According to a recent study by CPA.com and the AICPA, the demand for client accounting services (CAS) among businesses is surging, with growth averaging 17% in 2024. Companies see the value it provides, from cost savings to improved bookkeeping accuracy. Through CAS, organizations can develop stronger relationships with their preferred accounting firm and leverage their knowledge in a host of ways.
A Gusto survey found that organizations look to accounting services for more than a yearly audit or tax return preparation. Some of the services considered most beneficial include guidance on tax credit eligibility and government programs, payroll processing, compliance, and overall financial strategy. A resounding 76% of business owners who receive advice from accounting professionals believe it makes their organization more competitive.
Is CAS right for your business? It could be. Making the leap to CAS starts with a clear understanding of your company operations and how working with dedicated advisors could drive improvements.
The 10 CAS Readiness Indicators
Prager Metis provides client accounting services on a global scale. In our experience, a company stands to gain from CAS when it exhibits any of the following indicators.
1. Transaction Volume Threshold
Increasing transaction volume can easily overwhelm even a fast-growing business. Receivables, payables, payroll, and taxes all require an entry on your accounting books. When transaction levels exceed your capacity, it results in delayed reporting and greater error potential. Staff may become burned out, especially if they’re working long hours to keep up with the books.
Signs that you may have a transaction volume problem include:
- Significant recent uptick in sales
- Expansion into new markets
- Increase in overall staffing levels
Sometimes, businesses are slow to hire new accountants, even if they’re experiencing growth. Managers may assume accountants can keep up with the latest transaction inflow and look for ways to improve process optimization or enhance productivity. That may work for a while, but what happens if growth continues? It may lead to bigger bottlenecks that are harder to overcome.
The solution may be working with a CAS provider such as Prager Metis. Our experienced accountants can collaborate with your in-house team on all types of transactions, from cash flow management to accounts payable and receivables. We can alleviate some of the administrative headaches that come from business growth.
2. Technology Gap Analysis
A surprising number of companies rely on a tech stack of legacy accounting systems to record transactions and prepare financial reports. Platforms such as Microsoft Dynamics, Deltek Vision, and older versions of Sage are just a few examples. The problem with legacy systems is that they lack the real-time reporting capabilities newer platforms offer. They’re also tricky to maintain, and finding experienced system administrators to oversee them becomes harder each year.
Management may be reluctant to transfer to a new accounting system for several reasons. Some fear the cost and operational upheaval that comes with implementing a new accounting system. Others worry about losing critical transactional history that often comes in handy during audits.
However, moving from a legacy system to a newer platform can be very beneficial. You may reduce your monthly close timeline, enhance reporting, and mitigate transactional errors.
Prager Metis can use cutting-edge technology to manage your organization’s accounting books. Our systems utilize a mix of automation and data analytics to deliver proactive insights into financial forecasting and reporting. You benefit from a swift digital transformation that might require months or years of work to achieve on your own. Once implemented, we can manage your ledger and introduce time-saving strategies that enhance your team’s productivity.
3. Talent Acquisition Challenges
The pool of qualified accountants is shrinking. According to the AICPA’s 2023 Trends report, just 47,000 people earned a bachelor’s degree in accounting in 2022. That represents a 7.8% decrease from the previous year. Similarly, fewer people are working toward the Certified Public Accountant (CPA) designation.
That doesn’t mean that businesses don’t need accountants. In fact, the U.S. Bureau of Labor Statistics predicts a 6% increase in job growth for accountants and auditors between 2023 and 2033.
If your business has complex operations, you may struggle to find accountants with the right mix of knowledge and expertise. The knowledge gap widens when considering the changing regulatory environment and frequent updates to accounting standards.
The answer to talent acquisition challenges may lie with CAS. By partnering with a CAS provider, you gain access to experienced accountants who understand the complexities of your industry. You don’t have to undertake an expensive search for talent on your own. At Prager Metis, we have a qualified team available to take care of the books.
4. Growth Trajectory Misalignment
Is your accounting team trapped in a cycle of repeating the same inefficient processes every monthly close? If you’re using ancient spreadsheets to track depreciation or going through a painstaking manual process to identify new sales, these time-consuming and error-prone routines could be curbing your business growth.
As the business expands, your teams may find it challenging to balance old and new processes. When that happens, you may notice employees working longer hours or taking more time to close the books. In the worst cases, inefficient processes can hinder audits and lead to cost overruns.
An outsider’s perspective can identify problem processes and find ways to streamline them. Since CAS providers work with multiple companies, they’re cognizant of how inefficient methods impact productivity. They can identify ways to revolutionize those processes and improve the overall accounting function.
Prager Metis is a technology-first CAS firm that utilizes automation to eliminate redundant accounting activities. We’ll look for ways to cut down on time-draining tasks such as billing and account reconciliation. Our team can also enhance your reporting processes so leadership can easily track performance with one-click insights.
5. Compliance Complexity
Expanding into a new location opens up fresh revenue opportunities, but it also introduces new regulatory complexities. If you open a new office in another state, you may need to file new sales, payroll, and income tax returns. Going overseas is even harder since you’ll face unfamiliar financial reporting and cross-border tax requirements. If your organization employs local workers, there may be language and cultural differences to overcome.
Working with a dedicated CAS provider like Prager Metis can significantly reduce some of the accounting complexities associated with multi-state and global enterprises. We have offices throughout North and South America, Europe, Africa, and Asia. Our locally-based accounting and advisory professionals can help you stay financially compliant wherever you operate.
6. Cash Flow Visibility Issues
Many businesses struggle to maintain a handle on accurate cash flow forecasting. Problems may arise when there’s a disconnect between revenue and expense projections or payment dates and collection timings. As a result, your team may struggle to make timely bill payments or become reliant on expensive short-term loans.
There are numerous reasons why cash flow forecasts and visibility can fall short, including:
- Inaccurate underlying data
- Overuse of historical benchmarks
- Disconnects between sales and procurement teams
Whatever the cause, the outcome is the same: erroneous information that makes it challenging to make informed business decisions.
As an example, assume your organization has $1 million in upcoming payments next week, and you’re expecting $1.2 million in collections. That’s more than enough to cover your costs without dipping into cash reserves. However, problems arise if the procurement team fails to account for other outgoing payments or a major customer misses their due date. If there’s not enough cash to account for the discrepancy, your company may need to make late payments, damaging important supplier relationships.
Collaboration with a CAS provider can help you avoid a similar scenario. The Prager Metis accounting and financial planning team can review your current cash flow processes and identify problems that hinder forecasting. Your leadership team benefits from accurate cash flow insights that improve decision-making.
7. Cost-Benefit Analysis
Working with a CAS provider can give you a higher return on investment than hiring internally. For one, you may not have to undergo an expensive and lengthy process to find talent. The CAS provider you work with likely already has people on their team with experience in your industry. Those individuals may also have in-depth expertise and specialized skills in areas that affect your business.
Partnering with a CAS provider allows you to scale your accounting requirements up or down according to business needs. That’s different from the employer-employee relationship, where hiring has a long-term impact on administrative overhead. You’re not on the hook for expensive employee benefits, payroll taxes, and other costs.
Another benefit of a CAS partnership is tax strategy. Knowledgeable accountants may identify overlooked tax credit opportunities that internal teams may miss. Those benefits can mean significant long-term savings for your organization.
8. Strategic Focus Dilution
Accounting isn’t a revenue-generating activity. It won’t help you attract new customers or develop fresh products. However, strong accounting processes keep your business compliant with legal and tax authorities. They also give you clear insights into financial performance, which is critical for decision-making.
As companies grow, accounting becomes more complex. Without robust processes in place, executives may spend too much time on financials at the expense of business strategy. That can slow down progress and result in missed opportunities.
A CAS provider like Prager Metis can take the administrative work off your plate. We have experienced professionals at every level, all the way up to the C-suite. Leverage our resources to complement your in-house team or act as your sole provider. With the reclaimed time, you can concentrate on growing your business and protecting your competitive edge.
9. Risk Management Gaps
According to a 2024 survey by the Association of Certified Fraud Examiners, businesses lose 5% of their revenues to fraud each year. Even with robust internal controls and trustworthy employees, you may be unknowingly losing money to bad actors. Some of the most common fraud schemes involve a company’s accounting processes, including financial reporting, billing, and payment systems.
The risk of fraud (and its cost) tends to increase the longer an employee works for a business. Tenured employees are often trusted ones, which may lead senior executives to overlook red flags. And if your staff is small, there may be no one to recognize it’s happening.
At Prager Metis, we have an in-depth knowledge of tactics employees use to perpetrate fraud. As an external provider of accounting services, we take an objective look at your company’s books to identify questionable transactions. We can also recommend ways to bolster your internal controls to reduce the risk of fraud.
Companies that partner with Prager Metis benefit from our advanced risk management software that’s capable of recognizing suspicious activity. It generates an automatic alert anytime it detects anomalies within your general ledger and reporting system. We also leverage encryption and multi-factor authentication to protect your data and secure your financial information. Our team is well-apprised of industry standards and regulations, and we take our commitment to security seriously.
10. Seasonal Fluctuation Management
Some organizations are susceptible to seasonal fluctuations that require more accounting help at certain times of the year. For example, retailers may see a boost in sales around the holiday season that requires additional accounting help. Or, companies in the midst of restructuring may need extra assistance managing their accounting processes as they open new locations or close down existing ones.
Collaborating with a client accounting service allows you to manage the fluctuations without hiring new staff. By partnering with Prager Metis, you can lean on our team for help when you need it. Our knowledgeable staff can see you through busy seasons without missing a beat.
We utilize several tools to make our partnerships successful, including Microsoft Teams and Slack. Those platforms allow you to instantly reach out whenever you have a query or need to schedule a virtual meeting. You can count on us for quick answers and easy communication.
The Prager Metis Solution to Client Accounting Services
Prager Metis is a leading provider of global client accounting services. With over 100 partners and principals and 600 team members, we’re well-positioned to assist your company with day-to-day accounting, reporting, and forecasting. We offer a full range of accounting services, from tax advisory to auditing and reviews. To learn how we can benefit your company, reach out to the Prager Metis CAS team today.
