The Art of Accounting: A Guide to Accounts Receivable Services

This column is a review of an exciting new book, “The Definitive Success Guide to Client Accounting Services (CAS)” by Hitendra Patil. I remember calling Hitendra a few years ago about an article he wrote on CAS to ask him what CAS stood for. Today, CAS is an essential service that can only grow much more than it has already.

CAS is an outsourced bookkeeping service performed for clients, replacing their in-house bookkeeping and accounting service. This allows clients to shy away from non-core functions, relieving them of focusing on the important revenue-generating functions for which they created their business. This also applies to non-profit organizations so that they are free to devote their energies to their core missions.

It sounds like a simple premise, and it is. It is surprising that it has taken so long to become a service that accounting firms are doing their utmost to provide. In fact, when I first started my practice most of what I did was CAS, except we called it debriefing and whispered that we had. At that time it wasn’t considered “professional”, but it was bread and butter for most of us. During my first job, I went to a client’s house at 9:00 a.m. I wrote his books by taking checkbook transactions, entering checks and deposits, and doing a bank reconciliation for each bank account. I entered sales invoices and customer payments into an accounts receivable ledger and wrote statements to mail to customers (even stuffed them in mailing envelopes).

I entered the payroll after the fact, but left the client with a list of checks to write each week for their employees until my next scheduled visit. Then I calculated the tax payments and wrote these checks. I recorded everything in the general ledger, made a trial balance and prepared a financial statement. I also completed the sales tax and payroll tax returns, wrote those checks, and sat with the client for a few minutes while they signed everything, including my boss’s check. I brought the check back to the office, along with the financial statement I prepared for my boss to review, type in, meet with, and chat with the client about.

Some larger clients had accountants, but I still posted the ledger and prepared the tax forms. In a way, it worked well. As clients grew, they added bookkeepers and then controllers, but my boss worked as CFO and senior business advisor. At one point, IT processes were used. It added changes and iterations and reduced the “push the pencil”, but while my job has changed, my boss’s has not. He remained the client’s trusted advisor, but with even more data, information, tools and the ability to deliver it faster and closer to when the business took place. I started out as running CAS, and today most small and larger businesses are adding this service and many are promoting it aggressively.

CAS, as Hitendra explains, is a cookie-cutter service for the repetitive part of services and an advisory service for the most valuable advice and support that businesses and nonprofit clients need, at costs significantly lower than the value supplied. The author argues that accounting is not a service profession, but a knowledge profession with services the mechanism for delivering the benefits of our knowledge. It’s a real how-to guide with descriptions and explanations of how to perform each step of the process, and how to market, bill, and use CAS to set the stage for becoming the client’s trusted advisor. Even if you don’t want to offer such services (who wouldn’t?), This is a good guide to running an accounting firm or niche segment, no matter what niche you want to introduce. There are also downloadable spreadsheets and charts.

This is an excellent book and I highly recommend it not only to be read and absorbed, but also to be used as a source of reference afterwards.

The book was published by CPA Trendlines and when you order it you can get 25% off using my discount code EdSentMe.

Do not hesitate to contact me at [email protected] with your questions about the management of your practice or about assignments that you may not be able to perform.

Kristan F. Talley