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Evolving with confidence

How can tax and accounting professionals find, set, and keep their modernization pace?

The formula for change: motion + confidence

Change is never easy. Making trade-offs in the service of progress requires facing the unknown. It means dreaming and believing those possibilities are attainable.

By trade, tax and accounting professionals can be risk averse. It’s in their DNA. However, they must find a way to change and grow. Evolution won’t wait forever. The future arrives on its own schedule—but it’s definitely coming.

And that means the time for firms to shift is now. They must:

  • Adapt to deliver the kinds of new services clients value
  • Shift to build a future-ready workplace that attracts and retains key talent
  • Accelerate IT investments to make a meaningful difference in their work

But at what speed?

Chapter One

Evolution vs. confidence

Moving from the present to the future is rarely easy: no straight lines, no templates, no easy answers. It requires sensing, learning, and adapting. This is evolution.  

But if firms can commit to achieving foundational agility, the right toolset, and a big-picture perspective, they can move into the unknown with less fear. This is confidence.

Tax and accounting professionals are uniquely qualified to thrive in uncertainty. They live to extract clarity from chaos, turning the right information into the next opportunity. So what stands in the way?

Chapter Two

The trouble with transformation

Moving from the present to the future is rarely easy: no straight lines, no templates, no easy answers. It requires sensing, learning, and adapting. This is evolution.

But if firms can commit to achieving foundational agility, the right toolset, and a big-picture perspective, they can move into the unknown with less fear. This is confidence.

Tax and accounting professionals are uniquely qualified to thrive in uncertainty. They live to extract clarity from chaos, turning the right information into the next opportunity. So what stands in the way? 

Chapter Three

What stands in the way?

Some tax and accounting firms are struggling to adapt. They know they need to. Competition demands it. Their customers expect it—so do potential employees. When asked what their biggest obstacles were, they gave us five [1].

  1. Workload compression

    Uneven workloads stress everything about a firm, from its people to its processes. This is especially true for firms specializing in compliance. Tax season is a brutal sprint; the rest of the year is notably easier.

    This puts a premium on headcount during peak need times, forcing firms to outsource, which reduces margins. It also presents a less-than-desirable work-life balance for younger tax and accounting professionals who want meaningful work while still leaving the office at a reasonable hour.
  2. Technology adoption

    The ability to meaningfully integrate technology has been a long-standing challenge, creating a huge disparity between firms. Some are eager early adopters, some need to be dragged reluctantly into the future. Most are somewhere in the middle, even as we see solid proof that technology makes a substantial difference in growth—businesses that utilize cloud-based accounting have a 15% year-over-year growth in revenue. [2]

    Electronic filing requirements and basic productivity tools have given most firms an uneven technology foundation. Real modernization demands building layers on top of this foundation. New tools, new sources of information, new ways to securely collaborate—technology is the key to all of them.

    Technology is both an obstacle and an enabler. It’s both a problem to be solved, but also a path to the workforces—and workplaces—of the future.
  3. Client retention

    Firms must find a balance between adding clients too fast, where quality might suffer, and failing to bring in a fresh stream of new revenue. As market and rule changes shape the pipeline, firms need to solve the talent and tool gaps that prevent them from building new business.
  4. Workforce recruitment

    This means recruiting and retaining differently. The next generation of tax and accounting professionals have markedly different ideas about work-life balance. This is the key to more effective employees as well as healthier bottom lines due to lower turnover. A Stanford study estimates a 13% increase in performance from flexible workplace arrangement. [3]

    They also want work that’s more meaningful and multidimensional. The time is now for firms to take advantage of technology to meet these expectations and opportunities.
  5. Cybersecurity

    This one is obvious. As threats escalate and evolve, modernization can increase information security exposure. This is where a firm’s natural risk aversion can be a benefit, as clients trust them with sensitive business and financial data.

Chapter Four

Complexity

So why is modernization so hard?

It’s partially complexity

The five challenges outlined are exactly an interconnected puzzle, knotted in ways that make it impossible to solve one without solving them all.

  • Workload compression can only be solved with both workflow automation technology and offering new services that normalize demand across the year.
  • Client retention drives the revenue necessary to invest in new tools and services, but those both require investing in new technology and talent to deliver.
  • And, of course, it all needs to be secured.  Better-trained people, modernized services, and an organizational shift focused on taking security seriously.

Chapter Five

Technology

At the center of the knot: technology

Technology is a standalone challenge and fundamental to getting everything else right. But it’s not just a question of buying products and services.

  • Successful modernization requires reshaping processes and retraining people around new tools and ideas.
  • It also means rethinking how information flows—and is secured—across the firm.
  • Finally, it means thinking critically about data. Technology enables firms to collect more of it, but firms still need to decide how to turn that information into an advantage for themselves and their clients.

Is it budget?

While tax and accounting firms struggle with technology, they often view peers working in large tax and accounting departments with envy. But even here the struggle to become adaptive via technology is tough.  When asked, these firms rate their technology progress as very mixed. [4]

  • Chaotic 25% 
  • Reactive 33% 
  • Proactive 28% 
  • Optimized 4%
  • Predictive 6%

This means barely 40% of these firms are headed in the right direction . And, even worse, barely 30% of these firms even have good ways to measure the success of technology investments. So even if they’re headed in the right direction, they don’t know it.

And if the big, well-funded, well-staffed departments aren’t getting it right, it’s no surprise that other firms are struggling as well. With an overwhelming number of solution paths available, finding one that meets their own transformation pace is critical.

This means barely 40% of these firms are headed in the right direction [5]. And, even worse, barely 30% of these firms even have good ways to measure the success of technology investments. So even if they’re headed in the right direction, they don’t know it.

And if the big, well-funded, well-staffed departments aren’t getting it right, it’s no surprise that other firms are struggling as well. With an overwhelming number of solution paths available, finding one that meets their own transformation pace is critical.

Chapter Six

Conclusion

Become the firm you were destined to be

Moving forward with confidence isn’t just about solving today’s challenges. It’s also about being able to embrace whatever comes next. And Thomson Reuters can help you make it happen.

Your partner in modernization: Thomson Reuters

Thomson Reuters is committed to helping you set a transformation pace that lets your firm evolve with confidence.

Expert to expert

We’ve weathered the ups and downs of transformation. Our answers can make your journey easier.

  • Over 100 years of experience
  • Over 6,000 tax and accounting professionals in 30 offices on six continents
  • 87% of Fortune 500 companies license at least one Thomson Reuters product

Integrated and complete

We match a big-picture vision with precise-solution answers, to give you a solid foundation for transformation.

  • Complete solutions that mix technology, market and regulatory data, and training content
  • CPA Practice Advisor gave UltraTax CS a perfect 5-star rating in 2019
  • Thomson Reuters Checkpoint Edge won the 2019 Tax & Accounting Technology Innovation Award

Invested in tomorrow

Like you, we’re forever preparing for what comes next.  We are dedicated to leading out front while working with you side by side.

  • The Thomson Reuters Labs™ around the world collaborate locally to solve problems that matter through rapid prototyping, validating new ideas using data science and novel ways to visualize information.
  • Checkpoint Edge, the next-generation Thomson Reuters Checkpoint research and guidance tool, leverages advanced AI and ML and is trusted by 200,000 users who rely on the expert editorial analysis from over 180 countries
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