Becoming an efficient tax and accounting firm requires having the right people using the right technology and other resources for optimal success.
Today, firms are required to go beyond their competences of industry knowledge, to provide clients with better insights into their businesses and help them make decisions — along with having the right technology to support these capabilities. Indeed, firms that leverage technology can retrieve and provide the required information quickly to better assist clients.
In a new white paper, Three ways technology impacts your firm’s profitability, published by Thomson Reuters, discusses the ways tax and accounting firms can leverage their investment in technology and how that can pay hefty dividends in terms of efficiency, effectiveness, and client satisfaction.
Tax & accounting professionals are advisors
Clients have been a major driver in the evolution of tax and accounting firms, pushing their firms from compliance-centric work into the role of trusted advisors. The global pandemic that shuttered economies and resulted in federal economic relief stimulus packages made clients even more reliant on their tax and accounting professionals for guidance.
You can download the new white paper, Three ways technology impacts your firm’s profitability, here.
Clients now understand that most of their business decisions will have tax implications, so they consult with their providers throughout the year. So, whether tax and accounting firms are billing for advice given as a service or simply providing that work as part of an overall service package, a shift from provider to “business” partner and advisor has occurred. And going forward, firms must be prepared to provide this kind of full service to clients — and, as the white paper points out, the right technology is a key component in doing so successfully.
It’s time to move up — Why more technology is needed now
As the white paper details, here are several areas where technology is especially critical to tax and accounting firm success, including:
Competition — How do you stand out from the noise? The tax and accounting industry does not provide many ways for firms to distinguished themselves from each other — preparing taxes or auditing services are pretty routine. Therefore, firms have relied on strong relationships to build and keep clients; however, in the ever-evolving world, more is needed.
Firms must show they are agile and can provide current and relevant information to clients almost instantaneously. Having technology that organizes clients’ data and makes it available in an easily accessible and succinct way can enhance firms’ position in the industry (and in the minds of clients).
Better employee engagement — Research shows that money is not the only motivation for employees. They also want enriching work that is sufficiently challenging, with opportunities for growth in their current role or within the organization. Having technology that removes repetitive manual work, frees up employees to do more — including learning other aspects of the business. And that will make employees a greater resource.
Ultimately, allowing junior associates to service clients at a deeper level will free up senior managers and firm partners to deal with more complex issues. The bottom line: Leveraging technology will help engage your employees’ curious minds.
Touchless taxes are here — The IRS’s move to digitalization of the tax filing process has steadily increased over the years, and the pandemic only accelerated its pace. Firms are required to have technology that aggregate clients’ data and that can be filtered and flowed into automated forms. Having the right technology to accomplish this will reduce errors and increase efficiencies, making it easier to be compliant.
What comes first, next?
Understanding the need for technology can be daunting and overwhelming. Navigating the noise of what technology is needed and when can be paralyzing. It is important to prioritize purchases but before starting, of course, and firms should conduct a thorough analysis of their current technologies — are they outdated? Are they efficient?
During this process, crowdsourcing employees’ input is necessary; their feedback provides a comprehensive view of how technologies currently are used in the firm. This will also reveal where gaps and inefficiencies are in the way when employees are working. And when inefficiencies are identified, encourage employees to share a wish list of technologies that could improve their work processes. Once you have this list compiled, it should be able to guide you on where to start.
The next step is to prioritize what technology is needed most immediately. To get there, you should ask the following questions:
- What problems are being solved by use of this technology? Will it positively improve how staff works? Does it improve productivity by reducing or eliminating redundancies and manual work?
- What is the cost to not only acquire this technology, but maintain and support it as well?
- How long is the implementation cycle? Is there a disruption period to the current work process? If so, how long will that be? Can employees train themselves or will we have to hire an outside consultant?
The answers to these questions will offer insight into how best to approach rolling out any new technology initiative.
Every year, Accounting Today publishes a list of tax and accounting firms “that are embracing technology and leveraging it to build more responsive, more profitable and more sustainable practice.” There are a few criteria used for selection that firms may consider as they embark on their technological journey, such as the ability to:
- work with clients seamlessly and in a deeper manner;
- build a culture of partners and associates that embrace technology with an agile mindset;
- harness the value and power of data, information, and knowledge to offer better insights to clients; and
- enable associates to provide far more value using automation and better knowledge and resource management.
