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How I Use a Free 30-Minute Financial Review to Convert Prospects into CAS Clients

Build Trust with Prospective CAS Clients in your Accounting Firm

Author

Luke Templin
August 14, 2024

In partnership with

Read Time: 4:56 minutes

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In one of our previous issues on Finding Advisory Clients through Strategic Partnerships, I discussed the power of teasers—how giving a glimpse of the value you can bring to a tax client can convert them into a CAS client. Today, I want to dive deeper into another strategy that's been effective for me: offering a free 30-minute financial review. This approach has helped me build trust with prospective clients and weeded out clients that might be more trouble than they're worth.

The Free Financial Review: More Than Just a Hook

I know of other firms that start charging clients by the hour the minute they open the books. They dive right into the numbers, regardless of the books' state. You could charge for that initial review, but I prefer a different approach.

Why? Because if I open those books and it's a complete train wreck, I'm not touching it until it's cleaned up. I'm not going to charge someone upfront to tell them, "Whoa, this is a mess." I also don't like charging for it because I want to ensure that I can help the client. If I can't make a significant impact, it's a lose-lose situation. They've spent money for nothing, and I've potentially got a client who's unhappy and could speak poorly of my services.

What I'm Looking For in the Review

During that free 30-minute review, I'm looking at several key indicators to gauge the health of the business and whether I can help them:

  • Bank Reconciliation: This is my litmus test. If their bank reconciliation is up to date and clean, it's usually a sign that the books are in decent shape. But if I see a lot of outstanding items, it's a red flag that cleanup is needed. If the books need to be in better shape, I suggest they speak with someone else to fix the issue before engaging me.

  • Balance Sheet and AR Aging: I look at their cash on hand. Can they afford to pay me? Do they have accounts receivable issues that I could help solve? Do they have a line of credit in place, or do they need one? Are accounts negative, which might indicate more cleanup work?

  • Income Statement: I want to see if they're profitable and, if not, why. If so, are their financials in line with their industry standards? Are their financials designed to tell a story? I typically re-engineer a new client's chart of accounts because most financials are designed for tax returns.

    Sometimes, I find businesses that aren't growing and need to determine whether they're just going through a rough patch or if they're on a sinking ship. I do not know about you, but I do not want to board a sinking ship.

  • Cash Flow Statement: I am looking to see if cash from operations is positive. If not, how are they funding the shortfall? If so, is overall cash flow positive? If not, is it due to owner distributions? Owners taking out a lot of money can be a challenging problem, so I want to start talking about distribution diets from the get-go to see if they are receptive to the idea.

  • Other Consultants and Accountants: I'm always curious to see who else they pay and how much. This gives me a gauge of their willingness to invest in advisory services and at what rate. If they're paying an EOS consultant $5,000 a day, I know they value this type of work and will better understand the intrinsic value of CAS.

    This also allows you to see what they have been paying your competitors. I would not recommend throwing a competitor under the bus, but you can inform the client how your process differs. For example, your competitor might bill by the hour and you do not. You could talk about how you are incentivized to make things more automated and streamlined, unlike someone charging by the hour.

The Follow-Up

After I've reviewed the books, I schedule a call to discuss my notable findings. This is where the magic happens. I'm not just dumping a bunch of numbers on them—I'm giving them clear items that need to be resolved and/or improved. This conversation often leads to a deeper engagement, where they see the value in bringing me on board as their advisor.

An example of notable findings

In conclusion, offering a free 30-minute financial review isn't just a lead generation tool—it's a vital step in ensuring that I'm the right fit for the client and that they're the right fit for me. It allows me to demonstrate my value upfront, build trust, and set the stage for a successful long-term partnership. So, while you could charge for that initial review, I've found that giving it away for free has helped build rapport with someone meeting you for the first time.

Thanks for reading, Luke Templin!

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