CPA_Practice_Advisor_March_2020 - 4

FROM THE TRENCHES

RANDY JOHNSTON

EVP & Partner
K2 Enterprises &
CEO of Network Management Group, Inc.
randy.johnston@cpapracticeadvisor.com
@RPJohnston

Does Your
Firm Have
a Clear
Vision on

SO, WHAT ADVISORY
SERVICES?

Advisory Services?
WHILE MANY OF you are already quite busy with another tax season, for some, this is the
time of year to do planning and to prepare new and updated service offerings for 2020
and beyond. This year, we plan to provide a clear, simplified vision which addresses areas
of opportunity in your practice that may help you and your firm. One growing practice
area where there are a wide variety of service definitions is Client Advisory Services,
sometimes abbreviated CAS. This is not the same as Client Accounting Services, also
abbreviated CAS. At a future time, we'll discuss all this *aaS such as SaaS, PaaS and
HaaS. (While I wish that the profession had referred to these services as CaaS for Client
Accounting and Advisory Services, we must deal with the world as it is, not as we wish
it would be).
First, a few preliminary statistics
from our latest "Accounting Firm
Operations and Technology Survey
- for Firms of All Sizes," available
from CPATrendlines:
Smaller firms of less than 15
people as well as larger firms of
greater than 75 people are frequently
choosing a "best of breed" software
strategy rather than buying an
entire publisher's suite of tools for

MARCH 2020 ■

tax and accounting work. Because
advisory services are evolving so
rapidly, practitioners are forced to
assemble their own toolsets from a
wide range of publishers.
When we look at the services
offered by firms of differing sizes,
smaller firms tend to produce about
80% of their revenue from tax and
about 20% from Advisory and Consulting services. Larger firms tend

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to split their revenue as 40% from
tax, 40% from Audit & Assurance,
and 20% from a combination of
Advisory and Consulting services.
While a number of firms large and
small have added Client Accounting Services as a recurring revenue
source, as we have encouraged firms
to do for the last 20 years, Advisory
work has been a boutique offering
and not a consistent service offering.

While you have been busy with
your compliance work this winter,
I have been occupied with consulting and conferences, including
many discussions with evangelists
for Client Advisory Services. An
interesting response to one of my
questions from Will Hill, MBA
and senior product manager - Tax
Professionals Advisory at Thomson
Reuters has given me pause. To the
question, "What are the most commonly offered Advisory Services in
the firms you work with?" Will said:
"There are no common services." Hill
went on to say that many advisory
services represent engagements to
be compensated for business advice
we are already providing on a less
structured basis that were previously given away for free.
This was surprising to me - I had
expected an answer that would be
like Client Accounting Services with
services like bookkeeping, payroll,
bill payment, collections, and a business tax return. Instead, our conversation went on to include services
like business entity restructuring,
merger/acquisition, succession
planning and other advisory work.
While the Onvio Advisory practice
aids, originally adopted from Paul
Miller, have been revised, Paul's
style and content were adopted and
enhanced by Will Hill and the Thomson Reuters team starting in 2014
into their Practice Forward program.

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CPA_Practice_Advisor_March_2020

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