What firms are doing now and what they plan to add.
By CPA Trendlines
Some 90 percent of small firms and 94 percent of large firms are looking to technology to help achieve an improved tax season this year, according to a new survey.
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“Successful firms will leverage cloud solutions and advanced technologies to deliver higher-value advisory services, unlock new data-driven insights and enhance the client experience,” according to the findings.
Going forward, firms will move beyond:
- Compliance – to empower their staff to make informed decisions and add value for clients.
- Convention – to find new approaches for process automation across the firm.
- Integration – to unlock data across the business, harness deeper insights and improve productivity.
The new survey out of Wolters Kluwer Tax & Accounting drills down through the obvious – that the accounting profession is changing fast and technology’s part of the change – to reveal how firms large and small are actually using technology to thrive in a time of pandemic and upheaval.
The survey, “2021 Beyond Limits: The People, Processes and Technologies Driving High-Growth Accounting Firms,” finds that on average, the COVID-19 pandemic hasn’t hurt the accounting profession much at all. In fact, firms generally reported a good tax season this year and good growth in 2020 and 2021.
- Nine percent of all firms say this season was better than last year’s.
- Another 30 percent say 2021 was somewhat better than last year.
- Thirty-one percent say it was about the same.
- Large firms were substantially more likely to have seen a better season this year.
Most Firms Grew
Given the strife of the pandemic and the staggering economy, firms are generally doing well. Overall, 47 percent saw growth last year, and 55 percent saw growth this year. Only 19 percent saw a decline in 2020, down to 16 percent in 2021.
While half of small firms are seeing growth in revenue this year, a heady 72 percent of mid-to-large firms see revenues growing.
Technology may be the most significant factor that helped the profession in these times of trouble. No surprise, then, that an overwhelming 94 percent of large firms and 90 percent of small firms are looking to technology to improve their tax seasons.
The surprise is in how firms plan to use that technology.
- Sixty percent of large firms say technology is helping with staff engagement and morale.
- Forty-three percent of all surveyed firms are using tech to reduce their brick-and-mortar footprint and transition to virtual-only presence.
- Most of this year’s tax returns were prepared with zero in-office contact with taxpayers.
- Sixty-five percent of all firms are using just one or two software packages, indicating a high degree of integrated processes.
In a disturbing incongruence, however, only 7 percent of small firms and 2 percent of large firms believe they are fully (100 percent) maximizing the value of their current technology.
At the same time, only 32 percent of respondents are extremely confident that their firms are well positioned to handle all tech advances and tech-related challenges.
The Potentials
With so many firms still falling short of full technology implementation, the potentials for improvement are huge. Technology may be the unrealized focal point where staffing, administration, decentralization, client advisory services, solution convergence and reaction to changes all intersect.
Here are the new tools that small firms intend to add:
- E-signature solutions
- Client portals
- Document management and scanning solutions
- Tax return automation tools
Large firms intend to add those same solutions plus more sophisticated tools:
- AI tools to read documents
- Client data ingestion tools, such as solutions that collect and integrate data from various sources
The Great Resignation Opportunity
Firms are also discovering that technology is a partial solution to “The Great Resignation.” Across all industries, between 41 and 65 percent of employees are actively looking for new jobs. Half of them are willing to make a “major pivot or career transition.”
The survey did not measure resignation tendencies among accounting professionals, but it’s more than safe to say that the profession is hardly exempt. It has always suffered a shortage of qualified professionals.
But a tsunami of professional migration can work to the advantage of firms that see it as opportunity. If so many professionals are looking for a new job, it follows that the pool of potential recruits is huge.
How to attract them? The survey says tech’s the trick. It can be a powerful and versatile tool for retaining and attracting the best of professionals.
- Tech enables virtual and more flexible engagement.
- Tech reduces time spent on routine administrative duties.
- Tech reduces client response time and facilitates data collection.
- Tech reduces the pandemic concerns.
- Tech facilitates more interesting or satisfying work, e.g., client accounting services.
- Tech increases productivity by integrating solutions.
- Tech shortens or reduces the intensity of the filing season.
In other words, technology can be used for something other than crunching numbers. The new tech target isn’t accounting. It’s people.