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The Changing Relationship between CPAs and Their Clients

Is your current relationship with your CPA working? You might think yes, my CPA is there to clean up my accounting records in January and prepare an income tax return before the IRS gets angry. During the rest of the year, my CPA firm is largely absent and, frankly, unnecessary. Compounding the problem is that CPAs have traditionally been very reactionary - waiting for the phone to ring with clients bringing them issues rather than proactively identifying and avoiding problems for clients before they happen. CPAs also bill by the hour which makes it difficult to know how much their help will even cost. These two factors can lead to a very ineffective relationship for most small businesses. The CPA is called upon only when “necessary.” There is a new movement within public accounting, called Client Advisory Services or “CAS”, that champions a more “whole buffalo” type approach to the relationship between a CPA firm and its business clients. At its heart, CAS is a deeper relationship between a business and its CPA firm. With the CAS model, a CPA firm and its team of experts work with a business on a regular basis to help make that business more successful and, hopefully, more valuable. And, by using a subscription model, CAS takes the guess work out of what that relationship and insight is worth each month. So, what exactly is CAS and how would it help your business? Yes, CPAs understand accounting and taxes but a business is about much more than that. Any competent CPA can get your accounting records up to date and help keep them that way on a monthly basis. The great CPAs go a step further and use that information to help business owners better understand their business and make educated decisions. A great CPA firm uses experts who can help owners focus on operations. The experts a CPA firms uses in a CAS relationship might include payroll, HR, IT, tax planning, succession planning, valuations, and even CFO-type services such as internal control analysis and strategic planning. If you are considering a loan for a new piece of equipment, who do you call first? Who would you call if you were looking to sell in 5 years and wanted to know what you should be doing to maximize your company’s value? With a CAS relationship you have that expertise at your fingertips. A CAS relationship at Bauman Associates is generally subscription based. Before the relationship starts, we ask a lot of questions and discuss the scope of services that will be part of that business’s unique CAS experience. Some businesses need more services, others need less. A monthly value for the package of services is agreed to, up front. A client that enters into a CAS relationship with Bauman now has complete freedom to bring forward any issues that arise to be discussed with their trusted advisors without concern about what it will cost. Any services identified later that are outside of the agreed upon CAS arrangement are discussed and a value is agreed to before the additional services are delivered. We recently helped a CAS client transition their point of sale and accounting systems to new software that better integrate with each other. This is not a service that is listed on our website and the client would probably have tried to manage it alone had they been at a different CPA firm. Going it alone would have been a costly mistake that kept costing administration time and money for years to come. We were able to assist and provide guidance ensuring that things were set up correctly from the start and no interruptions to day-to-day business occurred. It is always cheaper to stop problems before they start rather than to try to clean them up later. The business owners were able to continue focusing on running their business instead of this transition. We have seen many clients attempt projects like this only to see other areas of the business suffer and end up costing more money. It’s hard enough to run a business because you can never really know what you are “missing.” Why do it alone? A business of nearly any size would benefit from a CAS relationship with its CPA firm. Does your CPA firm offer this service? If not, it may be time to find a different CPA firm.


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