• Justin Pulgrano

Reflections from AICPA Engage 2022: Enabling CAS 2.0


Like many of my fellow accountants, I recently braved the Las Vegas June heat to reconnect at AICPA Engage 2022. It was an incredible week of seeing familiar faces (plus quite a few new ones), and I can confirm, Covid has not killed in-person events. In a week of insights, perhaps the greatest takeaway for me was the astonishing evolution and growth happening right now in CAS Practice.


Here’s what stuck with me the most when I made it back home to Seattle.


CAS Has an Evolving Definition

On the simplest level, the CAS acronym is changing, but for good reason.


Historically, the “A” in CAS stood for accounting (client accounting services). CAS teams performed bookkeeping, paid bills, managed collections, and other financial tasks for businesses not quite ready to tackle these things themselves. This more transactional service (which presenters such as Amy Bridges from CPA.com referred to as CAS 1.0) covers accounting, monthly close, and delivering financials to business clients.


Naturally, these services, especially when done well, can evolve to include advisory services that mirror those of a CFO. A CFO does far more than a bookkeeper, including forecasting and strategy based on both financial and non-financial insights. For a business who has found value from their CAS firm, it’s the logical next step. This is where the definition starts to shift, from CAS “A” meaning accounting to the CAS “A” meaning ADVISORY.


When your firm goes beyond the standard accounting fare, it’s time to embrace the advisory A, which is now also being called ‘CAS 2.0’. Types of advisory services in CAS 2.0 include providing dashboards, insights into the financial metrics shared, industry specific metrics, and operating at a continuous business cycle with real-time insights. It’s stepping up to that CFO-level client service, and in essence, playing the role of a trusted, hands-on advisor.


While this shift to advisory certainly isn’t new for the profession, it was great to see a historically transactional service offering being redefined and real examples of firms making the shift.




It PAYS for Firms to Embrace CAS

There’s good reason for firms to embrace the Advisory, CAS 2.0 “A”. CAS continues to be a rapidly growing (and profitable) service line for firms that embrace it.


At Engage22, the AICPA shared insights from their CAS 2020 Benchmark Survey that make a compelling argument for CAS to be a focus for firms looking to grow. Net Client Fees (NCF) grew 20% in CAS, almost double from results in 2018, outpacing the projected growth by a considerable margin. A strong 71% of survey respondents indicated a healthy pipeline that will continue to support their projected growth. CAS practices have excellent profitability when compared to other firm services. With a gross margin of 47%, CAS proves itself to be a strong strategic investment for firms.


Beyond the fiscally strategic reasons to make your “A” advisory, a more altruistic reason exists as well. As accountants, we are in a unique position to be in our clients’ corner with a comprehensive, intimate knowledge of their business, as they make their most important decisions. Amy Vetter said it well in a recent Accounting Today editorial, “Accountants transitioning into advisory roles bring industry experience, accounting technology, process expertise, financial acumen, and an understanding of the client to develop tailored recommendations.”


When facing their toughest decisions, where else can clients find guidance with that list of credentials? In Advisory Services, we can go beyond being mere “bean counters” and rise to the calling of being truly there for our clients. A benefit for clients, and a huge opportunity for the firm.


No Need to Reinvent the Wheel - There Are Excellent CAS Practice Models to Follow

Building a successful Client Advisory Services practice requires a different approach from traditional accounting services. Dixie McCurley, Principal and CAS Leader at Cherry Bekaert, gave an excellent presentation on operationalizing your CAS practice for efficiency.


Her strategy utilizes modern, efficient workflows that enable a ‘continuous close’, eliminating the bottleneck of work that exists at month-end for most CAS practices and enabling advisory services along the way.


My two big takeaways from Dixies session were (1) the importance of cross-training and collaborative teams, and (2) assigning roles and responsibilities for a “production team” and a “project team”.


Cross-training and collaborative teams

Silos, particularly data silos, can be damaging to productivity. In the modern workforce, all the work for a client doesn’t have to be done by a single person. Using a “many employees-to-many clients” team approach vs. a “one-to-one” approach is a good place to start, plus simple tactics like a daily work huddle where outstanding tasks, issues and goals for the day, week and month can be discussed and assigned enables this collaborative team approach. Cross training is equally important, so that team members can step in at any point of an engagement to ensure a CAS practice stays agile, meets goals, and delivers results for clients.


Production vs. Project Team

This concept was one of the most valuable and practical pieces of advice I heard at the conference. At Cherry Bekaert, each individual on a client engagement is assigned to the production team or project team.


The production team is in charge of delivering the services the client requires on a recurring basis. For example, processing transactions, bill pay, payroll, and delivering financial statements at month-end with advice and insights. This team is primarily focused on the “continuous close” concept, making sure that the work during the month is running smoothly and information is up-to-date for the client and the team at all times.


The project team’s focus is on non-recurring work required by the client. This starts with onboarding and implementation at the start of a client engagement and expands to training new employees that join the client’s team, implementing process improvements, etc. This also includes out-of-scope items or analysis requests that the client makes along the way. For example, if the client asks the CAS team to run a pricing and profitability analysis of specific products so they can decide which products to discontinue, this would be a one-off request not part of recurring services.


The benefit of having these two teams is that they create operational efficiency, so one-off projects do not derail the team from providing recurring services on time, and they provide a better experience for the client and for your employees. This is a win-win-win situation. Better for the firm, better for employees, and better for clients.


We’ve even “borrowed” Dixie’s production vs. project terminology when discussing our product Strongbox to our CAS clients. The tool helps production CAS teams automate and enhance recurring tasks like monthly and quarterly financial and KPI reporting. For project teams, Strongbox enables instant client assessments and ad hoc analysis requests.


Tech Stack, Tech Stack, Tech Stack

Building a strong CAS practice also means building an infrastructure to support the team’s efforts. At Engage22, automation was front and center as a key to scaling successfully.


The CAS 2020 Benchmark Survey listed “leverage[ing] technologies to create efficiencies” as one of the top nine attributes for Top Performing CAS Firms. 87% of the top performing firms use workflow tools and 78% use tools with dashboards and alerts. An agile team is one that doesn’t have to waste time on repetitive tasks and that can automate analysis and visualizations (one of the many reasons we love delivering our product, Strongbox, to teams, where we help them achieve this on a daily basis!)


Another attribute of top performing firms is picking, and sticking to, a tech stack. While it can be useful to have multiple different tools that do similar tasks if one is better than the other in certain situations, having a consistent tech stack creates efficiencies in both team training and client delivery.


For CAS teams, it all starts with the number of general ledger solutions used to support clients. 88% of the top performing CAS practices supported three or fewer. By keeping this element limited, firms are better able to create internal processes and automations without the extra burden of adjusting for an outlier accounting system. The saved time also contributes to why CAS teams have great margins.


Keep the Conversation Going

It was amazing to reconnect with so many in Las Vegas last month but of course, the conversation and learnings didn’t stop there. I’d love to know your thoughts – what were your key takeaways? Message me on LinkedIn and let me know!


In the meantime, if you’re running a CAS team, please take the 2022 CAS Benchmark Survey that CPA.com recently launched. Your insights help guide the future of the profession, and I can’t wait to see the results!