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CPA vs. CAS Firm: Why Reliance Is as Important as Compliance



Businesses that are not yet large enough to require or afford a complete department of in-house bookkeeping and accounting staff, must find an alternative method for keeping a compliant back office. Decision makers inside these companies typically look to contracting an outside CPA firm to handle taxes and audits, ensuring the business's books are being recorded and operated honestly and legally.

While CPA firms have systems established to manage business regulatory compliance with ease, they are not designed to provide reliance. In other words, CPA firms typically cannot provide a back office on which business owners, CEOs and presidents can rely when it comes to making important business decisions with accurate and up to date actionable financial data. This is where client accounting services (CAS) step in.

CAS providers typically do not focus on filing taxes or performing audits, but many  can provide reliable and accurate management accounting in real-time, which empowers business owners to make data-driven decisions to improve operations, marketing, pricing and cash flow, while driving profits and growth.

What Is the Difference Between Reliance and Compliance Accounting?

The primary, overarching factor that differentiates a CPA firm's services from that of client accounting services is the difference between reliance and compliance. CPAs offer accounting services centered around compliance with respect to taxes and audits. Compliance accounting ensures everything that needs to be done, is done.

While CAS providers respect compliance and help establish systems that enable compliance, the services of a CAS firm focus more on reliance. Reliance accounting provides timely financial intelligence and actionable data upon which your business can rely.

Although compliance accounting is necessary to operate a business within the law, it only covers the bare essentials of bookkeeping and accounting, without utilizing available tools and technology to leverage the useful data housed in a business's back office.

With compliance accounting, you will operate legally. With reliance accounting, you will operate intelligently with absolute financial knowledge and insights that allow you to make data-driven decisions to drive profits and grow your business.

Click here to download: The Guide to Outsourcing Your Bookkeeping & Accounting  for SMBs

Save Tax-Centric Accounting for Tax Time: Why Choose Client Accounting Services?

Sure, taxes and compliance are important all year long. Focusing your back office solely on compliance, however, will not facilitate the improvement of your business by helping business owners make intelligent, data-driven business decisions the way management accounting can.

Consider the following ways in which management accounting with GrowthForce's outsourced, on-shore client accounting services will bolster your back office, as compared to services from an average CPA firm.

Three-Person Dedicated Team vs. Individual CPA

Clients benefit from a dedicated three-person team of industry experts with GrowthForce's client accounting services. Contracting with a CPA firm, businesses typically receive access to one certified public accountant. A three-person team means information is always available and reliable – even during vacation time, sick leave or employee turnover.

Your dedicated team will have access to a plethora of resources, ongoing training to stay up to date with the most recent industry changes and will be overseen by upper-level management, ensuring you receive impeccable services and accurate information.

Management Accounting vs. After-the-Fact Accounting

CPAs offer clients after-the-fact accounting. This means reports are generated on a regular but limited basis, only making financial information available after-the-fact.

The CPA's accounting model typically involves businesses handling their own payables and receivables in-house and then reporting all of the information at the end of the month. The CPA firm then codes expenses and updates the books to turn around financial reports generated from the previous month's financial data.

As a result, businesses partnered solely with a standard CPA firm usually only have access to month-old financial information without clear picture of their current financial status.

In addition, a CPA will typically provide tax-centric reports (such as alphabetized charts of accounts), which are useful at tax time, but less so throughout the rest of the year.

The accounting model of a CAS provider implements fully integrated bookkeeping, accounting, expense tracking and time tracking technology to streamline the record keeping process and facilitate the generation of real-time financial reports. As a result, business owners and decision makers have access to up-to-the-minute financial data and real-time insights into the business's current financial status. With the financial intelligence facilitated by management accounting, business owners and CEOs can make data-driven decisions at any time to generate revenue and improve cash flow, pricing, marketing, and profitability with key performance indicators, actionable insights and unit economics.

Time-Tested Technology and Methodology vs. CPA Management Accounting Services

Some CPA firms have begun to offer a limited scope of management accounting services to their clients. Although their efforts are commendable, they are new to the CAS field. As a result, most CPA firms have not established and tested their infrastructure for these services. This means they do not always use the most efficient or effective tools and technology and, due to a fundamentally different business model than that of a CAS provider, they typically do not have enough staff in place to offer sufficient coverage to each client. As a result, CPA firms tend to flounder when a client needs financial information in real-time.

On the other hand, CAS firms have been working for clients in a management accounting capacity since the formation of the cloud precipitated cloud accounting. As a result, clients who partner with a reputable client accounting services provider benefit from the use of the best bookkeeping and accounting tools available. CAS offers clients time-tested technology, infrastructure specifically built around the business model and processes that facilitate real-time collaboration and information.

Focus on Reliance, Take Care of Compliance

...and Still Spend 30% to 40% Less!

When your company shifts the focus of its back office from compliance to reliance, you will be able to drive profitability and growth using financial intelligence. With reliance accounting, your business will save money by operating smartly and efficiently, targeting marketing dollars to the most effective campaigns and by optimizing your pricing structure. In addition, the cost is minimal when compared to hiring in-house.

Even when businesses add GrowthForce’s client accounting services to a CPAs tax and audit services, they can save 40% to 40% over hiring in-house.

To learn more about management accounting and how you can start relying on your back office – rather than simply complying with it – contact GrowthForce today!

 Inaccurate financials = constant frustration. Is this how you want to run your business? Speak to an expert.

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