In a previous post, we discussed how to combat sluggish growth in your Client Accounting Services (CAS) practice. But what if, rather than sluggish growth, your firm is experiencing explosive growth? How do you capitalize on success while maintaining quality and profit levels?
To create sustainable growth, the firm needs to review its pricing model, streamline and standardize processes, and focus on expanding its capacity.
Review Your Pricing Model
If your CAS practice has exploded well above the 12%-15% annual growth rate the AICPA has projected for CAS, the first thing to do is review pricing. Take a more in-depth look at how services are priced, and dive into actual costs, rather than projected. Make sure to consider all costs when doing these calculations, from various technology tools to staffing. Don’t just look at costs, though; look to your competitors for valuable insights into what levels of pricing your target market can handle. If you shifted niches to combat sluggish growth, your new niche may be less sensitive to pricing changes.
Yes, transactional work may be piling up while these analyses are performed, but this is important – the firm may have inadvertently underpriced its various CAS offerings. Or, if competitors were deliberately undercut to gain an advantage and establish a foothold in the target niche, this may be a sign that it’s time to increase pricing to a reasonable markup.
If the firm has established that its pricing model is accurate, then congratulations – you are well-positioned to move to the next step!
Streamline, Standardize, Optimize
If you haven’t already, it’s time to implement workflow to increase capacity and streamline processes. The firm will no doubt be looking to bring on additional staff to handle the workload (more on that below) and find ways to increase productivity among existing staff, which is where documented processes become essential.
When processes are consistent across all CAS employees, it will be easier to scale up the practice - closes are faster and transactional work is more efficient. Using a workflow tool such as XCMworkflow for CAS® helps increase your existing staff’s productivity, creating additional capacity to support new and existing clients.
If the firm has an existing workflow in place, take a step back, and review current processes and procedures. Ask your CAS staff to provide feedback on what’s working and what isn’t. No-one knows the work better than they do, and it’s better to revise workflow between jobs than midway through onboarding a client.
Increase Capacity to Scale the Practice Sustainably
To sustain growth and scale your CAS practice, the firm will need to increase capacity beyond the gains that come from streamlining processes with workflow. Staffing challenges – a perennial pain point for many firms – can quickly become an obstacle preventing the firm from scaling a profitable and growing CAS practice. To obtain the additional capacity needed to take on new clients and perform higher-level advisory work, look to a combination of upskilling existing staff and leveraging tech-enabled services.
Faced with the ongoing struggle to hire new talent with the necessary skills and certifications, many firms turn to upskilling existing talent. Unfortunately, finding the time – and staff receptive to upskilling – can be difficult. Many employees enjoy their current job duties and may resist being nudged out of their comfort zone. Moreover, staff most likely to be targeted for additional training are probably already highly valued and at full capacity. Training them takes time from their usual job duties, placing additional strain on an already taxed CAS team.
Some CAS practices borrow staff from other service lines during down-time to help fill in capacity gaps, but this is a stop-gap measure rather than a scalable solution. Keep in mind that borrowed staff may not have the recent and relevant experience necessary to perform at peak productivity in a CAS setting. Also, they are not permanent – eventually, they will have to go back to their service line.
For scalable growth, consider using a tech-enabled service such as Xpitax’s CAS Outsourcing to keep up with the most transaction-heavy compliance work. With Xpitax, your firm doesn’t need to worry about getting new staff up to speed on best in breed CAS applications such as QuickBooks, Sage Intacct, and Bill.com. Staffing, training, and retention challenges for CPA firms are well known - why not outsource the work to a trusted partner who will provide you with staff who will act as an extension of your existing CAS team? In doing so, your staff regains the capacity to focus on advisory-level work because they’re no longer bogged down by transactional work that can easily be outsourced.
There’s a difference between growth and sustainable growth. To turn your firm’s rapidly growing practice into growth that is scalable and sustainable, review each of the points discussed above. As you update workflows, reassess pricing, upskill staff, and search for highly trained individuals with expertise in your CAS tech stack, don’t underestimate the benefit of a tech-enabled service like Xpitax.
It’s not easy to find good staff, hire them, and provide time to master programs and stay up-to-date on the latest developments. By leveraging tech-enabled services like Xpitax’s CAS Outsourcing, you can take the burden of transactional work off of in-house staff, creating the capacity necessary to scale your CAS practice effectively.
Watch this on-demand webinar to learn more about how to make CAS a profitable 2021 New Years Resolution.