One of the primary differences between traditional accounting practices and Client Accounting Services (CAS) practices is the tempo of recurring work that needs to be completed. Tax returns and audits are mostly annual projects. Tax returns have around three months to be filed, with an automatic 6-month extension available. CAS engagements, on the other hand, typically include completing a monthly closing of the books.
CAS clients typically need their books closed within 15-20 days after the end of the month. With proper systems and processes, books can be closed much faster. The keys to a timely close are:
- Clients who care about having monthly financial reports to run their business
- Keeping up with the work on a weekly basis
- Automated systems to quickly obtain required information
- In-process Quality Assurance
For more information on this topic, make sure to join our webinar presented by Calvin Wilder, "Key Focus Areas to Maintain Quality While You Grow Your CAS Practice," on May 27 at 2:00 p.m. Eastern Time. You can register here.
Clients must do their part of the monthly accounting process. CAS firms cannot close the books without information and documentation from clients. CAS staff may say “The client isn’t getting me what I need to close the books.” In this case managers must coach staff on more proactively communicating to get what they need from clients; coach clients on the benefits of following a monthly close process; and sometimes determine that the client doesn’t really want to invest in a timely close and adjust close deadline expectations.
CAS firms must have clear weekly processes for processing transactions and for communicating with clients on a weekly basis. This includes updating bank and credit card registers as well as balance sheet schedules, and obtaining information from clients to account for transactions. If work is kept up with on a weekly basis, the close can be completed very quickly, sometimes within a few days after the end of ythe month.
CAS staff need to get the information they need as soon as it is available. At a minimum this means having A/P systems such as Bill.com to see bill images to be able to account for them in real-time, and having online bank account and credit card account access and electronic feeds into QuickBooks to process transactions and obtain statements.
CAS firms need Quality Control built into their monthly processes in order to maintain accountability. Waiting for review by a partner or complaints from a client are not sustainable practices. Closing the books each month must include a level of Quality Control to ensure the integrity of the monthly financial statements. Quality Control also includes managing the client experience, not just the accuracy of financial statements.
These 4 items are usually inter-related. Deficiencies in one area usually compound into other areas. Success in one area usually improves performance in other areas.
For more information on this topic, make sure to join our webinar presented by Calvin Wilder, "Key Focus Areas to Maintain Quality While You Grow Your CAS Practice," on May 27 at 2:00 p.m. Eastern Time. You can register here.
Author Bio: Cal Wilder is founder of SmartBooks Genie, an application powering client accounting services practices. Integrated with QuickBooks, Genie automates accrual accounting, monthly close management, custom reporting and dashboards, task management, and scope of service-based pricing. Genie was born out of the challenges of scaling Cal’s original client accounting services business, SmartBooks Services, from zero to forty people in 7 years.