It’s the goal of every accountant and CPA firm to be the trusted advisor to their clients. But to achieve this, you need to deliver constant communication, consistent value add and dependable service that’s entrenched in multiple facets of your client’s business.
This was our aspiration when we created GrowthLab, a Finance-as-a-Service (FaaS) company that supports start-ups and operating companies with Financial Planning & Analysis (FP&A), Accounting, Tax, and CFO services. Like many CPA firms that offer outsourced FP&A services, we strive to achieve the trusted advisor status by acting as an extension of our clients’ management teams. We do this by focusing on the same three pillars that made us successful in building our other accounting and finance divisions: cadence, rigor and team.
If you’re looking to build your firm’s FP&A practice, you can use these pillars as a framework to develop your service offerings, regardless of client type, size and needs. You should also be acutely aware of your firm and team-level capacity and capability. Takt time, widely used in manufacturing to measure the average time interval between the start of production units, is one metric that might be useful to your firm in measuring and optimizing your workflow to meet client demand.
The framework: 3 pillars
Since timing is everything, the first pillar is cadence. Cadence defines “when” and “how often” you’re interacting with clients. Just like tax or bookkeeping, timing dictates deliverables in our FP&A services. FP&A cadence is grounded in the annual strategic business cycle and, at best, an accounting calendar. The annual strategic business cycle is meant to not only set the cadence, but to define the underlying rigor.
Rigor is the second pillar of our framework. Rigor defines the “what” you are delivering. For every business, there are consistent “things” that come up throughout the year. Most CPAs are already touching one or more of them – annual taxes and year-end cleanup. At GrowthLab, we align both the deliverables to the annual strategic business cycle.
This cycle is a series of financial and business strategy outputs that organizations should be leveraging to touch every function of their business. Our FP&A services have a unique deliverable every month. For example, coming into the end of the fiscal year, we’re focused on the Annual Operating Plan process, or the Long-Range Planning process in the end of Q3. The annual strategic business cycle is a great way for trusted advisors to define constant and consistent deliverables and communication throughout the year.
Firms should also aim for 80% standardization with 20% ad hoc analysis. Productization is critical in FP&A and CFO services to deliver those timely and high-quality services cost effectively. For growing FP&A firms, cadence and rigor must be managed using scalable workflow systems.
The GrowthLab Four, which are four areas that challenge most entrepreneurs and business leaders, is the overarching theme in our communications with our clients. They include:
- Understanding your clients’ cash flow
- Understanding where clients are making and losing money
- How to market for profit
- How to pay for performance
Inherently, product standardization de-risks the quality aspect of cadence. A key to success is understanding how to create efficiencies without losing effectiveness. Having a tech stack helps improve quality while achieving cost efficiencies. There are many dashboards, spreadsheet templates and planning software, yet we’ve started to migrate many of our client’s financial models to Jirav, an all-in-one financial planning & analysis tool, to improve efficiencies.
Now that you have cadence, which is the “when” you’re delivering, and you have rigor, which is “what” you’re delivering, you can begin to build the third pillar: the team. In the beginning, the team may just be you. But just like in your other divisions or service offerings, you build an organization with an eye toward leveraging human capital—people. At GrowthLab, we do that by ensuring we have the right mix of capability and capacity to execute on the client’s needs, which are grounded in cadence and rigor.
Next steps for building an FP&A practice
As you think about the importance of strategic planning for your clients based on cadence, rigor, and team building, incorporating your FP&A practice into your existing bookkeeping, accounting, and tax divisions provides the building blocks to creating a full stack Finance-as-a-Service company. Now, your firm is truly set up to become an extension of that client’s team.
We find that these three pillars are important as you build a profitable FP&A practice. We’re not selling fractional CFO services—we’re providing ongoing, recurring cost-effective monthly services to our business clients, profitably.
If you’re interested in learning more about how to build a successful FP&A practice, CPA.com has a breadth of resources to guide you, including a free on-demand webinar, as well as whitepapers, case studies and more.
