When leaders at firms with client advisory services (CAS) talk about their ability to use CAS to catapult into deeper, more valuable client engagements, they often talk about financial planning & analysis (FP&A). As firms are delivering FP&A advisory, they’re operating as true partners and advisors, providing insights and support in one of the most sensitive, mission-critical aspects of their clients’ businesses. Once clients’ eyes are opened to the possibilities of FP&A, it completely shifts the client relationship. Clients start benefiting from real insight they use to inform decisions, not backward-looking reports that hardly see the light of day.

Verticalization: A powerful strategy for FP&A practices

Creating client value through FP&A advisory doesn’t just happen. It is the result of careful planning and execution within a technology-enabled, client advisory engagement. And one of the most important strategies for fueling FP&A growth is verticalization – identifying and actively pursuing clients in select industry verticals or micro-verticals. In our recent webinar “How to Scale and Optimize Your FP&A Practice with a Vertical Niche Strategy,” we brought together a number of leaders in FP&A to discuss verticalization strategies:

• Jody Grunden, Partner, Summit Virtual CFO by Anders
• Ryan Tansom, Partner/CRO, Arkona
• Zeb Smith, CPA, Founder and Owner of Zebulon LLC
• Mike Triantos, Head of Partnership at Jirav

In the webinar, these leaders identified some of the most important strengths that verticalization brings to FP&A advisory:

• Marketplace differentiation. When a firm demonstrates and broadcasts expertise in a specific industry, it’s able to set itself apart from other firms. Clients and prospective clients notice, which means new opportunities come to you.
• Specialized client expertise. The more experience FP&A advisors gain in a specific industry, the deeper and more specialized their clients’ experiences becomes. In turn, this leads to greater client confidence and, ultimately, more opportunities.
• Right clients, right fit. FP&A isn’t for every client. By focusing on industry verticals, firms can help rule out clients or entire industries that aren’t a good fit for the firm’s skills and experience.
• More revenue from deeper relationships. Clients taking advantage of FP&A services get more value from their firms – and they’re willing to pay for it.
• Standardization. Clients within the same industry are grappling with many of the same challenges. As a result, firms with a verticalization strategy are able to standardize their products and services to meet similar client needs, at scale.

Data is the key to delivering next-level value

Verticalization opens the door to entirely new opportunities in FP&A advisory when it comes to advising clients on critical key performance indicators (KPIs). When firms focus on distinct industries, they can better hone their ability to use non-financial and operational data that is outside the scope of typical client accounting engagements. Combined with financial data, non-financial data can provide a more holistic picture of the client’s situation, opportunities and potential obstacles.

Which metrics and drivers are unique to the industry? This is exactly the type of information that can help take FP&A advisory engagements to the next level. For example, firms focusing on manufacturers should be prepared to track such information as number of units produced per day or quality control data, to help clients determine how their overall profitability is being affected – and what financial decisions they could make to further improve.

Build on a foundation of technology

In addition to financial data, non-financial data plays a key role in providing advisory-level insights to FP&A clients – and that requires having a tech stack in place that supports both. Creating a spreadsheet network to track and harness all the data necessary to support the firm’s FP&A services is an inefficient, unsustainable approach – one that limits the firm’s ability to scale and grow. Fortunately, modern FP&A technology is designed with many of these capabilities built in – and the flexibility to add capabilities and data tracking/analysis tools that are unique to individual industries.

According to Grunden, their firm uses Jirav for forecasting, relying on the solution as a hub across clients to generate industry-level insights across the customer base. For example, 60% of the firm’s clients in a certain industry may have cash reserves of 10% or more of their annualized revenue – an insight that Anders professionals can share with other clients without disclosing individual client information. “This is the type of advisory-level conversation that’s so valuable to clients, and having the right technology is incredibly important,” Grunden said.

Hear FP&A leaders talk about verticalization in their own words

Hearing leaders speak candidly about their experiences is a must for any firm seeking to launch or enhance their growth in FP&A. The webinar delved into these invaluable insights and caters to firms at every stage of their development, from sole practitioners starting with advisory to established firms looking to provide higher-value services. Watch the webinar on-demand for a deeper discussion on this topic.

To learn more about how you can deliver higher-value advisory services with an all-in-one FP&A solution, please visit CPA.com/Jirav

---

About the author: Jeremiah LaRue is the senior product marketing manager of CAS at CPA.com. He has more than a decade of experience supporting the accounting profession as a technical consultant helping to lead firms through technology change.

You’ve read articles and the latest research highlighting the benefits of client advisory services (CAS). You’ve talked to other firms who have expounded the cases for expanding into higher level advisory services. You’re now ready to take the next step for your own firm.

Where do you start? How do you translate that excitement into a practical plan to launch a CAS practice as efficiently and effectively as possible?

A good first step is to figure out where you’re starting from. Building and growing a successful CAS practice requires a fundamentally new mindset and approach beyond traditional practice areas like audit and tax. Taking the time to assess your firm’s current strategy, structure and operations will help you determine where you are already well-positioned to take on this new service area, as well as any gaps that you may need to focus on to ensure you’re set up for success.

Determining your CAS readiness

Starting a new practice area is challenging. It’s complex. And there are many factors that will contribute to successfully getting it off the ground. Here are a few you’ll want to consider and put into place, if you don’t have it already:

• Executive buy-in: Firm leadership needs to understand the CAS opportunity and actively support the CAS vision from the start, signaling its importance to the entire firm. This also requires an aligned definition of what “CAS” means to the firm – because it differs for everyone – and how the new service area fits into the overall firm strategy.
• Clear strategy and governance plans: Establishing a CAS practice requires a shift in mindset and an entirely new approach than traditional practice areas. Practice leaders will need to implement strong organization-wide change management and make critical decisions to establish the right firm structure, culture and accountabilities needed to spur CAS growth and incentivize staff.
• Dedicated leader and staff: Great CAS practices are helmed by dedicated, full-time CAS leaders. These leaders are able to make connections with others in the firm, are comfortable in a technology-centric environment and inspire the professionals on their team to constantly learn and evolve along with the practice. Similarly, team members should be fully focused on CAS rather than splitting their time between CAS and other practice areas.
• Services: Build off your strengths. When determining what services your CAS practice will offer, start by considering what your firm currently offers and how you can evolve from there. If you’re already delivering accounting and transactional services and helping clients manage their cash flow, you can easily shift into that higher-level advisory work. But if your current services don't lead to conversations with clients about their goals and how you can help them get there, you may need to adjust your approach.
• Industry focus: Your firm can probably already claim expertise in several different industries based on its existing client list. Just as you should choose to offer services that match existing strengths, these industries should serve as the starting point for your CAS practice client roster. However, not all industries may be suited for CAS services. It’s important to identify the right ones within your existing client base and create a niche focus for your practice.
• Technology stack: CAS practices rely heavily on enabling technologies – this is the only way to deliver high-quality services to clients at scale. Just as important, a strong technology portfolio creates a path to advisory-level relationships, since these technologies are excellent at taking on lower-level, time-consuming tasks, which give CAS professionals the time they need to focus on more strategic client issues.
• Talent pool with diverse skillsets: Successful CAS professionals often require different skills and mindsets than their peers in other practices areas. It helps to understand a CAS client’s overall business – not just the view afforded by typical accounting relationships – while they gather, analyze and harness large amounts of data and turn it into strategic insights. They need to be strong communicators. And they should be comfortable in a technology-centric environment. You may also consider hiring for nontraditional skillsets, offshoring certain processes and investing in training to upskill existing talent.

Your next step

CAS is constantly evolving and providing both opportunities and challenges, and navigating the intricacies of this practice area requires staying on top of leading technology and having a deep understanding of your firm’s operational strengths and areas for improvement. CPA.com offers a free CAS Firm Self-Assessment Tool designed to empower you to align your CAS practice with the profession’s best practices and foster essential leadership conversations in your firm.

After completing the assessment, you receive a robust report that will help you more quickly build and fine-tune your CAS practice based on your firm’s strategy, as well as identify potential gaps or hurdles in your operations before they become problematic. Our team is also available to help you unpack the results and identify initial areas of focus and additional resources based on your customized result.

Taking the time to fully assess where you’re starting from is your best next step to ensure you’re starting with the best foundation to build and grow your CAS practice for the future.

About the author:
Kimberly K. Blascoe, CPA, leads CPA.com’s CAS 2.0 practice transformation programs, focusing on helping firms establish and grow optimized CAS practices through consulting, practice development and training offerings. Prior to joining CPA.com, Kim spent more than 30 years in public accounting, which included leading the CAS practice for a Top 20 firm.

Why are client advisory services (CAS) fueling so much growth in the accounting profession today? Businesses are encountering more change at a faster pace, and they need help making smarter decisions faster. Meanwhile, firms are seeking ways to better support these needs with the help of a host of new advanced technology that allows them to deliver and scale value-added advisory services more efficiently than ever, increasing revenue and driving firm growth. Those are some of the top reasons why our latest CAS Benchmark Survey reported a 16% median growth rate in CAS services, with more than 80% of top performing firms saying they anticipated more demand and strong pipelines.

We’ve worked with many firms in helping them shape their CAS strategy, going on to successfully launch new practices or re-envision existing ones. While each firm has its own reasons for taking this important step, certain motivating factors stand out time after time. Here are the top reasons why firms are committing to and investing in a long-term CAS strategy.

Provide deeper insights and more value to clients, reinforcing the role of a trusted and strategic advisor
The quest to deliver more client value isn’t new for firms. But the obstacles have been significant. Lack of capacity becomes a gatekeeper preventing firms from going beyond standard client deliverables.

For those who look beyond the challenges at the opportunities, they see that technology is a catalyst for transformation. The technology we’ve seen in the past is now no longer transformative, but table stakes. Things like cloud-based services have made it easier than ever to collaborate with clients on a deeper level and deploy new services. And automation has streamlined the time-consuming work that serves as the foundation for insight delivery, freeing up more time for staffers to focus on higher-value client services such as forecasting, risk management and using data to deliver faster insights to inform clients’ decision-making.

As a result, firms can simply deliver a lot more, to more clients, than at any time before. Those that have taken advantage of these tools by creating intentional people and processes around them are able to drive success in their CAS practice more quickly. They can expand beyond traditional transactional services to more forward-looking, strategic advisory services built on insight – and their clients are willing to pay. Plus, as many deepen their focus on industry verticals through their CAS practices, they are creating an engine of new business development powered by their growing reputation and expertise.

Attract and retain the best people

Finding (and keeping) talent is one of the biggest challenges facing accounting firms today. CAS is playing an important role here, too. Firms are finding that their CAS practice is leading with a technology-forward, advisory-focused approach which is highly attractive to qualified candidates for key roles. Why? For starters, technology-centric CAS practices create significant growth opportunities for staffers. Entry-level staff who typically perform manual and mundane tasks benefit from a structure that allows them to focus on gaining invaluable advisory and technology experience while still servicing clients and supporting the firm.

CAS practices are also able to attract and retain higher-caliber professionals who tend to avoid firms that rely on outdated manual processes and baseline technologies for fear of a lack of professional growth and of getting sucked into the same old ways of doing business. When they look at CAS practices who have leadership support, they see progressive firms putting forward-looking, technology-driven innovation to work. Which is exactly what top talent is looking for today.

Create sustainable relationships and revenue streams over the long-term

While some service offerings deliver a jolt of revenue only at certain times of the year, CAS delivers a predictable, ongoing revenue stream. That’s because successful CAS practices employ a subscription pricing model which requires regular client interactions. These interactions become a foundation to build client relationships and trust. When there is trust combined with perceived and communicated value, often times price is an afterthought. The most successful CAS practices meet with clients regularly—not just once a month or once a quarter but bi-weekly, weekly or even more frequently.

Just as important, CAS lays the groundwork for future growth. CAS practices that start by providing financial accounting services tend to expand into deeper insight-based advisory services over time, deepening their relationships with clients as they go. And there is a natural progression from accounting to advisory. For example, providing financial reports, processing accounts payable and managing expenses leads to cash flow management which can lead to a host of other insights-driven CAS.

Some primary examples of insights-driven CAS are spend management advisory, financial planning and analysis (FP&A) advisory and financing advisory. These value-added services become a springboard to introduce additional advisory opportunities like human capital management, wealth management, data analytics, cybersecurity, ESG advisory, SALT advisory and more. That’s a recipe for sustainable growth over time.

Ready to start your CAS journey?

If you’re joining the growing number of firms that are seeking CAS best practices to create deeper relationships with clients, attract and keep top talent and develop a new source of growth and revenue, we have good news for you. CPA.com has been leading the way in CAS for years, and we have lots of practical resources and insights to guide you.

Want to hear more? Watch the full video here.

Download your copy of the CAS Benchmark Survey Report to learn best practices based on data from firms across the country.

Visit https://www.cpa.com/cas to dig into all the on-demand webinars, whitepapers, articles, and case studies you need to make CAS a success for your firm.

What do you do with all those big-picture questions you keep putting off?

You know, questions like, “What’s this profession going to look like in five or ten years? What will our firm look like? What are the technologies that should be on our radar today, but we don’t know enough about? Which new service lines should we be considering?”

If you’re like a lot of your CPA peers, it probably feels like you never have time to think about questions like these, no matter how important they are to the future success of your career and firm. And even if you did set aside time to consider the future of the profession and how it will impact your firm, you can’t answer these questions on your own.

Inspire. Connect. Accelerate

The Digital CPA conference is designed to allow you to focus on the issues, trends and technologies that will shape your firm’s future. It’s a more intimate event that brings together some of the most innovative, forward-thinking minds in the industry, in an environment designed for collaboration, information sharing and networking. This Dec. 3-6 event in Las Vegas, and livestreamed online, will be a hotbed of new ideas and innovation.

DCPA will inspire you and connect you with leading-edge insights and future-focused leaders from across the profession that can help you accelerate your transformation journey.

Haven’t booked your ticket to Vegas yet? Here are five reasons you should.

1. Stay a step ahead of trends and technologies

   Think about how much things have changed over only the past five years – you’re probably working with technologies today you hadn’t even heard of then. And there’s a good chance your firm has expanded in directions you would not have anticipated a few years ago.

   From crypto to client advisory services, these advances were anticipated and discussed in previous years’ DCPA events. You can bet that many of this year’s hot topics will be part of running a successful practice a few years from now. At this year’s DCPA, you’ll get a front-row view of what’s next for CPA firms.

2. Team time!

   The past few years have made it more difficult for your team to connect in person. This event is a prime opportunity for your people to strengthen and support team bonds – in Vegas, no less, where good food and fun are around every corner. It’s a chance for your colleagues to recharge, refresh and get inspired. When they return, they’ll be more connected, productive and effective as a team. To make it easier for your whole team to reap the benefits, group discounts are available to save you an extra $100 - $200 per person.

3. Choose your own adventure

   DCPA already has more than 40 sessions scheduled, with more on the way. It includes four learning tracks – CAS, Audit, Tax, and Business – with several additional focus areas including artificial intelligence. That makes it easy for you to build your own agenda, matching your unique insight needs.

4. Networking

   Ask anyone who’s been to DCPA before, and they’ll tell you that some of their most important, lasting connections have been made at this event. The Digital CPA conference will be full of like-minded firm and thought leaders facing the same challenges and opportunities you are. This is your best chance to meet them and join our community.

5. CPE bonanza

   DCPA is a great way for your entire team to expand their knowledge and skills in key areas while earning CPE. Participants can earn up to 19 CPE credits at the conference, and on-demand viewing is readily available after the event is over so you can check out the sessions you missed or those that you attended and want to revisit. While CPE credit isn’t available for on-demand viewing, your team will appreciate revisiting everything they’ve learned so they can put it into action.

Get ready for what’s next

Are you ready for what’s next in accounting? You’ll be better prepared after spending a few days in Vegas with the people who are actively shaping the future of the profession. In-person registration has sold out for the last two years, so be sure to register early. If you sign up by 9/30, you'll save an extra $100 per person.

It’s easy to register at DCPA23.com. While you’re there, you can also find the full schedule for the event, pricing, testimonials from previous attendees, and more.

Hope to see you in Vegas!

If you paid any attention to the hype surrounding the initial release of OpenAI’s ChatGPT last November – and then the ChatGPT-4 model release more recently, you already know why this emerging tech is creating quite a stir. The ability of generative AI (or GenAI) platforms to answer questions, perform tasks, generate content and “converse” with human users gives a lot of people the uncanny feeling that the stuff of futuristic science fiction is suddenly at hand.

For many, this is a moment that is as compelling as it is alarming. Those in the accounting profession took special note of the fact that in the March 2023 launch of the latest version of ChatGPT, OpenAI showed off the application’s ability to calculate a fictional user’s tax return.

Beyond hype

As a result of these fast-moving developments, we updated the 2023 CPA.com Technology Hype Cycle, which tracks the trajectory of emerging technologies from their initial innovation trigger through maturity.

Technologies move between these different phases based on technological advancements and practical applications. While digital assets regressed in maturity from 2022 to 2023, GenAI has begun to show its true use cases and value, moving into the beginning phase of the Slope of Enlightenment.

All technologies move between the phases at different pace, but the rapid advancement of LLMs (Large Language Models) displays the belief that generative AI tools such as ChatGPT have already reached the point where the profession can start to see more realistic expectations about what the tools can – and cannot – do and how to use them.

What now?

How will ChatGPT and similar tools affect the accounting profession in the near term? And how “near” are these changes? These are exactly the types of questions addressed in a recent AICPA Town Hall discussion, “ChatGPT and the role of accounting & finance,” featuring Jason Staats, CPA, founder of Realize, and a leading expert on AI and technology within the accounting profession. As Staats says in the segment, a number of companies that provide widely used solutions and applications to the profession are already building some generative AI-based features into their offerings. These changes are happening today and are only expected to expand in coming months and years.

While it’s difficult to predict all aspects of the profession that are likely to be impacted, Staats points to three areas that top the list:

• Accounting ledgers - Increasingly automated classification that adds important context, including invoices, receipts, and even email confirmations – a new level of intelligence beyond today’s rules-based approaches.
• Practice management software - Vastly improved search, including ability to search email, team chats, meeting transcriptions and even files contained in file storage systems.
• Generative email - Automatically generated drafts of email replies to clients and other stakeholders that account for situational context, reducing the time and effort required for creating and sending routine communications.

Just getting started

How will generative AI tools like ChatGPT affect the accounting profession? CPA.com recently announced a multi-part generative AI initiative examining the technology’s impact today and anticipating what’s next, through a mixture of research and ongoing conversations with firm leaders and solution providers. Stay tuned for more updates from CPA.com as we navigate what’s ahead, including a follow up Town Hall segment, webinar, release of resources including a toolkit for practitioners to get started and a keynote with an experiential exercise for attendees at Digital CPA 2023.