Client advisory services (CAS) vs Fractional CFO Services
Services delivery focus from an accounting perspective. Fractional CFO services are solely focused from a forward financial perspective instead. I share more about the differences between accounting and finance in this other article. One is not better than the other, but the skillset and experience vastly differs between accounting and finance.
Client advisory services (CAS) are a combination of accounting services that supports businesses to improve their efficiency and manage risks. CAS can include bookkeeping, payroll, reporting, tax filing and planning, compliance, software management.
Typical services included in CAS
Bookkeeping: Recording transactions in an accounting system, reconciling accounts, and collecting client statements
Payroll: preparing and running payroll for employees and issuing quarterly forms for payroll taxes compliance
Reporting preparation: Creating and presenting financial records that summarize a business's performance and financial situation
Tax filing and planning: Helping clients with tax filing each year and tax planning for the upcoming year, which can be a common pain point for businesses and individuals
Compliance management: Keeping up with current rules and regulations, and handling due diligence
Software and compliance management: Accounting firms offer guidance and expertise on how to best manage their software systems. They assist in selecting the right software solutions, developing a software implementation, and maintenance.
CAS Benefits
CPA firms to handle financial and accounting tasks, streamline processes, and offer advisory services for business growth.
Cost Savings – Eliminate the need for hiring in-house accountant
Streamlining Accounts Receivables and Payables – Create organized transaction trails, tracking payments due, and payment collections in a standard way.
Risk assessment: Includes methods for fraud detection and risk management. Utilizing accounting systems and tools for internal control, audit trails, and alert systems.
Fractional CFO Services - Advisory, forecasting and strategy
Fractional CFO provides a high-level strategic financial advisor, executive-level financial comprehensive leadership on a part-time basis, while client advisory services can encompass a wider range of support, often including more tactical and operational aspects.
Typical services included in fractional CFO services:
Financial planning and analysis: Financial trends and insights, helps provide the business with data to make better financial decisions
Financial Scenario planning: consider most likely possibilities of opportunity and risk before making a decision
Consulting and advisory services: CFO perspective, experience, expertise, benchmarks shared to ensure a clear financial path forward
Financial planning and forecasting: Forecasting cashflow, revenue, expenses and making adjustments quarterly as the business evolve
Financial strategy & risk management: evaluate new opportunities to expand product lines, explore new territories, expand service offers, pricing strategy, and setting the right financial direction while mitigating risks that can be costly.
Business finance performance: Creating a budgeting to allocate resources in the right bucket that aligns with strategic financial plan, and tracking against budget every month to ensure healthy financial performance
Cost analysis: Run analysis on decision around buying and leasing, benefits or one versus the other, and making a recommendation.
Defining business KPIs: from leading and lagging indicators, measuring progress and traction on key indicators that will drive financial performance for the company
Benefits of a fractional CFO
Increases company value: Help businesses reach goals faster with improved profitability, focused on creating new opportunities for growth and streamline costs
Business Partnership: bringing a high level executive with a financial focus to partner on decision making to improve the future of the company without sharing equity
Cost savings: a part-time fractional CFO provides the same level of expertise and experience for a fraction of the cost that a full-time CFO would get compensated. The new value creation will outweigh the investment in a fractional CFO.
A case for Fractional CFO Services
CAS includes more tactical and operational aspects from an accounting perspective while fractional CFO services provide strategic financial advisory and consulting services to your business. Depending on your stage of growth, you might need more accounting or finance support but regardless your business can benefit from forward planning and strategy at every stage.