What is Your Firm’s Unique Path to Outsourced Accounting Success?

What is Your Firm’s Unique Path to Outsourced Accounting Success?

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What is Your Firm’s Unique Path to Outsourced Accounting Success?


In my last post (click here), I discussed at a high level how to begin to differentiate your Client Accounting Services Practice (CAS) in the marketplace. We looked at:

  • Building a niche
  • Taking a consultative approach
  • Understanding the key metrics of your client

Those are very important points for any CPA firm to consider, but what if you are still considering whether to be in the outsourcing business or not? What are the critical factors to starting a practice and what options are there for you to consider?

Critical Factor #1 – Does the firm have an innovation and growth mindset?

Many firms will take a “me too” approach to building a practice – “we have to do it because XYZ firm down the street is doing it.” Not much thought is given to the strategy, technology platform, or infrastructure necessary or how to gain the competitive advantage. When the economy is growing, a “me too” strategy can look like genius. Unfortunately, we are not in those times anymore. What will set your practice apart? Are you willing to take risks and have a reasonable time horizon to measure success?

Critical Success Factor #2 – Do you know where this practice will fit in your firm?

I have seen firms house the practice in all areas. I think it is crucial to understand what are the key drivers to success and ensure that the reporting structure aligns with those. I personally believe in most cases, that the CAS practice is a unique area that while complimentary with other areas of the firm, is so different it deserves its on leadership and direction.

  • CAS is not a compliance function – there are no “major” deadlines, no “busy season,” chargeable hours are generally irrelevant and service is constant – not episodic. I have worked with partners who had delivered tax/audit services for so long, it was hard for them to comprehend a service offering without the big bang of a deadline.
  • CAS is not project-oriented – Many advisory services like IT Risk Advisory are project oriented. A Gantt chart is built, milestones are set and a deliverable is produced. Project management techniques and tools are valuable in the CAS because each month is like a mini project but there is no time when the project is finished and you walk away to celebrate at the happy hour. Of course, the recurring revenue will more than offset the lack of happy hour!!
  • CAS is a separate business with a distinct rhythm and cadence. It is part process, part technology, part project management, and part technical accounting. The interesting thing to me is that we overstate the last one and at the same time understate its value. Bookkeeping is not complex once the process and work flows have been established (which is very hard work). It doesn’t take a CPA to accomplish this. But there are important moments in time where technical matters will arise, and this is where a firm can truly shine through and provide a competitive advantage. More on this in a later post.

Critical Factor #3 – Are the partners unified in the decision?

Some firms have a managing partner, with the power of personality, who is able to unilaterally make these decisions. In most firms, partners will need to discuss and arrive at a consensus. It is important to have an open and transparent process and perform a true assessment of your strengths and weaknesses and understand the opportunities in the market. There will be an investment in resources – both time and money – to create a profitable practice. Are your partners all in?

As you consider building, re-starting or expanding your practice, keep those factors in mind. They are not a panacea for all the problems, but will help increase the likelihood of success.

I always tell my son (senior in high school) that everyone has a path to success and thank goodness, not everyone’s is the same. College is for some, gap years work for others, military service for many more. It is the same here…there are many ways to achieve your goals in the outsourced accounting world. If you think Seven Bridges can help you build your roadmap, I would love to hear from you at john@7bridgesllc.com.

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