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Is your firm driving change or bringing up the rear?

Rapid regulatory change, evolving customer needs, and tight competition for talent is forcing tax and accounting firms to rethink their technology and software tools.  

Is your tax and accounting firm keeping up with the rapid pace of change or falling behind?  

90% of accountants now feel there is a cultural shift in accountancy leaning toward technological adoption. 

There have been over 78 FASB rule updates in the last five years alone – and these updates show no signs of slowing. Industry experts predict a decrease in revenue in coming years due to process automation. And many firms are currently experiencing a turnover rate of 20% or higher.  

As firms struggle to keep up with customer expectations and market realities, the costs of hesitation begin to multiply exponentially. 

  • Clients demand both new kinds of expertise and old standards of traditional customer service 
  • A new generation of digitally native tax and audit professionals are demanding better tools and opportunities 

Merely embracing change won’t be enough. The future belongs to leaders willing to invest in it. Given the overwhelming complexity of today’s tax environment, the need for comprehensive tax technology is essential. The right tax technology can propel your firm to the next level of cost reduction, risk mitigation, automation, transparency, and overall operational efficiency. 

Consider this: The Practice of Now 2020 Report by Sage.com uncovered that “accounting firms are turning to cutting-edge technology to provide deeper insights and minimize the time required for repetitive tasks.” And also, that “Non-early adopters are less likely to experience the benefits of current technology investment, indicating a potential divide between early and late adopters.” 

4 Tips to Close The Technology Gap 

Would you classify your firm as an early adopter, or technology laggard? If you want to lead the pack and not get left behind, these tips can get you started. 

Consider creating the role of technology advocate 

The one of the ways in which firms are attempting to solve their technology problems is by creating a new role that combines tax and accounting expertise with technology skills: technology advocate. 

The role of technology advocate is increasingly important, and firms need to decide whether to teach technology to their CPAs or hire a technologist who then can be taught tax and accounting.  

Most firms favored re-skilling a tax and accounting expert in the art and science of data analytics, artificial intelligence, and other technologies; others favored training technology experts in the rigors of tax and accounting. Other firm leaders said they favored bringing in pure technologists to sit with the firm and focus on developing overall technological expertise. 

Whichever approach your firm deploys, the evolution of the role of technology advocate may be the game-changer that firms need. 

Gather support  

If your firm is serious about investing in tax technology, you’ll need to gather support. Take the time to understand what’s relevant to each person, both from an individual and firm perspective. 

Here are a few questions to consider: 

Firm Perspective 

  • How will tax technology mitigate risk for the firm? 
  • How will tax technology save the firm money? 
  • How will the investment aid in the firm’s growth? 
  • Why is a tax technology so important to the firm? 

When framing the conversation with partners, drive home the point that tax technology delivers value by enabling tax pros to focus on strategic work that provides greater value to the firm.  

IT Perspective 

  • How does tax technology integrate within the firm’s existing systems? 
  • What is the role of IT in the implementation of tax technology? 
  • What is the role of IT in the maintenance of the technology platform? 

When framing the conversation with your IT department, focus on the fact that your technology provider will handle the majority of the implementation, maintenance, and updates pf the platform, freeing IT to dedicate time and resources toward maintaining tax data and responding to audits and errors at the transaction level.  

Legal Perspective 

  • What are the terms and conditions of the Master Services Agreement (MSA) contract with the technology provider? 
  • What clauses are outlined in the MSA? 
  • How is the firm protected if something goes wrong? 
  • Does the firm have an MSA with your vendor currently? 

When working with Legal, be prepared for technical questions and connect your team to your technology provider as needed to iron out any legal concerns.  

Understand the financial aspects of the change you’re driving 

When positioning your change, remember to come at it from the angles that matter to your stakeholders. If your proposed change will affect compensation, for example, with efficiency improvements affecting billable hours, or reducing overtime, you’re likely to encounter fierce, unconscious resistance to your project. When it comes to execution, understanding and addressing the financial concerns at play is key to success. 

 Choose a technology partner you trust 

Select a technology partner to act as a trusted advisor for your firm and to help implement your long-term vision for change. The wrong tech vendor can be disastrous, so answer these important questions before making your selection. 

  • Does this vendor have experience in your industry? 
  • How are the vendor’s communication practices? If you can’t say “Great!” – move on. 
  • Does this vendor have a top tier support team? 
  • Is the vendor commitment to transparency? 
  • Does this vendor have satisfied current customers? 

Conclusion 

Firms are navigating interconnected obstacles, with cutting edge technology offering both solutions and potential pitfalls. Fortunately, by working with an experienced and trusted technology partner like Thomson Reuters, firms can solve current problems while better positioning themselves to meet the future.