White paper

Tax season report card: How did your firm score this season?

Another tax season has come to a close. While you have a little time to catch your breath, now is the time to reflect and evaluate the areas where your firm performed well and where there might be room for improvement. How did your firm score on its tax season report card? That is the question firms should consider as they work to ensure greater success in the future.

It is no secret that the profession has historically been known for long hours and heavy workloads, especially during tax season. Today, given the shifts in client expectations, ever-changing tax laws, and staffing hurdles, the challenges facing tax and accounting firms have become increasingly complex.

Optimizing your firm’s strategy now positions you nicely for better productivity during the coming tax season and beyond. More specifically, this means taking a closer look at how your firm scored in the key areas of talent, growth and efficiency, and client service.

To help firms ensure they are ideally structured to compete better, and, ultimately, increase profitability, this white paper explores how firms can better retain talent, improve growth and efficiency, and better serve their clients.

Attract and retain talent

How has your firm done with talent over the past year and handled the “Great Resignation?”

Attracting and retaining top talent is not a new concern for the tax and accounting profession. However, the pandemic further fueled the threat and changed the way employees can and — perhaps more importantly — want to work. The battle for talent continues to be very real and firms must be open to finding new ways to win it.

In order to remain competitive, firms must embrace fresh approaches and new flexibilities such as remote or hybrid work capabilities.

“At the start of the pandemic, we saw a lot of firms that were not set up for remote work and were really scrambling. And these firms, many of them were horrified at the idea of their employees working remotely. But, if you fast forward two years, these same firms are now embracing remote work and finding better talent by being open to it,” Nadine Weiskopf, Senior Product Marketing Manager, Inbound at Thomson Reuters, explained during the recent Thomson Reuters webcast titled, “Tax Season Report Card: How Did Your Firm Score This Season?”

In fact, according to the Thomson Reuters Institute 2021 Insights for Tax Professionals Report, 89% of tax professionals said they could identify lasting positive impacts as a result of the pandemic and, of those, 26% cited remote working now being an accepted practice.

In addition, of those tax professionals who have been working remotely most of the time, nearly half (48%) said remote work has had a positive impact on their well-being. And 38% said their working practices have improved, according to the report.

At the core of these findings is employee engagement, which is foundational to improving the well-being and resilience of any workforce. A recent Gallup survey found that employees who work exclusively remote or hybrid tend to have higher levels of engagement (37% engaged in both groups) than those who work exclusively on site (29%).

The Gallup survey outlines some steps firms can take to drive greater employee engagement, including:

  • Embracing flexible work environments while developing plans for the future of work
  • Using their organizational culture and values to guide business decisions
  • Focusing on employee well-being and considering the demands of life both inside and out of the workplace

Commenting on Gallup’s findings, SurePrep's Vice President of Marketing Greg Pope said during the Tax Season Report Card webcast, “[Gallup] noted that engagement is higher for organizations that focus on culture and well-being. And maybe that's what is contributing to the higher engagement. When I think of well-being, I think of a flexible work arrangement. There's less wasted time. So, it shouldn't be a surprise that people actually are more productive and more engaged. But for firms that haven't maybe embraced that, they're probably at a recruiting disadvantage to firms that are allowing people to continue to work remotely.”

The importance of current accounting technology in the talent battle

Firms looking to remain a competitive talent magnet must also invest in the latest technologies to help tax professionals work smarter and faster. This means leveraging tools that improve automation and enhance workflow efficiencies. Simplifying workflows and eliminating data entry and other manual tasks gives tax preparers more time to spend with clients and the ability to focus on more meaningful and satisfying work.

Having the right tools and technologies in place is becoming increasingly essential for firms looking to attract and retain the right talent, especially when you consider the new CPA licensure model that will become effective in 2024.

A new Core Plus Discipline model was developed by the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA). As noted in a blog post published by the Pennsylvania Institute of Certified Public Accountants (PICPA), candidates will still have to demonstrate core skills in accounting, audit, and tax, but technology will have a greater emphasis and will be embedded into each of the exams.

In that post, Jonathan Zigman, a CPA and Senior Content Developer at test prep company UWorld Roger CPA Review, wrote, “When I was a CPA candidate fresh out of college, studying for the CPA Exam helped prepare me for many of the challenges I would encounter as an emerging accounting professional. The ability to process an influx of new information to make quick, informed decisions, for example, were critical skills needed on the exam and in public accounting.

“However, studying for the CPA Exam did not prepare me for the types of technology I would encounter once I started at the firm…for this reason, I believe the CPA Exam’s enhanced focus on technology will be beneficial for the profession.”

The reality is that younger, tech-savvy professionals will not only desire but expect firms to have the latest technologies in place.

As Weiskopf explains, “New CPAs are going to have to have a technology acumen. And if they have that technology acumen, they're going to expect the firms that they work at to have the technology to support it, because these are going to be technologically advanced CPAs who expect their firms to offer them solutions so that they're not manually doing things they already know they can do quickly with technology instead.”

Growth and efficiency

The way in which tax firms grow is changing. Fueled by increased staffing constraints, compressed tax seasons, and greater client expectations, today’s firms must rethink how to develop their practices and better serve clients.

How does your tax practice score? Is your firm still struggling to streamline time-consuming, repetitive tasks and complicated tax workflows? If so, it’s time to rethink your operational efficiencies.

Consider this: data from the Tax Professionals 2022 Report from Thomson Reuters Institute found that improving efficiency remains a top priority for most firms and 21% of firms rated efficiency as their top concern.

There are several ways in which firms can improve efficiency, including making investments in the latest technology. The research noted that, according to firms, the most preferred routes to greater efficiencies include:

  • Improve process/workflows
  • Invest in new tax technology
  • Improve staff training
  • Make better use of functionality
  • Invest in new practice management tools

Take, for example, scan and populate software. Not a new technology, but perhaps an under-utilized one.

Said Pope, “We have seen that, in the small segment, firms that have one to nine employees, only 35% of them are using a scan and populate solution. So, there's a lot of room for improvement in the small segment. In the medium and large segment, the percentage is higher. About 55% are using scan and populate, but still a lot of room for growth.”

As it relates to technology, firms have an opportunity to further improve efficiencies by automating workflows with cloud-based tools and APIs, which let one application access and use the features or data of another. Digitizing the tax process not only increases efficiencies and reduces the risk of errors, it also provides greater data integrity and security. Some features to consider when evaluating tax software include:

  • Reduces duplicate data entry through automatic linking between business entities and personal tax returns, using data-sharing capabilities.
  • Saves time preparing a tax return by pulling in previous year data and using diagnostics to link directly to the input field.
  • Emails a list of missing data to clients with the click of a button.
  • Automatically creates allocation worksheets, making it easier to prepare multi-state returns.
  • Features pre-submission dynamic diagnostics making it easy to spot errors, and ensuring complex returns are accurate before filing.
  • Enables users to view all relevant information on multiple monitors simultaneously, including input, forms, prior year input, and diagnostics.
  • Includes e-signature and e-filing capabilities.

Outsourcing can also be an attractive way to drive growth and efficiency for some firms. Underscoring this point, a recent Business 2 Community blog post states that about 6.2% of accounting firms used offshore staffing before the pandemic. Today, that number has grown to 41.3%.

Said Pope, “I think more and more firms are open to that these days. And obviously, outsourcing is not an all-or-nothing thing. Maybe the firm just wants to add 100 new clients and they want to outsource those 100 new returns, but they are still going to prepare the existing client returns like they always have.”

Client service

How did your firm score in providing client service? This is important for firms to consider as, too often, the failure to at least meet client expectations has hurt key relationships. It can lead to misunderstandings, dissatisfied clients, missed opportunities, and the potential loss of a client’s business.

Consider this: HubSpot’s Annual State of Service in 2022 report found that 88% of customer service professionals surveyed believe customers have higher expectations than in previous years. And in today’s connected society, 85% of those surveyed agree that customers are more likely than ever to share positive or negative experiences with others.

That’s why it is essential for firms to take a hard look at their client service models to ensure they are providing clients the services they actually want — and not just the services you think they want.

When evaluating your client services, questions to ask yourself include:

  • Am I seeking out client feedback?
  • Am I allowing clients to rate my firm?
  • Am I being collaborative?
  • Am I uncovering potential opportunities for additional services?
  • Is it time to fire a client?

Client feedback

Better serving your clients begins with gaining a clear understanding of things you are doing well and areas where there might be room for improvement.

“Find out what they care about, what their needs are, where they are happy, and where they have needs that aren't being met…the question is, what problems are not being solved? Because from there, you will start to learn what needs you can meet and how you can shift your own practice,” Weiskopf said.

She noted that this could also help firms better identify growth opportunities and ways to profitably serve clients year-round, which can further ease the stress of tax season.

Pope agreed, saying, “I'm a huge fan of using methodical survey techniques. Because if you're not asking your clients, “How are we doing? What else do you need from us?” there's no way to know. So, I think it's really important for firms to survey clients on a regular basis — at least once a year, maybe every six months.

“I think this is especially important for firms that are thinking about a digital transformation. Maybe it's the firm that is sending out the paper organizer today and using somewhat outdated practices that's thinking about these new technologies. Send a survey to your clients, create a baseline for them, and then draw some insights from the data you get from them. Then act on those insights..”

Take, for example, the client satisfaction survey presented by accounting firm Faller, Kincheloe & Co., in Des Moines, Iowa. Questions in the online survey include:

  • Could you suggest any ways in which we can improve our service to you?
  • To what extent have we helped you in the past year?
  • Where do you want to be this time next year?
  • What more can we do to help you in the next year?

There’s also the customer satisfaction survey presented by Medford, New Jersey-based accounting firm Padden Cooper. Questions in this online survey include:

  • Were you aware of all [our] available services?
  • Are there any services you would like to see available?
  • Are you satisfied with your relationship with the firm?
  • Do you feel comfortable recommending our services?
  • What do you like most about our firm?
  • What do you like least about our firm?
  • How can we improve?

There are several tools — which, in some cases, are free — that firms can use to survey clients. A few examples include SurveyMonkey and Delighted, which can be used to send Net Promoter Score (NPS) surveys to track and analyze feedback.

Pope explained that NPS surveys are “a really great way to measure the general relationship satisfaction that your clients are feeling or perhaps not feeling. And it's a really simple, widely used, and understood metric with benchmarks. You give them a zero to 10 scale and you ask how likely would you be to recommend us to a friend or colleague, and then the system does a calculation and tells you what your Net Promoter Score is.”


Is your firm making it easy for clients and staff to effectively collaborate?

The reality is that many of today’s clients have grown accustomed to the accessibility and conveniences of the Internet and mobile applications — such as mobile banking, online shopping, and online bill pay — and they want the same experience from your firm.

Underscoring this point, a Bill.com survey of millennial-led business owners found they prefer a digital and cloud-based accounting experience. More than half (56%) said they want their accounting firm to work with cloud-based accounting technologies, 33% prefer digital payments, and 25% use their mobile devices for accounting.

Leveraging digital tools, such as mobile apps, client portals and e-signatures, to strengthen collaboration not only makes for more satisfied clients but also a happier staff. It’s a win-win for firms, especially among those looking for ways to better attract and retain top talent.

“When you give clients tools that make it easier for them to electronically deliver those documents to you, you'll get them earlier in the tax season. And that has a really positive impact on workload compression. It really does,” Pope said.

Said Weiskopf, “That's true. We saw a lot of that with people who are just moving to using things like portals and putting more pressure on their own clients to use portals. They're seeing the benefits of that. It's amazing the joy that it can bring to someone to see that they're not struggling to collect data from their clients.

“It makes life tremendously easier. And it's becoming a necessity because you just can't keep doing things the traditional way and keep up. If you want to grow, you have to change.”

Is it time to fire a client?

Serving those clients who are the right fit for your tax practice will go a long way in helping your firm drive greater growth and profitability. In some cases, this may even mean firing some current clients to become stronger.

Think of it this way: the time and energy a firm spends dealing with less-than-ideal clients is time that can be spent bringing in new, more profitable clients. This will also mean less stress for the staff.

“We see a lot of firms grading clients these days. Maybe you have your A, B, and C clients. And the C clients are the ones that are probably taking up most of your time,” said Pope. “People are probably familiar with the Pareto Principle — it's those 20% of clients that are requiring 80% of your time. And they don't generate enough revenue to warrant the amount of time, not to mention the frustration that they can cause.”

Added Weiskopf, “There's so much work out there and there's so much demand that, if they're also coming off as detractors, they're not helping your business. So, you can focus on that as a way to clean up your client base, have a positive client base, get other positive clients, and keep your own staff a lot happier.”

To help firms find clients that are the ideal fit, Rob Nixon, the creator of coaching program Profitable Partners, outlined criteria for an “A-grade” accounting client. According to a blog post written by Nixon, these include:

  • They are ambitious business owners who are hungry for success.
  • Chances are high for a stable, long-term relationship. Consider prioritizing stable, existing businesses over start-ups.
  • Aim for an 80% gross profit minimum in your services. Consider losing clients who fall below that minimum.
  • You enjoy working with that client.
  • The client adheres to your firm’s workflow, they pay you on time, and do other things that ensure your business runs smoothly.

“Finding the right clients can do wonders for your profitability, more so than having any number of the wrong clients. There’s no need to accept work that you don’t want to do. This can make you offer sub-par services, which isn’t good for your reputation. In the long run, this might do much more harm than good,” Nixon wrote.


The latest tax season has come to a close and now is the time to reflect. Taking a closer look at how your firm scored in talent, growth and efficiency, and client service will better position your tax practice for future success and, ultimately, greater profitability. The time to act is now.

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