Client Assessments: The CAS Secret to Success

What is a Client Assessment?

A client assessment is a process that client advisory services (CAS) teams use to obtain information and data from a prospective client to inform pricing, identify value-added services, and determine if they are a right fit for the firm. The information gathered and used for client assessments varies widely in the industry, but typically, high-level financials or tax returns are the minimum amounts of data needed.

Client assessments may involve the use of various assessment tools and software that help a CAS team analyze the client's financial data and identify opportunities where their expertise might be able to help. At the end of the assessment, information is presented to the client as a project proposal that includes the price and other key terms for the engagement.

Best-in-class CAS teams perform Client Assessments using this 4-step process:

1. 1.Initial Scope Conversation: The first interaction with a prospective client, which could be over a Zoom call, in-person, or via email/online forms. This time is spent getting to know the client, asking basic questions about their business, and familiarizing yourself with what they are looking for in an accounting partner.
2. 2.Info / Data Request: Information gathering by requesting both qualitative and quantitative information about a prospective client’s current operations, asking more questions about their pain points, and where they think they need help.
3. 3.Complete Analysis: Based on the information received, this part of the client assessment process typically includes an analysis to compare to your internal price scale, identify any insights you can provide up-front, and determine if they are a good fit to take on.
4. 4.Proposal Walkthrough: Taking the prospective client through a proposal that outlines how you can help, the value that you bring, and how much your services will cost.

Why are Client Assessments Important in CAS?

Client assessments are essential in CAS for several reasons:

• ​They help teams better understand their clients' needs and expectations. By gathering information about the client's financial situation, the team can provide more effective and personalized recommendations for things that need to be addressed, trends that deserve attention, and areas of opportunity for the client. This initial assessment provides a roadmap for the overall engagement.
• ​A thoroughly performed client assessment is essential to enabling the successful execution of CAS services, as it prevents the team from incorrectly scoping the client. The amount of work needed may be significantly higher than originally discussed. A proper assessment at the onset helps prevent situations where the firm must do costly work for free or renegotiate pricing, which can strain the relationship.
• ​Client assessments help build trust with clients. Having a solid proposal and project plan priced accurately helps to prevent the awkward situation of having to ask the client to pay more. By taking the time to understand their financial situation, CAS teams demonstrate that they care about the client's financial success and are invested in helping them achieve their objectives. This builds trust and strengthens the accountant-client relationship.

How to Conduct a Client Assessment in CAS

Conducting a client assessment involves several steps that may vary from team to team. Generally, CAS teams typically follow these steps:

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  Gather Financial Information About the Client: Begin by gathering basic financial information about the client, such as income statements, balance sheets, cash flow reports, tax returns, or other financial data. The easier you can make this process for the potential client, the better. Tools like Crunchafi Data Extraction make it possible to gather this information securely in a single click.

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  Review the Financial Information: Senior leaders should review data to assess the financial health of the business, their finance function, and internal processes. Are the books clean and in order, or is there work to do before you can begin your services? Does the story the client tells match what’s in the books?

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  Prepare and Share the Pricing Proposal: Based on what you uncover in the financial data, prepare a proposal for the client. Sharing data visualizations may be helpful for clients to relate to and understand what you’re telling them. Not all clients will have financial backgrounds and may need extra explanation, not just on what services you recommend, but also why they are needed. Demonstrating expertise and value will justify the price presented.

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  Sign the Engagement Letter: Prepare an engagement letter that encapsulates the responsibilities and obligations of both the CAS team and the client, including the price of the services. It is helpful to include a clause stating that pricing is based on the information received to date and is subject to change as additional needs are uncovered.

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  Review and Update the Assessment Regularly: The engagement will likely involve monthly reporting and/or check-in meetings. These touchpoints are crucial for delivering results and can also be useful to track the status of goals or objectives identified in the assessment and identify opportunities for upselling or cross-selling.

Best Practices for Conducting Client Assessments in Client Advisory Services

Regardless of the process, here are some tips to ensure your assessments are setting up both the individual engagement and CAS practice for success:

• ​Establish Clear Objectives: Establish clear objectives with your team for the client assessment before beginning the process. Also, establish clear objectives with the prospective client to keep your work and recommendations focused on helping them achieve their goals.
• ​Use Standardized Tools: Standardized processes and tools make growth accessible. Tools like Crunchafi Data Extraction provide consistent output so you can easily train your team and make reviewing detailed financials easy for you and the client. Utilizing tools that give you full financial information ensures accurate pricing and client satisfaction.
• ​Ask Open-Ended Questions: Encourage the client to provide detailed and informative responses with open-ended questions. This helps you understand what they are actually trying to accomplish and allows you to provide custom solutions. Open-ended questions can also help you understand the client's thought process and decision-making style.
• ​Consider Non-Financial Factors: Not all clients have strictly financial goals. They may be looking for ways to provide a better work-life balance or struggling with succession planning. By knowing both the numbers and the story, you’ll be in a much stronger position to provide options and insights as an ongoing advisor.

By following these best practices, CAS advisors can conduct effective and thorough client assessments that start the client relationship off in a strong position where everyone benefits.

Save Your Practice Hours with Crunchafi Data Extraction

Crunchafi Data Extraction is a tool designed to help with each step of the CAS accounting process. Here are some of the ways the software can help your firm perform CAS:

1. 1.Initial Financial Information Gathering: Crunchafi creates a read-only connection with a company’s accounting system or ERP in just a few clicks. You can then download an Excel file with all the detailed information you need without ever having to have access to the company’s books. The process takes about five minutes and is easy for even the most tech-challenged client.
2. 2.Completion of Financial Analysis: The Crunchafi Excel workbook includes tabs with clean lists of the chart of accounts, customers, and vendors. You can find a quick count of the number of transactions each month, as well as AR/AP agings, broken down by customer and vendor.
3. 3.Review and Breakdown of Analysis: The output includes industry-leading cash flow analysis that breaks down the monthly direct-method cash flow. Financial ratios, like profitability and liquidity, are also included and ready to go in a single click. These consistent outputs make it fast and easy to review the books accurately and produce the best possible proposal.
4. 4.Client Proposal Walkthrough: Crunchafi includes the client’s actual data that you can show, complete with professional, shareable charts and graphs. You can customize your output to match your firm’s branding so that each presentation has a consistent look and feel, without adding extra time to your workflow.

Crunchafi Data Extraction integrates with widely used accounting systems and ERPs, from QuickBooks Online to NetSuite. With SOC 2 and GDPR compliance, customer data is kept safe and secure from beginning to end.

Contact the Crunchafi team to find out how your firm can save hours in the data extraction and formatting process of your CAS client assessments.