What are the biggest challenges for today’s tax and accounting professionals? Wolters Kluwer Tax & Accounting has the answers. According to its 16th annual survey, cloud-based technology is driving gains in efficiency, productivity, revenue and profitability among accounting firms of all sizes. The “Wolters Kluwer Annual Accounting Industry Survey,” queried nearly 2,000 firms.
Firms using a cloud-based tax compliance solution reported higher revenue growth than traditional firms (7% to 4%, respectively.) Innovative and early-adopter firms were also 13% more likely to add services.
In 2022, the top challenges firms faced varied by size
In 2020, firms of all sizes were mired in navigating the daily challenges of a global pandemic. In 2021, firms grappled with rapid legislative changes and found ways to work effectively with the IRS. In 2022, the most pressing challenges firms face varied, based on firm size.
- In 2022, half of this year’s survey respondents reported late or unprepared clients to be a top challenge.
- Only two challenges—economic uncertainty and keeping track of new or changing regulations and standards—were expressed as a top five challenge faced by firms of all sizes.
- Midsize firms were most concerned about economic uncertainty, large firms were most concerned about retaining/attracting talent.
- Midsize and large firms are trying to keep current with technology and learn to use their technology more effectively.
2023 goals: Firms are prioritizing revenue growth, efficiency and client engagement
Firms of all sizes ranked growing revenue/profit as their top goal for 2023, followed by improving customer engagement. Additionally, 85% reported that their clients want strategic tax planning and advisory services.
Given that recruiting and retaining talent emerged as a top-five challenge among mid-sized and large firms, it is not surprising that improving operational workflows and employee effectiveness ranked No. 3 and No. 4 on the overall list of firm goals for 2023, followed by investments in new technologies that support remote work.
Future-focused firms are using technology to deliver new services while driving staff efficiency and engagement
While the global pandemic significantly accelerated the pace of digital transformation within the tax and accounting industry, the majority of firms indicated that investments in integrated, cloud-based technology are paying off, and most said that the pace of technological change is “about right.”
- 78% of firms are leveraging technology to help employees expand skill sets, while 64% are using it to improve staff engagement and morale
- 77% said that technology is helping them reduce the number of hours worked, per client, and per return
- 73% said technology is helping improve average client response time and 72+% said technology is helping them recruit and retain clients
- 62% said technology is helping them add new services
Notably, the survey also revealed that less than 20% of firms feel they are using their tech stack to its fullest potential – despite two-thirds reporting that technology improves their ability to compete. This suggests that there is significant potential for firms to further improve returns on cloud-based technology investments going forward.
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