Building a Client Accounting Advisory Services (CAAS) within your CPA firm is one of the most lucrative and sustainable paths of growth that firms can take. According to AICPA, firms that have incorporated advisory services alongside compliance-associated tasks saw an increase in revenue by 43% from their existing client base. Since clients are willing to pay extra for consulting services from their accounting experts, this provides strong motivation for firm owners to adopt the CAAS model of accounting. According to AICPA, around 76% of CPA firms aim to transition to building the CAAS model.
Now, building this CAAS model of accounting without the overhead cost of more staffing is a critical hurdle for firms. Because adding extra staff solely for consultation services can quickly become a financial burden for firms in the long term, it is often impractical. The annual expenses for employing an in-house CAAS provider typically fall between $80,000 and $150,000, covering both base salary and benefits.
The only solution? For CPA firms, to plan the current capacity planning of their firm’s staff in such a way that helps them expand the scope of their services, without their staff having to work 80-hour workweeks, burn out, and then trigger a mass exodus.
The reason this is a critical matter for CPA firms is that they don’t immediately face the consequences of it. Instead, mass resignations, caused by staff burnout, slowly chip away at your firm’s operating costs, which only come to light in 5 to 10 years.
For avoiding employee burnout, it is important for organizations to delegate their CAAS aspirations in a strategic way. This can be achieved through developing an internal system whereby the current employees would be relieved from tasks connected with compliance. Otherwise, delegating the CAAS services activities will not last long until your major employees leave you owing to the lack of a supportive environment for them.
The present blog aims to be a guideline for balancing the strategic value of CAAS practice and the necessity to avoid burning out the personnel.
How to Sustainably Plan for CAAS Staffing Without Burning Out Your Team
Ensuring that your team avoids burnout or a shared sense of lethargy throughout the development of the CAAS practice necessitates a fundamental shift in the firm’s approach to workflow and organizational mentality. The mentality being that more work equates to more hours that firms must take away from their staff. The client accounting advisory approach offers a much more flexible structure for overseeing accounting procedures. Unlike traditional accounting, the cost of a task is usually associated with billable hours of a specific rate and follows a rudimentary method of pricing.
CAAS pricing models are based on a more value-based or ROI-based billing method. This value-based pricing method is the key to protecting your team’s mental health during this transition period. Shifting towards value-based charges gives your staff the opportunity to work smarter, more strategically, and leverage the benefits of automation. They will no longer be exchanging their time for money; instead, they will be leveraging their strategic insights for high-value returns. The following section lists steps for building a sustainable advisory-focused infrastructure, broken down into three distinct phases of the roll-out:
Pre-Rollout
Calculate Your Firm’s True Current Capacity
Before assigning responsibilities related to what CAAS is in accounting, CPA firms must understand their staff’s fundamental capacity planning. This baseline helps CPA firms navigate the trail they must follow when trying to diverge from their current responsibilities. This calculation is challenging because multiple factors influence the staff’s working hours. To understand your current bandwidth, avoid simply multiplying your team size by 40 hours each week. Instead, account for PTOs, holidays, sick days, administrative tasks, and continuing education within your calculations. This is to get the whole picture outside of billable working hours for each and every staff member. The following table provides an example of what a standard staffing capacity of an average CPA firm can look like:
| Capacity Factors | Annual Hours | Notes / Breakdown |
|---|---|---|
| Gross Available Hours | 2,080 | 52 weeks (times) 40 hours per week |
| Less: PTO & Holidays | 240 | Approx. 3 weeks PTO + 10 observed holidays |
| Less: Sick Leave | 40 | Average of 5 sick days per year |
| Less: CPE & Training | 60 | Continuing Professional Education |
| Less: Firm Admin & Meetings | 200 | Internal communications, team discussions, and organizational responsibilities. |
| Net Available Work Hours | 1,540 | Actual hours available to be worked |
| Less: Non-Billable Client Management | 80 | General client relationship, billing |
| Net Production (Billable) Hours | 1,460 | Available time spent doing direct client work |
Offload Some of the Current Accounting Tasks
You can’t expect seasoned accounting teams to just be up and ready to provide client advisory services on the side, overnight. For the Client Accounting Advisory Services model to work in its best form, some of your team’s current compliance-driven workload must be delegated or proportionally automated. Delegating such accounting tasks leaves more room for accounting professionals to invest in training towards more client-facing, communicative, and consulting-associated tasks. There are two major ways CPA firms can delegate those tasks to make room for your advisory services:
Automation
By adopting automation technology driven by AI, CPA firms can significantly reduce the number of tasks that typically occupy an accountant’s day, which is around 60%. Those tasks include building Excel Sheets from client invoices and bank statements, categorizing, and detecting anomalies. When such tasks are automated with a reliable automation service provider, it leaves more time and resources for accounting teams to be trained. This allows them to prepare the foundations for providing new advisory and client-facing services.
Outsourcing
A more human-centric approach to delegation includes outsourcing your compliance-centric tasks to an accounting outsourcing service provider. This approach ensures that qualified accounting tax professionals oversee your existing workflow and report it back to you or to your clients directly. One of the most common operational systems is that CPA firms in the United States outsource their accounting work to service providers in India or the Philippines.
Within this system, they retain the task of reviewing the information before it is forwarded to their client. They continue to expand their scope of advisory services for their existing clients. Additionally, this system offers them the ability to continue their main operations in a cost-effective manner while also working towards their more strategic ambitions.
Closely Monitor and Analyze Advisory Workflows
A foundation of strong service is the workflow foundation upon which it is built. Establish standard operational procedures and identify areas of potential bottlenecks. First, establish a regular cadence of actions and communicate it with the relevant service providers. This allows those providers to have transparency and predictability for their new responsibilities, preventing your team from getting overwhelmed.
Consequently, the team communicates back about the possible bottlenecks they identify in their workflow. The importance of these bottlenecks is integral to your advisory service workflow’s success rate. Because it helps you understand which gaps need to be filled, which tasks need automation, and how to make the advisory services as efficient as possible. The following are some of the common KPIs that CPA firms must be familiar with to assign their advisory teams:
- Client Onboarding Cycle Time
- Advisory Revenue per Client
- Billable Utilization Rate
- Task or Workflow Bottlenecks
- Client Satisfaction Rate
- Staff Turnaround Time
Build Systems to Observe Upskilling Rate of Each Relevant Staff
Advisory teams require a specialized skillset, making it essential to establish targeted KPIs to accurately measure their performance. Effectively tracking these metrics not only ensures accountability but also provides a clear understanding of each team member’s contributions. This process highlights the tangible value your advisory staff brings to clients, demonstrating their impact on project success and client satisfaction. Moreover, consistent measurement and monitoring of these KPIs drive continuous professional development. They do so by identifying areas for improvement and encouraging ongoing learning and skill enhancement within the team.
During the rollout
Introduce CAAS services with a ‘Lead Strategy’ Method
For CPA firms in the initial phase of scaling their operations, it is essential that their advisory services are aligned with IBM’s capacity planning model. This model provides a structured framework that helps firms anticipate future demands and allocate resources efficiently. Among the various strategies derived from this model, the most effective for accounting professionals is the ‘lead strategy.’
This approach emphasizes a proactive stance, enabling firms to deliver services before the demand actually materializes. By adopting the lead strategy, CPA firms can stay ahead of client needs and ensure higher client satisfaction. This approach also helps create a competitive advantage in the marketplace, especially during their critical growth phases.
Cap-High Complexity Work Limit
Since the CAAS services are in mid-rollout, CPA firms should assess the complexity level of their current client engagements. They should also establish a strict Cap-High Complexity Work Limit. By capping the number of high-tier, complex advisory projects a team can undertake; firms can prevent resource bottlenecks. This approach ensures staff has the bandwidth to deliver proactive value without compromising quality. Limitations serve as a necessary quality control safeguard. They allow firms to refine their advisory workflows, master foundational processes, and maintain excellent service standards. This is especially important before scaling larger or more intricate client requests.
Centralize and Standardize the Client Onboarding Process
To avoid chaos and prevent advisory teams from becoming overwhelmed, CPA firms must implement a centralized and standardized client onboarding process. This process should be supported by a well-documented workflow and specialized technology. This approach ensures consistent service, minimizes document chasing, and clearly sets client expectations from the start. Newly formed advisory teams need to have as straightforward workflows as possible, with minimal friction. Because every point of friction creates a bottleneck and eventually a hindrance in the scaling of your CAAS services.
Post-Rollout Checklist
Once your advisory services are in operation, the key to keeping a healthy and self-correcting workflow is to regularly check in with the advisory team. By regularly conducting monthly or quarterly check-ins and taking honest feedback, you have two aces up your sleeve. It offers you the reliable data you need to understand which areas of the workflow need for course correction.
Additionally, the advisory team experiences an ever-improving workplace. The CPA firm genuinely and proactively works towards enhancing its workflow. They do not merely provide a set of metrics to meet or expect them to rectify bottlenecks on their own. The following section lists a template for a checklist that firms can take and modify according to their needs, to inquire about the workflow of CAAS services:
- Are you consistently meeting your weekly or monthly deadlines without needing to work overtime/weekends?
- On a scale of 1 to 10, how would you rate your current workload balance?
- Are you experiencing ‘scope creep’ with any CAAS clients, where requests regularly fall outside the initial engagement letter?
- How much of your week is spent on manual, repetitive administrative tasks versus strategic advisory work?
- Do our current digital tools and software speed up your workflow or cause delays?
- Are there specific tasks (e.g., month-end close, document collection from clients, report formatting) that routinely hold up your work?
- Do you feel that cross-team commuication (e.g., between bookkeeping and advisory) is clear and effective?
- Is the current division of labor within the CAAS team logical, or are some members carrying a disproportionate amount of complex/routine work?
- Are we consistently receiving financial data, receipts, and source documents from clients on time?
- Do you spend an excessive amount of time tracking clients for necessary information or approvals?
- Are our clients adopting and utilizing the advisory tech stack we have put in place for them?
- Do you feel you have the required training and resources to effectively execute our advisory deliverables?
- Are you being given opportunities to upskill alongside scaling these services?
Key Takeaways
As mentioned in the above blog, the importance of preventing staff burnout is a risk that cannot be neglected. The key to scaling your ambitions within a CPA firm for the long run lies in your staff’s health and retention rate. Many firms fail to retain their existing staff during the scaling process, a challenge that is not always immediately recognized. Avoiding such costly mistakes requires firms to have a transparent strategy of introducing their Client Accounting Advisory Services model, which goes beyond just presenting a new set of objectives to their staff.
First, understand the current workflows and identify opportunities to reduce the team’s existing staff. Then, adjust the structure to create space for new responsibilities. Additionally, providing your staff with proper training sessions to empower your team with a new skill set that they will need to reach these metrics plays a crucial role. It helps in delivering high-value advisory work while safeguarding employee well-being.
Also, continuously checking in with your advisory staff and exchanging feedback allows for a healthy, two-way dialogue. This helps prevent silent burnout and aligns individual career goals with the firm’s evolving CAAS objectives.
