Key insights:

• • • Technology is a priority 鈥� Those tax, accounting & audit firms that are prioritizing technology to increase efficiency and profitability are already seeing improved efficiency.

    • Strategic planning is essential 鈥� While technology is crucial, many firms still lack a formalized growth strategy, which limits their ability to extract the most value from their technology investments.

    • Positive financial outlook 鈥� Despite challenges, tax firms are in a strong financial position, with 65% reporting increased revenue in the past 12 months and 45% seeing profit growth.

For today鈥檚 tax, audit & accounting firms, there are a number of differing pathways to reach growth and profitability. Many are expanding their service offerings, such as a move into advisory services; some are looking to increase headcount, betting that more personnel can translate into more work from clients. And a portion are even looking into outside investment, such as from private equity firms, hoping that a bolstered bottom line can help them get a jump start on the competition.

Yet no matter the growth strategy, there is one paramount priority among all firms today: technology, which they see as a necessity to gain greater efficiency. Indeed, improved efficiency and adding more technology are tax firms鈥� top priority for the coming year, and in turn, greater use of technology is seen as the dominant strategy to drive firm profitability, according to the recently released 2025 State of Tax Professionals Report from the 成人VR视频 Institute.

Tying technology to overall growth, however, may be easier said than done. Many firms still have not formalized their growth strategy, and a number are still trying to optimize use of their current technology, let alone keep up with new innovations such as generative AI (GenAI). As a result, technology may be the primary way firm leaders wish to increase profitability, but they need to focus more on strategic planning to better extract value from that technology in order to succeed.

The importance of efficiency

Overall, today鈥檚 tax, audit & accounting firms look to be in a strong financial position. Almost two-thirds (65%) of survey respondents report that their firms saw increasing revenue in the past 12 months, while 45% say their firm鈥檚 profit has grown, too. Similar percentages also report expecting their firm to increase revenue and profit over the upcoming 12 months as well.

Even with these positive indicators, however, many firm leaders indicate there is more room for growth. In particular, many are pointing towards technology as a potential area of interest, with nearly half (49%) of respondents saying their firms are actively applying greater use of technology as a growth strategy, while an additional 32% said their firms are considering technology usage as part of their growth strategy.

This is perhaps no surprise given the tax industry鈥檚 need to do more with less. Previous years鈥� iterations of the Tax Professionals Report have highlighted the recruiting and talent struggles facing the industry, and this year is no exception. Hiring, attracting & retaining talent, and staffing matters still rank among the top challenges for firm leaders, and as such, it鈥檚 no surprise that firms are turning towards automation to fill those gaps.

New advanced tech tools such as GenAI are increasingly included among those strategies that leaders see that could make up for talent shortages by providing more efficient tax return preparation, regulatory research, and document summarization and review, among other tasks. According to the report, however, while firm leaders are interested in GenAI and other new technologies, they鈥檙e still looking to extract more value from the technology tools they already have first.

Indeed, when many firm leaders talk about technology driving growth, it may not be that they鈥檙e really considering investing in new technologies at all. Many firms have invested heavily in technologies in recent years, but don鈥檛 actually get the most value out of those new systems because they are left unused, or because tax professionals are untrained and don鈥檛 use the systems properly 鈥� or even because client demands do not align with the technologies that firms have put in place.

When firm leaders want technology to drive their future, what they really want are more efficient processes and procedures that technology can bring, allowing them to do more with less.

A strategy for technology

With that in mind, how can tax, audit & accounting firm leaders extract the most value from their technology purchases, both new and old? It starts with tying technology usage to the overall growth strategy of the firm.

In some ways this should be straightforward, given how many firm leaders cite efficiency as one of their foremost goals. For some firms, however, tying technology to strategy may run into a fundamental problem: They don鈥檛 actually have a directly defined growth strategy. This is true particularly for smaller firms (those with 1 to 3 employees) at which only 26% of respondents said their firm had a defined growth strategy. However, even in midsize firms (4 to 29 employees), just 40% of respondents said their firm had a defined growth strategy.

Given that, getting the most out of technology may require firms determine a defined strategy for growth first. That strategy can have a number of varying facets, but of those firms that do have a growth strategy, it鈥檚 no surprise that technology and growth are intertwined. About two-thirds of respondents report greater use of technology and automation as a part of that strategy.

With a growth strategy in place, firm leaders should then more easily be able to invest in technologies that would align with that strategy. For example, firms that include growing the client base as a core tenant of their growth strategy may want to invest in marketing and business development technologies, or explore which of their pre-existing technologies can be leveraged for that purpose. Firms looking to grow by moving into advisory services for the first time, meanwhile, may be looking to leverage technologies such as GenAI for idea and document generation.

Regardless of what direction that growth strategy may take a firm, it鈥檚 clear that technology will likely play a major part in its future. Not only are clients clearly indicating that they want their outside tax firms to do more with less, but those firms now see that technology is having a positive impact on their bottom line.

As the Tax Professionals Report notes: 鈥淢any people have concerns about the impact of AI and other emerging technologies on how professional services are managed and delivered, but the evidence thus far suggests that the onward march of technology is helping (not hurting) accounting firms鈥� ability to provide the services and guidance their clients want and need.鈥�

You can download a full copy of the 成人VR视频 Institute鈥檚 2025 State of Tax Professionals Report here

Indeed, growth has surged as the second-highest strategic priority for firms worldwide, jumping from fifth place in 2024, according to the 成人VR视频 Institute鈥檚 2025 State of Tax Professionals Report.

That means, for tax firm leaders who are considering their growth options 鈥� whether planning for a merger, acquisition, internal succession, or just a more profitable future 鈥� it is critical for them to understand their firm鈥檚 valuation and the strategic underpinnings of scalable growth.

The report shows that over the past five years, the tax, audit & accounting industry has experienced increased consolidation, driven primarily by mergers and acquisitions (M&A), private equity interest in the industry, and contraction in the available pool of talent. At the same time, clients are indicating that they want their outside tax firms to offer more advisory services and new non-traditional competitors, such as tax-focused fintech firms and AI-powered platforms, are entering the market.

In response, tax firm leaders should be asking some variation of the following three questions:

• • • How do we stay competitive and attract the right clients?
    • Are we building a firm that will be desirable to a buyer or to the next generation of partners?
    • What is our firm worth, and how do we increase that value over time?

Factors that drive valuation

Valuation is about more than revenue. A buyer or successor is buying into the firm鈥檚 future 鈥� such as what potential revenue opportunities exist or can be created 鈥� not the past. While historic financial performance is foundational, tax firm value should be based on the following:

Recurring revenue and client mix 鈥� This can be a key indicator of a firms鈥� value. Firms whose business is primarily seasonal tax prep without any significant ongoing advisory work are clearly less valuable than those firms that can offer that. With the increase of tax prep work automation, clients can become agnostic as to where their tax prep work is done; or even may decide to utilize tax tools for themselves, depending on the levels of complexity they require. Thus, an outside tax firm that has a mix of tax prep and strong advisory service offerings may have the breadth in revenue stream and the potential for increasing offerings that makes it more valuable.

Owner dependence 鈥� If the survival of a firm is solely or mostly dependent on its founders or some of its partners its value is inherently less. For example, if the founder or key partner is hit by the proverbial beer truck and all or most of the firm鈥檚 clients head for the door, the firm will likely go under. This clearly isn鈥檛 a sound business model, and no one likely would invest in something that seems so tenuous. For most owners and founders the tendency is to do all or most of the heavy lifting work because they know what they want to get done. However, if firm growth in anywhere in your valuation consideration, then firm leaders should delegate to ensure clients not only have strong relationships with the owner, but with the firm鈥檚 entire staff.

Technology & operational efficiency 鈥� The Tax Professionals report highlights the correlation between a firm鈥檚 desire to grow and the understanding that to drive efficiency you have to utilize advanced technology. Today, tax firms still using outdated technology or those that are mired in manual processes will be unable to scale up enough to become attractive to a buyer, investor, or even potential talent.

Staff & culture 鈥� As the war for talent rages on in the tax, audit & accounting profession, those firms with stable, engaged teams obviously are more valuable than those with high turnover or looming mass retirements. Firms that foster a culture of strength and flexibility are more attractive to potential buyers, whether through M&A or private equity investment.

Brand & market position 鈥� Naturally, a firm brand and where it sits in the market is a significant valuation factor for a potential buyer or investor. Firms that operate in a profitable niche and have a strong reputation are clearly more valuable, period. For example, a firm specializing in an industry can position itself as an expert and therefore attract and retain clients in those target markets.

What growth really requires

For many tax, audit & accounting firms, growth isn鈥檛 just about adding more clients or increasing revenue. It鈥檚 about building systems, teams, and strategies that create sustainable, transferable value. In terms of being truly strategic, firm leaders should start by looking at their roster of clients and how each is served and priced. Knowing where each client resides 鈥� as high-value or low-margin customers 鈥� is the first step to making the necessary adjustments and focusing on more productive relationships.

Similarly, if growth is top of mind, then so must be succession planning. Firms that want to grow and retain value need to identify and groom future leaders early. This includes not just offering technical training, but also providing leadership development, creating equity pathways, and establishing client relationship handoffs.

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Further, investing in technology and client experience is no longer a nice to have, it鈥檚 an essential requirement. Most of us live in a world in which we expect immediacy and ease for everything, and tax firm clients are no different. They now expect fast responses, online access, and proactive advice 鈥� not just a completed tax return each year. Firms that invest in client relationship management systems, client portals, and advisory frameworks are better positioned to retain clients, charge premium fees, and scale effectively than those firms that don鈥檛.

Yet, despite best intentions, some firm leaders fall into avoidable traps on their path to increasing valuation, including:

Focusing only on tax season 鈥� Firms that don鈥檛 develop year-round advisory-based services miss major opportunities for revenue and client loyalty.

Underpricing services 鈥� Undervaluing your firm鈥檚 own expertise hurts margins and attracts the wrong type of clients.

Failing to document processes 鈥� Institutional knowledge can become trapped in the owner鈥檚 head, which limits scalability and valuation, and is disastrous should a sudden loss of owner occur.

Ignoring succession planning 鈥� Similarly, many firm leaders wait too long to think about a transition to new leadership or managerial talent, which can result in the loss of firm valuation, key talent, and most importantly, clients.

Much like test driving a vehicle before you need one, firm leaders should get a fix on the valuation of their firm before any transaction or major change. Determining a baseline valuation is a good exercise that can help set goals and spot red flags. Based on the valuation data, firms then can use the information to help move everything forward, from streamlining processes and automating operations to defining ideal clients and what type of additional services (think advisory) the firm could offer or what other revenue opportunities it could pursue.

The foundation of a more valuable and scalable tax, audit & accounting firm isn鈥檛 built on working harder every tax season; rather it鈥檚 built on making intentional decisions, creating repeatable systems, establishing strong teams, and forging a deep understanding of what drives value in today鈥檚 tax, audit & accounting firm market.

You can download a copy of the 成人VR视频 Institute鈥檚 2025 State of Tax Professionals Report here

Jump to 鈫�

2025 State of Tax Professionals Report

This annual report surveys hundreds of accounting professionals from around the world to gain insight into their top priorities and biggest challenges, as well as what actions they鈥檙e taking to meet those challenges.

A profitable year

In the 2025 report, it鈥檚 clear that tax, audit & accounting firms have accepted the fact that certain types of routine tax work can and should be automated. Leaning on technology in this way has allowed firms to diversify their service offerings to clients into such areas as tax strategy and business consulting 鈥� key services that clients have been requesting and for which they are willing to pay top dollar.

And the strategy is working. According to the report, firms worldwide recorded an average revenue gain of 21.3% in 2024, resulting in an average profit rise of 25%.

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Tax, audit & accounting firms still have plenty of challenges, however. According to the report, the most formidable challenge that firms are facing is attracting, hiring, and retaining quality talent. And causes of this talent shortage are many-fold, according to survey respondents, as are the strategies firms are using to fill skills gaps and enable senior staffers to make more efficient use of their time.

Beyond talent, the other challenges that respondents cited included keeping up with rapidly changing regulations and tax law and enacting better time management. And while technology is seen as a good solution to many of these challenges, it comes with its own difficulties. The time and effort spent learning and using new technologies is one obstacle. Another challenge is how to properly incorporate AI-driven tech solutions so that they complement firms鈥� existing technologies and provide the most benefit possible.

Top priorities for 2025

The report also explores in depth what priorities accounting firms are focusing on in 2025 and their strategies for achieving the goals they have set for the year.

As in past years, the top priority for accounting firms in 2025 is improving operational efficiency, primarily through more strategic use of various technological resources. This year鈥檚 analysis is a bit different, however, because technology isn鈥檛 being used just to create more efficient workflows 鈥� it is being deployed strategically to improve profitability.

Indeed, almost half (49%) of the survey鈥檚 respondents report that technology figures heavily in their plans to improve profitability. More lucrative services and greater responsiveness to clients are the primary ways in which modern tax technologies are contributing to the bottom line, according to respondents. The success firms are having with such strategies is also why, according to the report, the only budget item to see a significant increase in 2025 is investment in AI.

Respondents also cited other priorities, including a focus on firm growth and expansion of the client base, along with an expansion and improvement of client service offerings. Many firms are also exploring various pricing options that clients may prefer.

The push for growth

Another major theme of this year鈥檚 report is how firms are engaging in an aggressive push for growth, especially among midsize and larger firms. Again, technology is at the heart of this desire for growth, because it makes the imperative to grow both necessary and possible: necessary because competition for high-value clients requires a broader range of services that are enabled by superior tax technology; and possible because modern tax technologies and data-analysis tools now allow firms to provide higher-value advisory services to their clients.

Of course, this path to growth will require firms to ask themselves some deep questions, such as: Which additional advisory services are the most profitable for them? Beyond expanding client-desire advisory services, what new services can firms offer in the coming year? And how will technology impact the competition for high-value services and key clients?

As growth and technological innovation become even more intertwined today, the report shows that tax, audit & accounting firms that can successfully integrate AI-driven technology to improve their operations while strategically competing for high-value clients are the ones that will flourish in the time ahead.

You can download

a full copy of the 成人VR视频 Institute “2025 State of Tax Professionals Report” by filling out the form below:

According to the report, the need for improved efficiency is being driven by the number one challenge that tax & accounting firms are facing: The lack of or limited number of qualified candidates. This includes people with not only tax skills but technology skills as well. With only limited options, many firms are leaning into technology to get their work done more quickly and with better accuracy in order to provide clients with better-quality work overall. At the heart of the efficiency drive, tax firms must incorporate automation into almost all aspects of the way in which they work.

For tax firms to meet this challenge, firm leaders need to understand and determine what a proper technology stack should look like in order to meet firm needs. Indeed, a tax & accounting firm鈥檚 should be designed with its current and short-term business strategy in mind, as well as an understanding of the firm鈥檚 requirements. For example, tax firm leaders survey for the Tax Professional Report listed among their top investment priorities such items as tools to improve workflow processes, new tax technology solutions, and practice management tools.

For tax firms that are strategically contemplating and planning for their tech stack, the following factors should be explored: systems that integrate, advanced data analytics, artificial intelligence (AI), and the strategic use of cloud infrastructure.

3 technologies for consideration for the ultimate stack

1. Advanced data analytics and AI

The use of AI in tax technology isn鈥檛 new (and although new is a relative term, in the world of technology, is considered outdated.) In fact, use of tax technology dates back at least a couple of decades with machines assisting with simple tasks such as performing tax calculations and conducting some basic research. Over the years, some tax & accounting firms have slowly migrated to using tax technology for more complex work, including utilizing advanced data analytics and AI to provide more insightful, proactive, and personalized services.

For example, with the growing uncertainties of tax policies and regulations, tax firms may use software that employs . By analyzing trends gathered from historical data, firms can predict future patterns for their clients, such as potential compliance risks or financial opportunities. The use of AI and especially generative AI (GenAI) will continue to become a more important feature of tax technology.

Indeed, some firms may choose to work with AI and GenAI to research tax-related regulations and questions; others may choose to explore the use of to better assist with automation of routine tasks. Machine learning has the potential to automate the classification and extraction of data from unstructured sources such as invoices, receipts, and contracts.

Another AI-powered tool that can assist with automation is , which can be trained to automatically read, understand, and interpret client emails and other communications while extracting relevant information for filing purposes and automatically routing queries to the appropriate department or response templates.

2. Blockchain for security and compliance

One element of any tech stack has to include considerations for security and compliance, especially as all tax firms鈥� work involves their clients鈥� personal information. Although not new, blockchain technology can help firms handle data integrity and security, through features such as:

• • • Smart contracts 鈥� Traditionally utilized by the legal industry, can be programmed to execute tax payments when certain conditions are met, reducing delays and ensuring compliance.
    • Data integrity 鈥� Blockchain鈥檚 immutable ledger means once data is entered, it cannot be easily altered. This is crucial for audit trails and compliance, and provides transparent and secure record.

3. Integrated cloud infrastructure

Finally, integral to any technology stack an integrated cloud infrastructure that allows firms to streamline their operations because most of their data can be managed in a centralized way. Such technology allows for seamless integration of various tax software and applications, enhancing workflow efficiency and reducing errors by ensuring consistent data use across platforms.

The cloud infrastructure provides robust data security and compliance with tax regulations, which is critical for handling sensitive financial information. Additionally, it can offer scalability to handle peak times, such as tax season, without the need for heavy IT investments. Remote accessibility enables professionals to work flexibly from any location, which itself improves productivity and client responsiveness. Overall, an integrated cloud infrastructure supports more efficient, secure, and adaptable tax services.

The findings from the Tax Professional Report highlight a significant trend toward prioritizing efficiency within tax firms. This shift is largely underway and is being driven by the ongoing challenge of a shortage of qualified candidates, which has underscored the importance of integrating advanced technologies into everyday practices.

To address these challenges, many tax & accounting firms are developing a comprehensive technology stack that includes advanced data analytics, artificial intelligence, blockchain for enhanced security and compliance, and integrated cloud infrastructure. By doing so, these firms can not only improve their workflow and process efficiency but also enhance the quality of the service they provide to clients.

Further, this strategic adoption of technology will not only help in managing current firm limitations but also position these firms for future growth and adaptability in an increasingly digital and complex regulatory environment. As tax technology continues to evolve, firms that proactively invest in these technologies are more likely to thrive, ensuring client satisfaction and operational excellence going forward.

You can download a full copy of the 成人VR视频 Institute鈥檚 recent 2024 State of the Tax Professional Report here.

In fact, results from the newly released 2024 State of Tax Professionals Report, from the 成人VR视频 Institute, suggest that this year is shaping up to be a re-building year for many accounting firms. The annual report is derived from more than 500 surveys of tax professionals from accounting firms around the world, including the United States, Canada, the United Kingdom, Australia, and Latin America. Every year, the survey asks respondents about their top strategic priorities, their biggest challenges, and what their firms are doing to achieve the goals they have set for the year.

And according to the results, 2024 could be a year in which firms reassess their business models and take decisive action to make themselves even more resilient and competitive. As those tax professionals surveyed for the report say, many accounting firms are still grappling with the implications of technology and a persistent talent and skills gap, but they are also learning to adapt to the evolving business landscape while taking advantage of new business opportunities.

Impressively, some of these efforts are paying off. A majority of respondents in the survey said their accounting firms reported a 24% increase in revenue over the past 12 months, and many were expecting that their revenues will continue to rise at a rate of more than 20% over the next 12 to 24 months as well 鈥� a welcome note of sunny optimism for an industry that has seemingly dealt with more than a few black clouds in recent years.

Top strategic priorities for 2024

According to this year鈥檚 report, the top priorities for accounting firms in 2024 are:

• • • Driving efficiency
    • Retaining and hiring quality talent
    • Exploring new pricing models
    • Improving client services
    • Growing strategically

These priorities are similar to those cited in the past, although the order tends to shift from year to year. For example, the search for talent was listed as the fourth priority in the last report, but jumped to second this year, suggesting that the talent squeeze from senior-level retirements and an anemic pipeline of new blood entering the accounting field is an issue that accounting firms are still grappling with.

To address this and the many other challenges tax professionals face, accounting firms are reportedly employing a number of strategies, including greater use of automation and continued expansion of service offerings, especially in the areas of tax strategy and business consulting.

For the first time ever, however, one of the top priorities mentioned by tax professionals around the world is an eagerness to explore alternative pricing strategies in addition to simply billing by the hour.

Embracing technological innovation

The use of more advanced technology, including artificial intelligence (AI), is still very much a topic of conversation for accounting professionals. However, according to the report, technological innovation is a double-edged sword for accounting firms 鈥� a force that is not only displacing tax preparation as a core function but also providing the means for greater efficiency, higher profit margins, and the ability to provide a wider range of specialized tax services.

On balance, however, new tax technologies have proven to be beneficial for the tax & accounting profession overall. Indeed, most firms in the midsize- and large-firm categories are continuing to embrace automation as an efficiency driver, with almost half of respondents (47%) saying they are interested in leveraging new technology solutions.

There is also keen interest in 鈥� and some skepticism of 鈥� the possible applications of generative AI (GenAI) in accounting. Not many accounting firms use GenAI at the moment, but more than one-third (35%) of survey respondents said their firms will be investing in some form of GenAI or new AI-powered technology over the next two years 鈥� a significant increase from past years.

You can download a full copy of the 成人VR视频 Institute鈥檚 鈥�2024 State of Tax Professionals Report” by filling out the form below:

The challenges range from ensuring that tax professionals get all of their clients鈥� tax related information in a timely manner to making sure they have what they need to perform their work.

What some firms did to help with busy season

Tax work has become more complex for a host of reasons, from increased regulations and changes in tax laws and policy to more demanding. For some tax & accounting firms, trying to counteract these and other challenges by adopting various strategies is an everyday struggle.

Indeed, professionals from most tax & accounting firms indicated adopting more advanced technology would play a crucial role in helping drive efficiency and streamline processes in their workday, according to the 成人VR视频 Institute鈥檚 2023 State of the Tax Professional Report. Automation and software solutions can significantly reduce manual tasks, allowing professionals to focus on more complex aspects of their work, which is a huge boon for tax & accounting firms.

In general, most US businesses outsource some part of their overall operations, and according to, 57% of them said doing so allowed them to focus more on core business, improve service quality, and solve capacity issues. For tax & accounting firms, outsourcing has become a viable option for handling routine tasks, thus freeing up staff.

When considering outsourcing or right sizing the workforce, tax & accounting firms need first to consider their own staff鈥檚 collective skills. By reviewing which tasks are matched with which internal professionals, firms can assess the appropriateness of skill levels and decide whether additional training or education is needed or whether it is more appropriate cases to try to increase the skill-levels of certain employees or consider reassigning them to other tasks. Firms that are able to get these questions correct not only increase their efficiency but possibly generate more staff satisfaction.

Tips & tricks for surviving the busy tax season

Whether a tax & accounting firm has incorporated the above suggestions or not, or whether it is full steam ahead in trying to improve efficiency or streamlining work processes, there is still a level of businesses that all the technology in world will not be able to fix. As tax & accounting professionals rally through the busy tax season, we offer a few suggestions that will hopefully be a salve, a quick respite as the light at the end of the tunnel gets brighter. These simple and fun suggestions are a way to acknowledge firm members鈥� efforts and offer a gracious thank you for the work they do.

• • • Making simple gestures like impromptu ice-cream social or pizza parties not only boost morale but also reinforce the team’s cohesion. Understanding that time is a precious commodity, a 30-minute ice-cream social in the afternoon or a one-hour pizza party at which everyone gathers and does not talk about work, will be a welcome respite.
    • Regularly checking in with staff to ask about their well-being can make a significant difference in morale. Importantly, reminding everyone that they鈥檙e all almost over the surge in work that comes this time of year helps maintain perspective and motivation.
    • Encouraging staff members (and management) to get some exercise 鈥� there are plenty of studies that show the positive effects of a physical workout. Note: a workout can be as simple as walk (preferable outside), and studies also show the benefits on sunlight on physical and mental health. Yoga and breathing exercises are also helpful.
    • Promoting laughter 鈥� work is serious, however finding some humor each day can be a significant stress reliever.

Preparing for success: Looking ahead to 2025

Looking ahead, tax & accounting firms can take several steps to ensure they are better prepared for future busy seasons. For example, firm leaders should take time to perform a retrospection on the current year鈥檚 tax season. Reviewing and identifying what practices worked and what could be improved is essential, and this includes analyzing client feedback, staff input, and workflow efficiencies.

Anticipating regulatory changes is another important step in preparing for the next busy tax season. With tax regulations constantly evolving, firms that stay ahead of these changes can better serve their clients and reduce last-minute scrambles. The Tax Cuts and Jobs Act provisions that are expiring soon is one such area requiring attention.

Further, increasing automation and improving efficiencies should remain perennial priorities for firms. In fact, many tax & accounting firm professionals continued to list improving efficiency as a strategic priority, according to the Tax Professionals Report, which also showed that organizing clients by complexity and establishing advance deadlines for preparation can streamline workflows and reduce stress.

As tax & accounting firm leaders navigate the complexities of the busy season, the blend of technological innovation, strategic outsourcing, talent optimization, and a focus on staff well-being forms a comprehensive approach to overcoming challenges. By looking ahead and preparing strategically, firms can not only survive their busy season, but thrive during these demanding periods, setting a foundation for continued success and client satisfaction.

Add to this the tight labor market, it is no wonder tax & accounting professional leaders are making achieving greater efficiency their top priority in the coming year, according to the 成人VR视频 Institute鈥檚 recent .

Not surprisingly, technology plays a significant role in developing greater efficiency in the workplace. In fact, the report revealed that about one-third of respondents said their firms (independent of firm size) have automated up to one-quarter of their tax processes, and another 23% of respondents said their firms have automated up to half of their tax workflows. However, Canada (29%) and the United States (18%) reported the most tax professionals that said their firms have not automated any portion of their tax processes.

There are numerous tools and technologies that can reduce the number of steps a tax professional has to perform. To capitalize on these features, however, requires an investment in time to learn about them, to train on how to use them, and to redesign workflows to maximize the impact. Successful tech adoption also requires strong leadership to hold the team accountable for implementing the change.

Of course, not every person is as receptive to new technology, or change in general. Tax & accounting leaders cannot hold back improvements to accommodate for those who are the least receptive to change within the organization. The need to increase capacity for production is too great, and filling that need solely with additional talent is not a viable option.

The report also revealed that tax & accounting leaders鈥� top two investment priorities are prioritizing improving processes and workflows (with 69% of respondents citing this) and using more functionality of existing systems (67%) 鈥� two initiatives that fit hand-in-hand.

Therefore, to best implement and utilize additional technology, leaders have to acknowledge that firms鈥� work processes would have to change as well. Here are some steps that leaders can take to drive this kind of change:

Foster an atmosphere of improvement

Tax & accounting firm leaders will make greater strides in these initiatives by empowering a wider group of participants across the firm to look for areas of improvement. The professionals who daily perform various tasks will have unique insights and perspectives into how their processes can be made more efficient.

Curiosity should be encouraged and incentivized, even (or especially) if this means long-standing processes will be questioned. Of course, this may put some team members on the defensive as they may have created the current methods; but leaders should remind the team that technology changes quickly and the firm would seek to continually improve.

To ensure that each technology and process is being optimized, assign a champion, whose role would be to stay on top of update release notes, training, and is the point-person in the organization for any questions about that specific technology or process. These individuals would be the ones responsible for proactively communicating with the rest of the team about changes and updates.

Implement new features

Naturally, not every feature that鈥檚 released will be applicable to every firm. Variabilities in services offered, niches served, and size of the team also will impact the application. Firms should be sure to do a test run of applicable features with a subset of the team.

Also, team leaders should incorporate those individuals that are most enthusiastic about technology and at least one person that tends to be more resistant to the subset group. The tech enthusiasts can be the ones that perform the test run and dig into the tool to learn how to set it up. The person who is more resistant will offer invaluable input on the questions that may arise from other team members and how legacy processes will be impacted by this change. The collaboration will undoubtably create a more fool-proof rollout.

And, of course, any rollout plan should be carefully designed. Teams should identify how all affected parties will be trained 鈥� and they shouldn鈥檛 forget about training clients on aspects of the technology with which clients may interact. Leaders also should develop a timeline, asking key questions such as, 鈥淚s this a feature that can be rollout all at once? Or does it need to be done in phases to ensure there is capacity to train everyone on how to use the new feature?鈥�

They should also develop a Frequently Asked Questions (FAQ) document 鈥� a living document that evolves overtime 鈥� that users will be able to reference for further details.

Communication also is key for a successful implementation. Any efficiency gained only happens if everyone involved uses the new feature or process; therefore, accountability is a must. Set expectations as to by when everyone should be using the new feature and processes. Add an agenda item to team meetings to discuss feedback and questions. And leaders should follow up with the team to confirm adherence to the new procedures 鈥� and never forget that as leaders themselves, they need to lead by example by learning the new technology, where applicable.

Finally, as tax & accounting leaders focus on innovative ways to use technology, they have to be careful to not take on too much at once. As ideas are generated, have a committee meet to discuss interdependencies that may exist with the proposed changes and prioritize the ones that will have the greatest impact on efficiency gains.

Perhaps we are seeing a reaction to the potential for economic recession, or these respondents are looking for alternative solutions to solve the capacity challenge they have been facing. In either case, midsize firms ranked efficiency as their top strategic priority with more than one-third (36%) of such respondents ranking it number 1, a 15 percentage-point increase over the 2022 survey.

And its鈥檚 not as though tax & accounting firm leaders haven鈥檛 begun to automate. One-third (33%) of all respondents 鈥渁utomate up to 25% of their tax workflow鈥� and another 23% automate between 26% and 50% of their tax workflow, according to the report. Leaders of these firms clearly see the potential for getting more efficiency from their existing systems and processes. In fact, when asked to rank their investment priorities for the next two years, more than two-thirds (69%) of all respondents cited improving their current workflows and processes near or at the top of their list.

To achieve new levels of efficiency leaders will need to innovate and execute well-planned projects. Yet, as the report notes, 鈥渕ore than half of firms at all levels said they did not have a designated person whose role was to drive efficiency.鈥� Minus this leadership, unfortunately, most initiatives will fail.

Employ project management principles to discover efficiencies

There are planning methods that enable firms to accomplish strategic initiatives like this amid all their client work. They can leverage project management techniques to help them become more efficient. Some immediate steps they can take include:

Assign a leader 鈥� Given the need to drive this change, firm leadership should look to appoint someone to wrangle these initiatives. That person does not need to be on the leadership team. In fact, tax & accounting firms across the country are beginning to incorporate project management principles, and in some cases credentialed project managers, to keep their projects on track. Some are identifying team members who have strong communication, organization, and people skills and who can quite effectively manage the process and the people needed to make a project successful.

Define the vision 鈥� Any effectively run project begins with a vision. To set up a team and task them with finding efficiency in the tax workflow is quite ambiguous; and the team leader, or sponsor of the project, will need to collaborate with the project lead to define the actual vision. While they are not defining the solution 鈥� that is what the project team will discover 鈥� they are defining the desired end-result, so the project team can recognize it when they achieve it. For example, one stated end-result could be 鈥渢he project creates enough efficiency that the firm can offer advisory services to clients without having to add talent.鈥�

Document the requirements 鈥� A step that should not be skipped before diving into exploring efficiency options is . This takes place at the beginning of the project when the timeline and budget for the project are agreed upon. The objectives for the vision should be documented, including what resources will be required (both in personnel and technology). These details are the framework for defining the scope of the project. Poor requirement gathering is responsible for up to 40% of project failure, according to the Project Management Institute鈥檚 .

Be agile 鈥� When running a project, there are multiple project management methods from which to choose. Traditional methods do all the planning up front, and then execute each stage of the project in succession. Depending on the project鈥檚 length, the environment, needs, and technology could change during the course of the project. Today, more organizations are looking for agility in their project methods. The Agile method incorporates shorter sprints of progress in which feedback is collected earlier to ensure the objectives are being met and the desired result will be delivered. As tax & accounting firms strive for greater efficiency, they should test more frequently and elicit feedback throughout the process 鈥� in this way, firms can incorporate software enhancements as they are released and better leverage their staff鈥檚 knowledge and skills.

Prepare to go-live 鈥� Once the efficiency gains have been discovered the project is still not complete. The project leader will need to coordinate the go-live (or roll out) of the new procedures. This phase of the project will include slightly modified communication and training plans from the initial project charter as they will focus on people outside of the project team. When planning for go-live, make sure to think through the change management plan to help those professionals that may be newer to the vision to acclimate quickly. Though the benefits of greater efficiency should be incentive enough to change, most people are hesitant to change their daily routines. That鈥檚 what makes the so crucial to the project鈥檚 ultimate success.

As tax & accounting firm leaders drive for greater efficiency faster, they should incorporate the principles that project managers use and begin to share the workload for managing projects with others who have complementary skills. Successfully achieving efficiency gains will also support the achievement of their next most critical priorities 鈥� client service and growth 鈥� so the quicker firms address their efficiency question, the better.

Growth, however, may mean different things to different firms; and some tax & accounting firms may decide that they need an infusion of private equity money to reach the level of sustainability and operations success their leaders envision.

But how can you tell is your firm is ready for just a big financial step? Below are five key items that should be strongly considered when a firm is thinking about getting a private equity investment and whether such an investment is best for the firm.

Some tax professionals have strong feelings about getting private equity investments and believe the tax firms鈥� business model integrity may be at stake. Like all decisions that can impact the business, private equity infusions could dramatically alter how the firm has operated, including its basic structure. Therefore, much thought must be given to how the business raises cash and what impact that financial decision may have on the business.

Private equity 鈥� the investment of an amount of capital into a private company or firm 鈥� is how private equity firms deploy their capital on behalf of their partners. Leveraging a private equity investment to expand operations or purchase needed technology can be a viable strategy for tax & accounting firms looking to grow their business. Often, the capital that private equity firms provide to companies or firms can help those businesses expand and increase their value over time.

Before a tax & accounting firm leaders decide to partner with a private equity firm, it’s essential they weigh these pros and cons carefully and vet potential partners thoroughly.

Overall, a tax & accounting firm has many advantages in partnering with a private equity firm. It is a straightforward way to access capital, especially if acquiring financing in more traditional ways, such as through a bank, may be challenging. Private equity investments also allow firms to gain expertise in operationalizing the business, since often private equity partners will join the firm or its board and offer their significant expertise. In addition, working with a private equity firm can give tax & accounting firms access to business strategies and efficiencies, especially if the private equity firm can leverage its expertise and reputation to attract additional clients for the tax & accounting firm.

Below are five considerations where it may be most beneficial for a tax & accounting firm to seek out private equity investment into its business:

1. 1. 1. Financial distress 鈥� While a definition may not be necessary, a firm in financial distress may be facing significant financial challenges that are affecting its ability to operate effectively. These difficulties may derive from an economic impact, such as an increase in overhead costs; not charging clients market rates; holding large amounts of account receivables that aren’t closing; loss of clients or employees; and an inability to get enough work done to bill clients. Firms that continuously experience financial distress can be faced with bankruptcy or the dissolution of the business. Working with a private equity firm can provide the capital needed to weather economic difficulties and reposition the company for future growth.
      2. Growth through expansion 鈥� For tax & accounting firms looking to expand into new geographical regions or additional service areas, significant capital may be required. In addition to expanding independently, a more expeditious way to grow is through a merger with another firm or by acquiring another firm. Either strategy requires some capital, and receiving a private equity investment may be the best way to go.
      3. The need for modernization 鈥� There isn’t any question about whether tax & accounting firms need to be modernized. The changes, including the digitalization of taxation, require firms to ramp up their technology solutions to not only keep up with the competition, but also to be able to serve their clients in the most effective and efficient way possible. Such modernization often requires a significant capital infusion, which can be provided by private equity.
      4. Firm legacy and succession planning 鈥� For firms that may not have obvious heirs or succession plans and that wish to continue their business may consider selling their practice to a private equity firm. This can provide a profitable exit strategy for the firm owners and other partners.
      5. Scaling and leveraging industry expertise 鈥� For those tax & accounting firms that are considering the addition of a specific industry to their practice offerings and may not have the expertise in that area, finding private equity professionals that can provide that expertise could give the firm both the knowledge and strategic guidance to achieve needed operational improvements.

Before deciding whether to get involved with private equity firms, tax & accounting firms should contemplate all angles. For example, the tax & accounting firm leaders should understand that they might have to give up control. Quite often, any private equity firm that invests will require a say in the business it runs. Depending on how much capital is invested into the firm, the private equity firm may have a more significant voice in the strategic direction of the business. Indeed, tax & accounting firm owners should work with attorneys or financial advisors to smooth out any changes to the firm’s ownership structure.

It鈥檚 also crucial for tax & accounting firm leaders to remember that a private equity firm’s objectives are often to maximize its investment within a specific timeframe, typically five to seven years. So, their strategic decisions will be made with a timeline of how to increase profits within the short-term, even if it comes at the expense of long-term profitability. Naturally, this may create tension with the firm鈥檚 previous leaders, who may be worried about firm sustainability in the long run. Further, if the tax & accounting firm cannot perform up to the private equity firm’s expectations, there might be issues in repaying the debt to the private equity firm.

So, before a tax & accounting firm leaders decide to partner with a private equity firm, it’s essential they weigh these pros and cons carefully and vet potential partners thoroughly. The goal should be to find a private equity firm that provides capital and aligns with the tax & accounting firm’s strategic vision and company culture.

For some firms, it is part of their growth strategy, but for others it is a way revamp and reinvent their businesses. Not surprisingly, growth remained a top priority for most tax firms, according to the recently released 2023 State of the Tax Professional Report. Yet regardless of the reason, many tax & accounting firm leaders are wondering how best to move that strategy forward. And, for those firms that have yet to move forward because they were unsure how to make it happen, they have to think about how they will begin.

What is 鈥渟calability鈥� for tax & accounting firms?

Nearly all tax & accounting firms need to look at how they can become scalable, says , Senior Business Advisory Consultant for Tax & Accounting Professional Services at 成人VR视频. is simply 鈥渁n organization鈥檚 ability to grow without being hampered by its structure or available resources when faced with increased production.鈥� In short 鈥� 鈥渋ncrease revenue faster than cost,鈥� explains Arbas, adding that for accounting firms it is merely about growth because for them, growth equals adding resources at the same rate as adding revenue.

Indeed, the difference between professional services firms and a business in which a physical product is produced and sold, is that the business understands and can more easily scale up the production of the product in order to have more products to sell, and therefore potentially increase sales and profits. Conversely, for professional services firms 鈥� and especially for small and solo tax firms 鈥� their product is, for example, the number of tax returns that can completed by the number of individuals who are required to get those done.

When a firm then looks to add services or even increase the number of tax returns it鈥檚 going to do, it will also have to look at what resources are needed to accomplish the desired increase.

Considerations before scaling

Interestingly, 聽launched in the past 10 years have successfully scaled their operations, according to a McKinsey & Co. There are many reasons why this number so low, but for professional services firms to have a better chance at success, there are a few factors , such as:

Setting goals 鈥� When setting goals to grow the business it is important to create a two-pronged approach and consider both the long-term and short-term goals. For the short-term growth goals, it is necessary to use a laser-like focus to make sure plans and executions are not too aggressive, too quickly which could be disastrous. If for example, the goal is to increase revenue by a certain dollar amount, first look at where that growth may come from among current clients or with current operations. Is it necessary to add new or additional services at this point?

Planning and trying to anticipate the most minute considerations that are required to launch and create additional services can be difficult. And not honestly and properly assessing where the company is currently can lead to significant consequences.

Evaluating resources 鈥� Author John Steinbeck said 鈥溾�o find where you are going, you must know where you are.鈥� And while Steinbeck was not speaking to tax firm leaders, this wisdom can be an important takeaway when they think about growing their tax & accounting businesses. To make sure that they scale in the right way, firms must assess what they currently have in terms of staff and technology.

For staff, taking an in-depth look at what each person does and how they contribute to the business is critical. Reviewing if those employees are being maximized in their current role and exploring whether their work can be automated or outsourced to free them up for new projects and opportunities can be an important benefit. Next, it would be crucial to evaluate if employees currently possess (or can be trained in) the skills needed to make those new business offerings possible.

Finally, leaders should do the same with all of their businesses鈥� technologies, including determining how these technologies are being used and if they are being maximized to their greatest potential. From here, they could then determine what, if any, new technology would be needed in order to scale up their businesses.

Identifying efficiencies 鈥� Leaders should also review current work process in order to understand what parts of the business operations are efficient and where improvements many need to be enacted. For leaders, this will be one of the cornerstones of successfully being able to scale their business. The more that can be done more efficiently through the work processes already in place within the business, the better position that business will be in to take on or create opportunities for growth.

For tax and accounting firm leaders who are focused on growth, their first consideration should be determining what type of service they want to deliver and to whom do they want to deliver it?

In order to help identify the services that would be the best fit, tax & accounting firm leaders can first look at 鈥渨hat services can be added that don鈥檛 require a lot of resources to deliver,鈥� Arbas says, adding that leaders should remember that scalability within professional services equals product delivered with the time put in. 鈥淔irm leaders should view any opportunity through the lens of what benefits their firms and also their clients.鈥�