Accounting and finance has always been a complex topic for Small to Midsize Business (SMB) owners. Many businesses lack the scale to employ a full team that includes a CFO, accountants, bookkeeping staff, and others. Instead, they might have one or two extremely overworked employees trying to manage everything. Or, in some instances, the entrepreneur might manage accounting and finance by themselves.
This approach has long been suboptimal, but finding a solution has been tricky until recent years. The rapid growth of Client Accounting and Advisory Services (CAAS) has been a gamechanger for many SMBs, empowering them to take control of their finances and use them as a platform to build competitive advantage – not a weakness.
But what exactly is CAAS? What do these services entail, and how do they benefit business owners? Those are the questions we’re answering today.
What is CAAS?
When a business works with a CAAS provider, they essentially outsource their transactional accounting tasks to a third-party – typically an established CPA firm. The CAAS provider performs all routine accounting tasks: monthly bookkeeping, month-end closing, processing payroll, and so on.
But in addition to these basic tasks, the CAAS team also provides business leaders with high-quality financial insights that empower them to make better decisions for their business. Many CAAS providers also include an advisory component in their engagements, helping businesses to build the competencies required to master their financial data.
This strategic component is one of the characteristics that truly elevates CAAS above more traditional outsourced accounting solutions. CAAS is more than just recording checks or transactional bookkeeping: it’s a bold new approach to accounting and finance that’s changing the way businesses operate.
It’s worth noting that every CAAS provider will define the field slightly differently. Here’s how we define it at LBMC:
CAAS is a connected and holistic approach that creates consistent processes, cash controls, consolidated financials, multi-entity reporting, full financial visibility, and connections between all cloud-based systems and business strategy.
Why Do Businesses Need a CAAS Provider?
At LBMC, we talk to a lot of business owners who face challenges with their accounting and finance. Here are some of the common pain points we hear from them:
“We just can’t seem to retain skilled accountants.”
“I spend too much time on the details. I don’t have any bandwidth to think about the bigger picture.”
“We struggle to meet our deadlines and stay ahead.”
“We cannot get the information we need on a timely basis.”
“I just want my life back… accounting and bookkeeping is taking over.”
If you’ve ever experienced any of these feelings about your own business, working with a CAAS partner would likely be an invaluable investment. But what exactly can you expect from a relationship with a CAAS provider?
CAAS Service Offerings
The service offerings provided by a CAAS partner are typically broken out in to three distinct categories:
- Outsourced Accounting Services
- Outsourced Controller Services
- Outsourced CFO Services
Each of these service offerings fulfills a slightly different role.
Outsourced Accounting Services provide businesses with valuable hindsight, helping them understand what happened in a previous accounting period. Common tasks in this service include routine bookkeeping, creating financial statements, and managing accounts receivable.
Outsourced Controller Services feature much more analysis, yielding deep insights on every element of a business’s financial performance. Providing these services requires analytical skills and a keen understanding of industry trends. Common tasks include tracking performance against budgets, implementing digital accounting systems, and overseeing the month-end close and creation of related financial statements.
Outsourced CFO Services are extremely strategic, and tend to focus on helping businesses prepare for sustained financial success. Outsourced CFOs can assist with a variety of tasks, from helping a business raise equity or debt financing to helping leaders prepare for the sale of the company.
7 Benefits of Working with a CAAS Provider
By working with a well-established CAAS provider, businesses can unlock a wide range of advantages that can help boost performance. The key benefits experienced by businesses that work with a CAAS provider include:
- Access to domain expertise in accounting and finance with knowledge tailored to your business’s specific industry.
- Use of proven accounting and finance best practices that help your business succeed.
- Creation of an efficient, tech-first accounting framework that optimizes costs by embracing automation and efficiency.
- Ability to establish a proactive approach to controlling spending.
- Exposure to proven strategic leaders that have the experience to shape meaningful KPIs, benchmarks, and strategies that can push your business forward.
- Access to sophisticated dashboards and analytics tools that help your business look forward, rather than backwards.
- Standardized processes that will in turn create efficiencies and new margin growth in your business.
Together, these benefits are a testament to the ripple effect that working with a CAAS partner can have on your wider business.
Meet the LBMC CAAS Team
CAAS is the next major frontier of accounting, and at LBMC, we’re proud to serve as a well-established CAAS partner to some of Tennessee, Kentucky and Indiana’s leading entrepreneurial businesses.
Our team is experienced across outsourced CFO, outsourced accounting, and outsourced controller engagements, and is ready to partner with your business today to build a more robust financial infrastructure that serves as the foundation for lasting success.
To learn more, contact the LBMC team today.