2024 CPA.com CAS Benchmark Insights: Part 1

Read Time: 5:00 minutes

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The CAS Benchmark Survey by CPA.com for 2024 is here, and as always, it’s a treasure trove of insights for accounting firms offering CAS. I couldn’t resist diving into the key insights to provide my thoughts. I will focus on insights 1 through 4 and share how they align with my experience building CAS offerings. I will cover the remainder of the insights in the next issue.

Insight 1: CAS Growth Continues to Be Solid

CAS is still the fastest-growing service area in the profession. Practices reported a median growth rate of 17%—another year of double-digit gains. Even more exciting, firms are projecting 99% growth over the next three years, signaling their confidence in CAS as a cornerstone of accounting firms in the future.

My Take on Insight 1

This isn’t surprising—clients and staff both want CAS. However, the real benefits are recruiting and retention. Younger staff members are looking for meaningful work, and what’s more fulfilling than guiding business owners in growing their businesses?

My accounting recruiting friend also informs me that almost every person he talks to in an accounting role wants to be a CFO, but few realize the long journey that entails. By equipping staff with the tools and opportunities they need, we can guide them toward that coveted title faster than traditional pathways ever could.

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Insight 2: Firms Can Increase Revenue by Expanding Their Higher-Level Service Offerings

The survey highlights that accounting firms offering higher-level services like fractional CFO and business insights achieve significantly better financial results, including over 30% higher monthly recurring revenue and client fees. However, these services remain underutilized, with fewer than 40% of firms actively delivering them as a core offering.

Top-performing firms are more likely to bundle such services with transactional accounting, enhancing margins and client value. This underscores the need for accounting firms offering CAS to shift away from one-off projects, focus on recurring advisory services, and leverage financial and non-financial insights to support strategic client transformation and drive growth.

My Take on Insight 2

This one resonates deeply with me. I’ve had conversations with accounting firm partners who blurred the lines between one-time projects and recurring CAS. Focusing on recurring revenue has benefits that go far beyond stability—it’s a game-changer for hiring. You can justify bringing in top talent when you know your revenue streams will not fluctuate wildly from month to month. One key to CAS is having dedicated staff working on it full-time.

Business insights can be lucrative, and including non-financial data is key. From my experience selling PowerBI dashboards, you need the right client aviator and technical team member. Businesses must be on the high end of local success stories (see infograph below) to afford a $10k+ business insights investment, and it is hard to find a dual-propose technical team member (building dashboards and doing other accounting work). Therefore, I would not recommend business insights for smaller firms (under $5 million). Instead, these firms should look for an outsourcing partner.

Insight 3: Strategy and Planning are Key to a Successful and Profitable CAS Practice

Strategic alignment within the firm is non-negotiable. The survey highlights how top performers are likelier to have a formal, written CAS business plan. Firms with such plans reported higher annual client revenues, better growth, and even higher typical monthly fees.

My Take on Insight 3

If you’ve been following the newsletter for a while, you know I’m a big fan of creating strategic alignment with something simple yet effective, like EOS. (If you missed it, check out my earlier piece on How to Get Started with EOS). Alignment isn’t just for leadership—it’s for everyone in the firm. In my experience, tools like lunch-and-learns and one-pagers are great for spreading the vision firm-wide. Stay tuned for more on that in a future issue!

Insight 4: Defined Client Niches Drive Efficiency and Profitability

The data shows that firms focusing on specific client niches see significant benefits. These firms report higher growth rates, better revenue per client, and improved CAS profitability. Standardizing processes within defined industries leads to efficiency gains that benefit the firm and its clients.

My Take on Insight 4

Niching comes with risks, as industries vulnerable to economic shifts can leave firms overexposed during downturns. To mitigate these risks, firms should carefully evaluate a niche’s long-term stability and consider diversifying within it to hedge against volatility.

While my firm has a broader client avatar focused on trade and professional service companies, this approach allows flexibility in consulting on universal pain points like pricing and compensation.

However, if scaling were my goal, I’d hone in on one or two industries to enable targeted marketing and streamlined operations, following the clear advantages outlined in the survey.

Final Thoughts on Part 1 of the 2024 CPA.com CAS Benchmark Survey

These four insights underscore the importance of intentionality. Whether it’s fostering staff development, avoiding distractions like one-off projects, aligning the team strategically, or narrowing your focus to client niches, the data shows that success in CAS is no accident.

Next time, we’ll explore insights 5 through 7, where agility, technology, and pricing take center stage. Until then, I’d love to hear your thoughts: Which of these insights resonates most with your CAS journey? Reply to this email, and let’s keep the conversation going.

Thanks for reading, Luke Templin!

P.S. There are three ways I can help you grow your CAS offerings when you are ready:

1. Join my How to Start Offering Advisory Services Cohort. The next one starts in May.

2. Cannot wait until May? Check out the pre-recorded version here.

3. Automated financial digests for your clients with FinDaily.io