As client expectations shift and technology advances, many firm owners find themselves at a crossroads, wondering: How do we transition from a traditional tax practice to a thriving Client Accounting Services (CAS) model?
In this episode of the “Who’s Really the Boss” podcast, Rachel and Marcus Dillon share their experience transforming their firm from a traditional tax practice to a successful CAS provider. The Dillons learned that to transition successfully, firms must adapt their processes, technology, and management approach while carefully balancing client relationships and financial stability.
The Catalyst for Change: The Last Worst Tax Season
For Rachel and Marcus, the decision to transition from a traditional tax practice to a CAS model was sparked by a pivotal moment in their firm’s history: the “last worst tax season” in 2017. With over 1,000 individual clients and 2,000 tax projects, the couple became overwhelmed and exhausted, working long hours and sacrificing precious time with their family.
Marcus recalls, “We walked away exhausted and were beyond our tipping point and decided that was it. Nothing like that ever again.” This experience was a wake-up call, prompting the Dillons to reevaluate their business model and seek a more sustainable and fulfilling path forward.
As the Dillons’ story demonstrates, recognizing the need for change is often the first step in a firm’s journey toward a more sustainable and rewarding future.
The Reality of Client Attrition
One of the most significant hurdles firms face when transitioning to a CAS model is convincing existing clients to embrace the change. As Rachel and Marcus discovered, many clients who were satisfied with their current arrangements resisted adopting a new approach, even when presented with the potential benefits.
Despite their best efforts to communicate the value of CAS, the Dillons found that only a small percentage of their existing client base was willing to make the transition. As Marcus shares, “We were a very heavy annual-only client roster in 2017. We were not able to convert 95% of our client base to CAS. And so the oversimplified advice of people that just tell you, hey, you should go convert all your clients to CAS is probably not going to hold most of the time.”
Because many clients will not make the change, firms need to be prepared for client attrition and have a plan to refer clients who don’t fit the CAS model to other providers.
To mitigate client attrition during the transition to CAS, consider the following strategies:
- Communicate the value of CAS services and how they address clients’ pain points.
- Offer a phased approach to transitioning clients, allowing them to adapt to the new model.
- Provide exceptional service and support during the transition to demonstrate the benefits of CAS.
- Regularly seek client feedback and promptly address concerns to maintain trust and loyalty.
Embracing Cloud-Based Solutions and Real-Time Collaboration
As firms transition from a traditional tax practice to a CAS model, they quickly discover that their existing processes and technology may not be well-suited to the demands of ongoing client engagement.
Firms must adopt processes and technology that effectively track project frequency, timeliness, and client communication to succeed in a CAS model. Cloud-based solutions and remote access become essential for collaborating with clients and providing real-time insights into their financial performance.
The Dillons’ experience illustrates the necessary changes firms must make to their processes and technology to thrive in a CAS environment. By embracing tools that facilitate seamless collaboration and real-time data sharing, firms can position themselves to deliver the high-touch, proactive service that CAS clients expect.
Shifting from a Partner-Centric to a Team-Based Approach
One of the most significant challenges firms face when transitioning to a CAS model is adapting their management style to support ongoing client engagement. As Rachel points out, “We have to hire and then empower our team to work with the client to deliver the information, to have conversations, to have a relationship. We have to trust our team so that we can serve clients. If not, the practice isn’t scalable, so you’re not really better off one way or the other.”
In a traditional tax practice, partners are often clients’ primary point of contact, handling everything from client communication to project management. However, in a CAS model, this approach quickly becomes unsustainable, as the ongoing nature of client engagement requires a more distributed approach to client service.
To scale a successful CAS practice, firms must shift from a partner-centric model to a team-based approach, empowering staff members to take on greater responsibility for client relationships and project delivery. This requires a significant mindset shift for many firm owners, who may be accustomed to maintaining tight control over client interactions.
Learning from the Challenges and Triumphs of Others
As the Dillons’ story illustrates, transitioning from a traditional tax practice to a CAS model is a journey filled with challenges, surprises, and growth opportunities. While every firm’s path is unique, there is much to be gained from learning from the experiences of those who have gone before.
By sharing their struggles and successes, Rachel and Marcus offer valuable insights and guidance for other firms considering a similar transition. Their story serves as a reminder that change is rarely easy, but with perseverance, adaptability, and a willingness to learn, it is possible to navigate the complexities of the CAS landscape and emerge stronger on the other side.
Charting Your Course to CAS Success
For firms embarking on their own CAS journey, the Dillons’ experience offers several key takeaways:
- Embrace the need for change: Recognizing when your current business model no longer serves you is the first step towards a more sustainable and rewarding future.
- Communicate the value of CAS: Clearly articulating the benefits of CAS to both existing and prospective clients is essential for building a successful practice.
- Adapt your processes and technology: Embracing cloud-based solutions, streamlining workflows, and eliminating inefficiencies are critical for delivering high-quality CAS services.
- Empower your team: Shifting from a partner-centric to a team-based approach is key to scaling a successful CAS practice and providing exceptional client service.
- Stay committed to the journey: Transitioning to a CAS model takes time, effort, and a willingness to learn from both successes and failures.
By remembering these lessons and staying committed to the journey, firms can chart their own course toward CAS success, building a profitable and personally fulfilling practice.
Are you ready to take the first steps toward building a successful CAS practice and shaping the future of accounting? If so, tune in to the Who’s Really the Boss podcast and hear Rachel and Marcus Dillon’s inspiring story.
Rachel and Marcus Dillon, CPA own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, DBA | FIRM, supports and guides accounting firm owners and leaders with free resources, education, and operational strategy.