadership team talk about the different issues and so forth, and really learned more about us. Once that happened—I would say probably 14 partners have been through it already—we bring them to each leadership meeting to bring in great referrals. They're starting to lead. When they get a call, they're starting to say, "Hey, that's a CAS, that's Jody, that's the virtual CFO side needs to focus on that. And guess what? We'll probably end up doing the tax stuff, which is great, but they're leading with that because they know that, hey, clients are now looking for the future." So it took us a while to figure out the secret sauce on merging into and working with the other disciplines, whether it's audit, tax, and so forth. Now we've got that. So I guess going forward, just improving on all those different issues and really having that talent, really finding the talent that can manage the service, I think those are the big issues that we're facing.
Dan Hood (00:34:45):
I wonder, I want to talk a little bit more and get Destiny and Anna in on that question that you described, or the, I'll call it an issue/concern of, "How do you work with the rest of the firm? How much of a standalone thing, how much of a silo are you, how much do you interact with the rest of the firm?" For instance, Destiny, you mentioned audit. I know you talked about helping clients with audit readiness. Obviously, I'm assuming you're not working with clients who are also audit clients for the firm, but certainly there's room there for interacting with your audit practices, like, "Hey, what makes a client ready for an audit," that kind of interaction. But more broadly, how does your CAS practice interact with the rest of your firm's other services in terms of referrals, in terms of cross-selling, or any other, in terms of staff? There was a big issue early on, right around the start of COVID, when a lot of firms started jumping in, right? There was the issue of a lot of firms saying, "Oh, well, we'll just use part-time staff from other areas." "When our people aren't in tax season, they'll do..." I don't know what they thought they'd do CAS during tax season. Sorry, I'm going a long way here, but Destiny, how does your CAS practice interact with the rest of the firm's services?
Destiny Flood (00:36:05):
Yeah, all very good questions and a good lead-in there. So our department is a standalone division of the firm, so I think that's a really important key to success. And Dan, I agree with you. I still, even today, hear of a lot of firms that try and blend it in or share the tax staff or have someone help out from time to time. But I really do think the importance of having a strategy, divisional leaders, and divisional team members is very important. But along with that, I think how we've been so successful is that we really adhere to our "one firm, one team" approach. So we try very hard to understand everything that the firm does. Sometimes that can be tricky because the firm is so rapidly growing, and it's so exciting that every week we may be doing a new service. So just to be staying on top of that, but really understanding all of the divisions.
(00:37:09):
So our CAS group is standalone, but we also do a lot of advisory outside of our group, too. So we have business process and IT automation, IT consulting, we have a nonprofit C-suite, we have transaction advisory, wealth management, a lot of other advisory services that we try and stay as a supplement and side-by-side arm with. Something that I really like that we do is on a lot of our scoping calls, we try and bring in tax and our group, or transaction advisory and our group, et cetera. So really sharing that knowledge. As Jody was saying too, having people really understand what we do is a really good key to success. And yes, we definitely do not do audit liaison services for our audit clients. So definitely a hard pass there for independence reasons, but we've also had a lot of success growing relationships with other CPA firms. So that's something that has been a lot of fun. So if we have CAS clients, we can refer them to our friendly audit firms and vice versa. That's great for that relationship building as well. But yeah, so for the most part, we are a separate division, but we do work really hard to have that "one firm, one team" approach.
Dan Hood (00:38:40):
Gotcha. Jody, I think you talked in great detail about the relationship with the rest of the firm, and that you're now at a point where they understand you, the relationship is—it sounds like it's pretty well established. Is that how you want it to work? Do you envision changing that, or is it one you would recommend for other firms to follow that sort of the relationship you have with the rest of the firm?
Jody Grunden (00:39:05):
Yeah, I highly agree. I mean, Destiny nailed it; it's the one-firm approach. With that, when you merge two firms together, very rarely is it a one-firm approach. It's usually their firm or their approach or whatever. The nice thing about when we merged, it was kind of a combination of both: "Hey, let's take some best of both worlds there and kind of merge them together." That being said, though, we're fully remote, and we have been, so all of our team goes from Hawaii to New York, that type of thing, and they're all located in St. Louis. So it made it very difficult. It's super difficult to make sure that everybody understood what everybody did and saw each other all the time and do that. So being deliberate is the real key there. We couldn't have retreats, so we have two retreats a year.
(00:39:51):
We invite everybody from our team on there, so they come to the retreats. So we've got 60, 70 people at these retreats, one in Vegas, one in St. Louis, and in St. Louis, because that's where we're headquartered there, and it works out really well. So our team bonds really well together, and that's important. So our team bonds, because again, when you're working virtual, you're only as big as the people you work with. So you could have a four-person team that you're working with, and really, you're a four-person firm no matter if you have thousands of people working in the company. With the retreats, that really gains everybody together. The piece that we were missing is how do we get those folks from St. Louis, the partners, involved in it? That's when the magic started working because, again, it was, "What are you guys doing over there?
(00:40:35):
You guys are doing so differently. Why aren't you billing by the hour? Where's your WIP at?" That sort of thing. We don't have WIP. We don't have AR. We have zero AR, and they're used to having AR. Different things. They have admin people for tasks that we've basically have technology-driven stuff. So it was a complete difference in the way that we were. I highly recommend that when working through there, you've got to be deliberate on everything you do, from communication to bringing in—like I said, we're bringing in partners, we're bringing in other key players that we want to have at our retreat, just so they can mix and mingle. Being it through a retreat means that you're not only mixing and mingling but you're hanging out with them at night.
(00:41:20):
You're not just going home. So it's not one of those things where, "Hey, we work for eight hours, and then we go home and hang out with our family" type of thing. This is really simply immersing into the base of the culture of the remote team and the culture of the CFO team. That's really helped out a lot, and it's really been a key for us. Before, we weren't intentional for the first two years. We're like, "Okay, why are we not working out?" Then once we started inviting those folks in and being part of what we do, it was great. Now, guess what? They're starting to invite us into their meetings as well. So it's kind of an interesting concept. We're getting invited. They're getting invited. Again, we're becoming that one-team approach, which I think is so important. I feel sorry for you going third.
Dan Hood (00:42:09):
Yeah, this is the challenge throughout this panel. I would just real quick say it is surprising the degree to which accounting firms—I don't mean this in a mean way—but there's a degree to which they just assume things will happen. They assume a one firm rule, "We're all working in one place, sure we'll be one firm." It is constantly proven that the best way to do it is to intentionally say, "Hey, we're going to do this. This is how it works. We're going to bring everything together. We're going to operate in this way," as opposed to assuming it will happen just sort of naturally. Because, to be fair, a lot of things across the accounting profession for 40, 50, 60, 70, 80 years, the structure of the firm set things up. But CAS is new. This emphasis, the current emphasis on cross-selling, particularly as we move towards more advisory services, really does require, as Jody sort of pointed out, right? You've got to go and actually talk to somebody and say, "This is how it's going to work. This is what we do. This is how we can add value for your clients. This is the kind of clients of yours that we think would be good for us." And ask the same question: "Which of ours would be useful to you? What do you need to know about us?" I would
Jody Grunden (00:43:12):
Even say, Dan, even extends to the non-producing people, the marketing people, the HR. Everything is... You go from a small firm, we market differently than what a large firm does. With that, that's a big difference. So you have to make sure that we're all on the same page on the marketing team. Our HR, we pay a lot differently than all the rest of the CPA firms pay. So how is that going to merge into it? So there are a lot of things that go into it that you just really don't think about until it happens. You've got to really be intentional and show why, because accountants want to know why, not just what you're doing, but why you're doing it, and how's it going to impact the rest of the team, how's it going to impact the rest of the company? That sort of thing.
Dan Hood (00:43:55):
I'm sorry we keep putting you off, Anna, but just one last point to that point is it does not matter how small a firm you are. If there's more than one of you at the firm, even if you're a sole practitioner with one employee, you can safely assume that they have some misconceptions about something you do, and that you have some misconceptions about something they do, or not even a question of misconceptions, you just don't know. The more you talk about what's going on internally, the better, because inevitably there will be confusions and miscommunications and misperceptions, and everything will be much smoother going forward. Anna, sorry, we have held you off long enough. At Dark Horse, how does the CAS practice interact with the other parts of the firm?
Anna Masker (00:44:32):
Well, it's funny. Our firm is structured differently. So we don't have a tax department; we don't have a CAS department. We have principals who focus on building their own book of business. So it's also unique because now we're not dealing with the tax department that we need to explain what we do. Now, I have 35 principals we have to explain what we do for CAS services. But we have some principals that do both tax and CAS, and so they get it, and they have built out their teams accordingly. As we know, you can't moonlight in CAS, especially during tax season. But what we also are starting to do, and to Jody's point of the education process of these other folks, especially our tax side, they're excellent at what they do. They're thinking tax planning; they're taking tax strategies. They're not always thinking CAS and the day-to-day of what we see as some of the challenges for some of our clients.
(00:45:28):
So I think part of the education for them is we talk about what are triggering events for CAS services so that they keep their eye open. Did the client get a surprise tax bill—not from us? Obviously, we're inheriting this client who had no planning, and so now they had a big tax bill and they didn't know. Well, that's an excellent source for us for our advisory services, or budgets, or forecasts, or cash flow planning. So I think it's a matter of, to Jody's point, educating the teams about what CAS services are, but being very specific around what kind of triggering events actually they can look for. Because they're smart at what they do, but they just aren't thinking the same way we are. So that education process, we're very bound by a very strong culture and a culture of learning.
(00:46:18):
So I think that helps us a little bit, but it's hard to get people's attention to start thinking outside of the engagements that they currently are working with. To that point, again, we have a little bit of a different structure, but we have a very documented joint engagement process that says, "Okay, what are the handoffs between tax and CAS?" So putting the client front and center, "How do we service this client?" and we don't drop balls on either side, but it gives both sides the confidence to know who's doing what by when. We have roles and responsibilities, we have handoffs and deadlines, and so it should be seamless for the client, but internally we have the buy-in on both sides that this is going to be a fruitful engagement for both principals if it's a split engagement. So that there's that sense of rhythm and routine on our side in the back end to make that a little bit more palatable for those who are like, "This is my client, and I'm going to introduce an unknown entity, a new person," or whatever. So sometimes I broker those relationships a little bit to find the right match to say, "Okay, if a tax principal comes to me and says, 'Okay, I think I have a CAS engagement,' I'll vet it, and then say, 'All right, you know what? Personality-wise, for the client work that needs to be done, let's find the right principal so that it's seamless, so everyone in the pool is happy there.'"
Dan Hood (00:47:50):
I love the idea of triggers for CAS work, sort of symptoms that you could say, "Listen, you've got a client who's like this." I think honestly that would work vice versa, and for any other practice in the area, that everyone in the firm should know, "Hey, if you've got a client and they start talking about this, you should be thinking about our CAS practice, or you should be thinking about our tax practice, or you should be thinking about whatever practice it might be appropriate." You've got a business owner who's talking about their concerns about what they might be leaving their kids. We should be sending you over to our financial planning group. But that notion of not just knowing what every group in the firm does, but knowing specific, like you said, trigger points where you say, "Hey, if you hear this, this means they should be talking to or looking at or possibly getting this service from us." I think that's a great approach.
Anna Masker (00:48:37):
And it's a two-way street actually, too. If I might add one more thing is I think for tax, a lot of times, because tax is who we work with on our side is they talk to a client maybe four times a year. They're not talking to a client monthly; they're not talking to them weekly like we are. So it's not only just, "Hey, who do you have for us on the CAS side?" but "How do we help you grow your practice on your side?" So better tax planning involves a lot better projections. We also have a better pulse. I don't know about you guys, but how many of you have seen a client do something really stupid and not tell us, and tell us after the fact? Right? We get that sadly a lot of times in CAS, and even more so on tax, because they don't even think to call the CPA, their tax CPA.
(00:49:29):
So I think where CAS can add value to the other areas is we see these things. We're the eyes and ears for our firm at the client that we can then expand other engagements and bring in, "Hey, what you're doing now, we need to bring in our tax principal to have a conversation about what's the tax implications? Do we need to modify our quarterly estimates?" Those kinds of things. It's a two-way street. So if you can communicate that within your firm that it's a two-way street, and here's the value that we're going to add back to your practice, I think that makes them much more open to, "Hey, let me think about this and see who else I can refer to the CAS practices."
Jody Grunden (00:50:11):
Yeah, I think Anna nailed it on the nose there. Half our CFOs really can't even spell tax, which is kind of funny. I've got a huge tax background. I kind of led with tax a lot when I started advising. So it's really important to have that tax person assigned to that client so that the person knows it, so they're part of the engagement as well. Our tax person will meet with the CFO and the client in the third quarter, in the second quarter, showing them, "Hey, here's what your tax situation is going to be," finding out what kind of tax planning ideas they're thinking about so that Anna is right. So at the end of the year, it's not a big surprise, like, "Oh yeah, I forgot to tell you all the things I did." "Oh yeah, that was probably not a great idea." They're finding that out throughout there, so it's very proactive. So I highly recommend when you're looking for people, they don't have to be a tax-driven person. That's not the person you're looking for. You're looking for the advisor, but you need that tax person to be alongside. You need the FP&A person if you're looking for different things. There are all these different disciplines that you can build into the practice and bring things in. But I agree with Anna wholeheartedly on that. You've got to have that person.
Destiny Flood (00:51:26):
Yeah, I agree. Collaboration is the theme I'm hearing.
Dan Hood (00:51:31):
Absolutely. But to the point of that, it is not just about expecting them to bring new clients, but I like the idea of, right, you've got to bring some clients for them. You've got to deliver. We do need to jump into our second polling question. For those who are keeping track, I want to throw that one in there. Megan, if you'll load that up. I did want to point out, I don't know if anybody heard that massive rustling sound after Anna asked, "How many of you seen a client do something stupid?" I assume that three to 400 people just raised their hand at that moment. Everyone has. But anyway, we're throwing up our second polling question here. You should be seeing it now. In this case, we're asking, "How do you define CAS at your firm?" Is it "Client Accounting Services?" Is it "Client Accounting and Advisory Services?"
(00:52:12):
Is it "Client Advisory Services?" Is it "Outsourced Accounting and CFO Services?" Is it "Something else?" Or if you haven't got a practice, you may not have a definition. If you don't have a practice, you can also use the definition that you have in your head of what you think CAS is. I'm just curious. For a long time, there was, I think, more urgency around people very clearly defining what their CAS meant. I think people now realize that there's a big, big umbrella for this. So it may be a little less, except for branding purposes and communication to client purposes, a little less important to have the exact perfect definition, the exact perfect acronym, I should say. But it is interesting the way each of these subtly defines the practice a little bit different for everybody or in everybody's mind.
(00:52:57):
So again, with polling questions, you click the answer that works for you and submit to make sure it gets registered for credit. You do need to answer all of them for CPE, and just to go over those rules again: in the attendee hub, where you'll be going after this session, you'll see there's a form there you can fill out. It should be live now. You can fill it out individually for each session, or you can wait until the end and do it for all three, or if you only went to two, whatever the case may be. You don't need to do it for all three at once, but you do need to fill that out and get it back to us by August 18th so that we can make sure you get credit, and all the instructions for how to fill it out are on it.
(00:53:34):
You can find that, as I said, in the attendee hub at any point. But right now, we're asking you to tell us how you define CAS at your firm. Is it Client Accounting Services? Is it Client Accounting and Advisory Services? Is it Client Advisory Services? Is it Outsourced Accounting and CFO Services? Is it something else, some other definition you may have? I probably should have included "Fractional CFO Services." People include that, but we'll include that under CFO services there. Or you may not have a definition, or you may use different definitions in different contexts. It looks like almost everybody's in. So if you haven't had a chance to tell us how you define CAS, please do so now, because we're going to close this poll up in let's say five seconds. I'll count you down. Please do answer now because you've got to answer all the polling questions to qualify for CPE.
(00:54:19):
So let me count you down: 5, 4, 3, 2, 1. Let's close that poll up. I see we've got a lot of great questions from the Q&A panel. I hope to get through some of those, but while we're getting the results of this survey, we'll hold off on that for a couple of seconds. I do want to jump a little bit... Let's see. Sorry. If we've got our responses. Okay, here we go. Client Accounting Services is 20%. About a third say Client Accounting and Advisory Services. About a fifth say Client Advisory Services only. About 11% say Outsourced Accounting and CFO Services. Something else, or "Don't have a definition," is relatively small, so it looks like CAS with two A's is the most common, about a third, but strong showings for accounting services and advisory services equally. All right, with that, let's get back to our panel. We've got... There's so much to talk about. We are running a little bit out of time, so I'm going to run these last couple of questions like lightning rounds to sort of speed through a little bit. I want to talk about your approach to advisory work, Jody, and how, as a practice, CAS's approach to advisory work has that had any impact on the firm's approach to advisory work overall? Is there interaction there, or is it they kind of each take their own approach to how you're serving clients in an advisory capacity?
Jody Grunden (00:55:45):
Is that within the firm itself or within the
Dan Hood (00:55:48):
Practice?
Jody Grunden (00:55:49):
Okay. Yeah. With advisory work, if you were to ask any of the partners outside of the CAS practice if they do advisory, they'd all say yes, for sure. They advise their clients. They help their clients with tax issues, that sort of thing. The big difference is that that's what they do when asked, when that's not their main job. That is our main job is advisory. So we are truly advising all 200 of our clients in some manner, Anna was saying, either on a weekly or monthly basis, and that's really the difference. So they can advise, and they do, but that's what we do. Once they realize that, that's when everything starts, the secret sauce starts happening. So I would say yes, and to the fact that when one of the partners came to our meeting, couldn't believe what we did and how we did it, thought we were just simply bookkeepers, and realized, "Wow, you guys are really forward-thinking," because we've always done accounting, and accounting is historically looking. "You guys aren't even really looking at that necessarily. You're going, 'Hey, how's this accounting apply going forward?'" Once he realized that, all the questions he's had, we got three or four new opportunities, and he's like, "Hey, let's go virtual CFO first, and then if we do the tax stuff, that's great." So it's kind of role-reversed once we've got everybody interacted.
Dan Hood (00:57:11):
But it's a great point, right? If your CAS practice is at the level, you're doing your budget, you're doing it for everybody all the time. It's not, as you said, it's not, "Oh yeah, as I do other things, I advise them." It's a built-in part of it. Anna, how about you at Dark Horse? How does the CAS practice impact the firm's approach to advisory?
Anna Masker (00:57:29):
I think it rounds out our current practice. So we talked about how tax does tax planning, CAS does advisory services. I think for us, our clients feel like they're holistically taken care of from both the advisory side, the CAS advisory side, and the tax side. We also have wealth management, which wraps nicely with our tax planning for tax planning purposes. So I think for us, having advisory on the CAS side just augments and enhances the tax advisory and the wealth management as well.
Dan Hood (00:58:04):
Excellent. Destiny, how about you at AAFCPAs?
Destiny Flood (00:58:08):
Yeah, I agree. We are launching this year, actually, a full advisory kind of strategy and service line within the firm that's not being led by our department. So we're trying to work side by side, collaborate with them, brainstorm together, help each other—collaborative, again, that's the theme of the day today. Our group specifically is seeing where we can continue focusing on the CFO services, the forward-thinking, the FP&A board presentations, the audit liaison, the day-to-day, maybe treasury management in the future. We're looking at eventually seeing how we can layer in HR advisory, so advisory with the firm, and keeping the spirit of it, but also trying to keep our range within the accounting end, and then layer in the rest of our team members wherever we can.
Dan Hood (00:59:10):
Excellent. All right, I appreciate... I know we've got a lot to say on all these subjects, so I appreciate everyone sticking with the lightning round approach because there are some good questions from the audience I wanted to get to. With that, I wanted to jump into our next question, again, sort of lightning-round style: "How do you see CAS practices and their role within accounting firms changing in the future?"
Anna Masker (00:59:32):
I think they have to be an essential part of accounting firms in the future. Obviously, the growth, the need is out there. I think that we are in this realm of moving away from compliance to advisory, and a big piece of that is having your hands in the client on a more regular basis and being more tied in. So it's going to be a critical part of growing a practice going forward, whether you're tax, attest, or some other firm.
Dan Hood (01:00:02):
Excellent. All right, Jody, how do you see that changing going forward?
Jody Grunden (01:00:08):
I see it being the main focus. Back when we started the firm in 2002, I read an article about the death of tax and how that was going to eventually get automated. Back then, we did everything. We did 1040s from small kids and so forth. Now we don't even touch those small returns because automation, AI, other folks can do it quicker, faster, better, and I see that getting even more and more and more. So we're eventually just doing very complex tax stuff, and the virtual CFO side becomes more because people are looking for that forward-thinking. They're looking for that person now that they know it's available. They're looking for that person to help them guide the ship, and I think that's going to be an integral part going forward.
Dan Hood (01:00:46):
Gotcha. Destiny, how about you? When you look forward, how do you see CAS practices, their role in firms changing?
Destiny Flood (01:00:52):
Yeah, completely agree. What comes to mind is just expansion and being more commonplace. I feel like the sky's the limit in the CAS world, which is what makes it so exciting. Not only just being a viable part of CPA firms, but really for the users out there: the business owners, the CEOs, even CFOs in companies. I really think that CAS practices are going to play an enormous role in solving the talent shortage in industry. So we talk about it a lot in public accounting, but there is a huge need out in the day-to-day world out there, too. So that's what I'm most excited about, and where I foresee CAS just being a commonplace. Maybe there's a world where a lot of companies up to a certain size may not have very much internal accounting support. I do think they need something. Again, like I said earlier, the day-to-day, there are special projects, there are things that come up that just don't always make sense for that outsourced model, but I do think a very large part of it. The show Ted Lasso comes to mind. "How can we help?"
Dan Hood (01:02:11):
All right, excellent. With that, we've got so much to talk about. We're running a little late on time, so we've got to jump to our next polling question. I'm going to call that pop up. In this case, we're asking, "If you have a CAS practice, how much do you expect it to change in the next three to five years?" "Not at all," "A little bit," "A lot," or "Out of all recognition," or again, "If you don't have a CAS practice," that's a good answer. While they're answering that, I do want to start getting some of our audience Q&A because there's just a lot here. One, just a comment. They said they define CAS as one I hadn't heard before: "Cost Account Services," and CCAS as "Contract Cost Accounting Services." So that's yet... I thought we didn't have enough acronyms, and now we have one.
(01:02:58):
Someone did ask, and I wanted to follow up on it. Destiny, I think it was you who mentioned that all of your clients are "snowflakes," and that's certainly true. Everybody's clients are unique and individual and bring their own unique and individual problems. One thing about CAS, or certainly early on, we heard a lot of people saying that one of the keys to CAS is standardization of services. I was curious if you can talk a little bit about how you balance that out. All of you can probably talk about this, but Destiny, since you used the word "snowflake," do you have a sense of how you balance that need to treat every client individually as the snowflakes they are, but also having the standardization that you need?
Destiny Flood (01:03:32):
Yeah, good question. It's kind of like an 80/20 approach. Most of our clients, we do a lot of the same thing, but we also tailor it as they need. That's the differentiator, and I think for us, that's a really key differentiator and something that I hope to continue doing. It does get challenging as we continue to grow, using a little bit different software. We definitely have software that we prefer, but we don't require that, being that creative solution. So I think that was actually a really good question. We are definitely very standardized. We have SOPs, we have procedures, we have training and curriculum and roles defined, and similar client onboarding, et cetera. But if a client needs a specific thing, we're very flexible and can meet them for what their needs are.
Dan Hood (01:04:27):
Gotcha. I like that. 80/20 is probably a good ratio there. I don't know, Jody or Anna, if you wanted to weigh in on this or how you guys handle that, right? You don't want to just cookie-cutter your way through your clients, but on the other hand, you've got to keep some standardization.
Jody Grunden (01:04:42):
With us, Dan, we are basically the same thing. So, with scaling accounting, it's fairly simple. You've got the procedures, places, software, that sort of thing. Scaling advisory services is a lot more difficult, and everybody thought that, especially me. I came in, I could talk to clients, not a problem. Every Monday, they think they're getting the greatest service of all, and it was just pretty much me being there, just my personality. I realized pretty quickly, once I had my first CFO, that's really hard to teach. With that, we had to come up with standard things to talk about: forecasting, cash flow, pipeline, financials, having specific purposes for different meetings, all really important. The other 20% is snowflakey, for sure. From there, that's where they have to have their creative mind to be able to do it. So I highly recommend, if you're going to scale advisory, come up with some standard things that your team can talk about, and then on a regular, recurring basis, and then allow them to be creative for the rest.
Dan Hood (01:05:39):
Gotcha. Anna, I didn't know if you wanted to weigh in.
Anna Masker (01:05:43):
I mean, I think both Jody and Destiny said most of it. I think some things where you don't want to have any sort of deviation is your quality control. Like Jody, I mean, advisory is very, very fluid, but when it comes to the accounting and accounting standards, there should be very little deviation from the standards you set.
Dan Hood (01:06:04):
Exactly. If there is, there's a problem.
Anna Masker (01:06:07):
Problem.
Dan Hood (01:06:08):
All right, awesome. I guess I wanted to get some of those in. If you have a CAS practice, how much do you expect it to change in the next three to five years? "Not at all," "A little bit," "A lot," "Out of all recognition," or "You don't have a CAS practice." All those are perfectly good answers. Almost everybody's in. But I want to give a few more seconds to people who haven't had a chance. You do need to answer all these to qualify for CPE. If you haven't had a chance to tell us how much you think it's going to change, or how little, please do so now. I'm going to close this poll up in about five seconds. I'll count you down: 5, 4, 3, 2, 1. And we'll close that up. While the answers are coming in for that, I'll be curious to see what they are. Let's start diving into the last question for our panelists, which is, "What sort of things are you doing to get ready, to get your CAS practice ready for the future?" I don't want to say "future-proofing"—you can't really do that—but to get yourself ready to take advantage of the opportunities that are out there. Destiny, why don't you take the lead on this, the sort of things that you're doing today?
Destiny Flood (01:07:08):
Yep. Yeah, keep it short. Really focusing on technology and training and getting our teams ready to promote efficiencies and be forward-thinking and promote that amongst our culture and our day-to-day activities. Excellent.
Dan Hood (01:07:29):
All right. And Jody, how about you?
Jody Grunden (01:07:32):
Yeah, we prescribe through the EOS system. So we're meeting on a quarterly basis, a leadership team, knowing that all of our processes and all of our tools will change within two years. So it's constantly making sure that, "Hey, what are the best tools out here? The existing tools, are they going to be... What are they going to look like in the next two years?" I think Anna maybe brought that up at one point, and it's really important. The processes and tools will always change. We're looking at our rocks to determine, "Hey, what are the next five things that we're going to focus on this next quarter?" And we're not waiting for a year to figure that out. We're constantly looking and constantly changing, and I think it's just basically being very consistent with it is the key. We're consistent with our clients; we need to be consistent with ourselves as well.
Dan Hood (01:08:14):
Right. It's interesting you're right. Anna mentioned that in our prep calls about thinking about assuming things will change, assuming some things will sunset, some technologies won't work anymore, some processes may need to be changed so that you're not waiting and getting surprised by change is huge. Anna, how about that? We're treating that as one of your contributions. What else are you doing to get ready for the future for your CAS practice?
Anna Masker (01:08:37):
I think for us, in addition to the technology, which I think is kind of a given for all of us, it's that mindset shift of the team to getting them starting to think more as advisors or holistically about the business and even at the lowest staff levels, getting them to start saying, "Hey, this looks a little bit unusual. Let me bubble this up." And you never know; that always turns into something, could turn into something significant. But having our teams start thinking about advisory, and then bringing in more CAS accelerators to bring in more advisory services to our firm is going to be key. But really that mindset shift and the education around moving from compliance and "historians" to forward-thinking and proactive problem solvers is really where I think we can have the greatest technologies, but if we don't have the people thinking and how to use them, we're dead in the water. So we need to work on both sides of the equation, and so the training and the people side is a big piece for us, too.
Dan Hood (01:09:42):
There is a big difference between being able to deliver advisory services yourself and being able to recognize an advisory opportunity. That you can train anybody. Anybody can do that. Anybody can say, "Oh wait, this is the time where we should be thinking about advisory." I may not deliver it myself, but someone at my firm should be thinking about it. Real quick, I just want to give the results. About 56% say it's going to change a lot. Everything else... The only other big one is about 21% say they don't have a CAS practice. So that's fair. But the overwhelming response is, I think it's going to change a lot. A few, though, 4% said they didn't think it's going to change at all. I'm sorry. Well, you know what? I'm going to eat a little bit into time into the break and just get a quick sense. Maybe we just talk briefly. I don't want to talk about actual pricing, but just a quick sense of how you handled pricing and billing. Jody, I think you mentioned it's weekly. Someone asked, "How do you do that?" Did you find that a big lift beyond the standard? I think it's monthly for most CAS practices, but is that a big lift for you, or were you able to figure it out now? It's all set.
Jody Grunden (01:10:43):
It took me about eight years of almost going out of business to figure it out. So it's a big lift, but once you figure it out, it's great. I think data is important. So using your existing data, figuring out, and that's why we track time to figure out how profitable we are, actually per different services that we provide, tasks provided, that sort of thing. They're constantly looking at it on a regular basis. With our subscription-based billing model, once they're set in that model, they're pretty much fixed to that model unless they change scope. So it's really important for us to get them into the right buckets right away, and knowing that if they change scope, then we can flip the switch, and next week they're on the new scope, which makes it nice. So yeah, it's all data-driven, and it's constantly looked at at least once a year on profitability per all the different areas that we provide.
Dan Hood (01:11:33):
Gotcha. Anna, for you guys, is it monthly billing, or is it a subscription service, or is it a mix of both?
Anna Masker (01:11:41):
Primarily, we do subscription. We do value-based pricing, and internally, as part of our platform, we have a pricing tool to get our principals to a place where they kind of have a general idea, and then we tailor our engagements depending on where the client is at.
Dan Hood (01:11:56):
Gotcha. Destiny, how about you?
Destiny Flood (01:11:59):
Yeah, we're probably the one different. We have a few on subscription-based pricing, but it's industry-specific for us. Most of our clients, we have a monthly fee range that's based on the estimate. Then for certain special projects, we will quote that separately. Certain things we do still bill hourly, so that'll be interesting in the future to see where that plays out. We didn't get to it, it didn't come up in our challenges, but the definition of scope within those pricings is really tricky. Jody, it sounds like you have that dialed in, but accounting can just... There's a lot that goes into it. So there's a lot of components that can fall into scope. So getting that defined.
Dan Hood (01:12:50):
Awesome, very cool. But once you do, the world's... Everything's perfect. It's one of those things. I always like, we focus on challenges, always want to leave with the upside, right? There is tremendous upside for this. Definitely. Absolutely. It's very exciting stuff. This has been awesome. I would spend another two or three hours with you, but there are other panelists and other moderators who are looking angry, or would look angrily at me if we were in the same room, which is why we planned it this way for me to be separate from them. So I want to thank Jody, Destiny, and Anna. Thank you so much. Great stuff, fantastic insights. I appreciate you all sharing, and thank you for joining us.
Jody Grunden (01:13:27):
Thank you.
Destiny Flood (01:13:28):
Thanks so much for having us. Thank you. This has been very fun. Thank you very much.
Dan Hood (01:13:33):
It's great stuff. I mean, there's an enthusiasm that goes along with CAS, one of the reasons why it's fun to be talking about it. With that, I want you all to know there's another session, particularly on offshoring and outsourcing within the context or in the realm of CAS. That's going to be a great session. It's coming up in about 10 minutes, or 10 minutes after the hour. In between now and then, you can stay in this room, but nothing's going to happen here. The virtual janitors will be coming up and putting away the virtual chairs. So you need to leave this room and go out to the attendee hub and look for the agenda. The agenda will have the link to the next session, which is all about offshoring in about six minutes. That's also where you find your CPE form to fill out. You can fill it out for this session if you want. You can wait till the end and fill it out for the two or three next sessions if you attend those as well. But it is available now. You do need to fill it out and get it into us by August 18th. With that, I'm going to stop rambling. Thanks to our panelists again. Thank you all for joining us, and enjoy the rest of the sessions.
Destiny Flood (01:14:32):
Take care. Thank you. Thank you so much.
Opening Remarks & Taking CAS to the Next Level
August 14, 2025 11:50 AM
1:14:40