White paper

Digital technology and its importance for CPA firms

Your staff and clients expect digital experiences to simply work and increase access to accounts. Are you meeting those expectations? 

Tax and accounting professionals can be risk-averse and detail-oriented. They take a conservative, measured approach to analyzing facts and figures, leaving no stone unturned and always proceeding with caution. This approach is why they’re successful in their business.

But this same cautious approach has caused the accounting profession to fall behind other industries in adopting the digital technologies that can help CPAs evolve their business. Because of this, firms are missing opportunities to create efficiencies and better serve clients. They are also facing barriers to attracting and retaining key talent because up-and-coming CPA professionals expect the conveniences of technology in their job.

As a result, now more than ever, tax and accounting firms must create a digital technology roadmap that will allow them to meet the expectations of their clients and employees and adapt to a service-oriented business model. This model would enable firms to keep pace with more stringent government reporting requirements, stay a step ahead of the competition, and grow in today’s marketplace.

“We should embrace the technology that will help do our data-entry roles so we can focus our time on higher-level work,” states CPA Steven Kurinsky in the Journal of Accountancy.[1] “A bot could replace our need to act as bookkeepers, but our clients will continue to seek our advice for business strategy, tax strategy, and business operations.”

This white paper looks at the digital technology expectations CPA professionals and clients have, how meeting those expectations can help firms evolve and retain top talent, the risks to watch out for when considering deploying new technology, and how to start your transition into a firm that focuses on growth and new revenue streams.

Today’s employees expect technology in the workplace

Digital technology in a modernized, automated workplace can be a powerful point of differentiation for firms. Employees have become used to technology’s conveniences in their daily lives, and they expect to use modern tools to perform their work duties, collaborate with others, conduct research, and complete administrative tools. They expect a world beyond Excel spreadsheets.

CPAs, especially those new to the profession, want to engage in more meaningful work rather than manual tasks like inputting data in multiple worksheets or retrieving data for analysis.

Today’s employees want to be able to:

  • Work remotely—and recent events like COVID-19 have demonstrated the importance of this flexibility. Working remotely can take the sting out of the long hours required, especially seasonally, to move their career forward, creating the work-life balance that is important to today’s professionals.
  • Work across devices and connections. Staff expect to stay connected when they’re not in the office. This might mean completing work at their kitchen table or sending an important message from the gym.
  • Have digital paths to research that bring the same simplicity of search engines like Google to complex tax and accounting issues.
  • Use tools that are intuitive. While they don’t have to match consumer apps' sleekness and simplicity, the look, feel, and flow must be modern.
  • Do all of this while their client data remains secure.

When accounting firms can’t supply these modern conveniences, they run into problems with efficiencies and attracting and retaining key talent, who will likely look for employment with firms that can offer these technological advantages. This can cause staffing problems: The U.S. Bureau for Labor Statistics reported CPA unemployment was 1.6% in January 2020, meaning there is a shrinking pool of available talent. At the same time, 35% of workers say they would pass on a job if the “culture” isn’t a good fit.

If firms can create the right culture by providing the technology today’s tax and accounting professionals want, they can gain an advantage in attracting and retaining talent in this tight recruiting market.

Today’s consumers expect the conveniences of technology

Google and Amazon, among others, have changed consumer expectations. CPA clients are losing patience with entering the same information multiple times, downloading applications, and navigating complexity.

Now they expect instant access to their data and the accompanying analysis. They expect simple, easy-to-use online engagement. They expect to transact business, such as submitting information, completing forms, and signing documents, on digital platforms. They expect intuitive and secure digital experiences.

When a firm can’t meet these expectations, it risks losing clients to a competitor that can. 

The business benefits of digital technology

By simplifying workflows and efficiencies, technology can solve the problem of talent shortage and overwhelming workload. It can put information and documents at everybody’s fingertips, so staff spend less time searching for data among different devices and connections and more time working. Embedded calculations mean CPA professionals spend less time pausing to do important math. With automation, a CPA only has to enter data once, and that information automatically updates throughout all relevant documents.

In fact, 56% of accountants find that technology increases their productivity,[1] freeing them up to spend more time looking for the big-picture answers—meaning they’re focusing on more strategic work.

But the benefits of technology don’t end with efficiency.

  • Digital technology can centralize the flow of documents and information to streamline collaboration without the need to email information back and forth manually. Employees can manage version control automatically, so everybody’s working on the same page—literally and figuratively.
  • Technology improves continuity and security by automatically saving and storing work product. Saving to the cloud, for instance, means information is stored in real-time, remaining safe if work is disrupted, a laptop goes missing, or the power goes out. In the long term, a cloud-driven approach to information storage can protect the firm from disaster and allow near-instant recovery should one occur.
  • Embedded calculations and automation increase CPA accuracy.
  • By delivering better experiences, technology can reduce user frustration.
  • Artificial intelligence (AI) can provide insights that help employees and clients spot patterns and predict trends.
  • Technology can have larger firm benefits, as well. AI, for example, can provide insights into how a firm can succeed and grow.

Trending technologies for CPAs

While CPA firms may be adopting technology at a slower rate, we’re seeing signs that some are looking to make the move.

Many of these are considering or implementing web-native technologies such as cloud computing and web-based accounting and workflow programs. These technologies enable the open and connected environment that employees and clients expect. According to Dialog’s Radical Clarity survey, cloud adoption is by far the area of most interest among CPA firms.4

Firms are also looking to automated bookkeeping programs that use machine learning to connect data systems and processes. These connections allow automated data ingestion from across accounting systems into a tax or audit program for analysis.

Some firms are investing in AI to differentiate themselves through more in-depth business intelligence for themselves and their clients.

Larger firms have expressed interest in:

  • Combining AI with data analytics for business advantage
  • Deploying customer relationship management (CRM) solutions to market to existing clients and attract new business

Large firms tend to use a diverse set of software solutions that stretch across practices, and they need to integrate and connect those solutions to create a robust and seamless user experience across the different tools.

Smaller and mid-size firms, meanwhile, are looking for a holistic experience from their technologies—solutions that are inherently interconnected and often from the same vendor.

These firms are rethinking how they function as a firm and how to build an improved client experience, so they are looking for:

  • A solution that can help them prepare tax returns quickly and efficiently and get those files to their clients
  • Technologies that make it easier for clients to do business with them

All of these technologies require the deployment of application programming interfaces (APIs), which enable different products or software systems to connect data and processes. APIs are the glue that keeps all these digital technologies working together.

Although a different pace than other industries, CPA firms are adopting more technologies—and evolving their business as a result. We know this because firms are adding more non-CPA roles to their staff, and many of these are technology-focused roles. Firms are also starting to prioritize accountants who know data science and analytics rather than those who only know core accounting.

Reasons firms are purchasing tax, accounting, and auditing software:

  • Increasing functionality
  • Replacing a dated system
  • Improving usability
  • Consolidating multiple systems
  • Improving product support
  • Reducing cost
  • Improving reporting

Potential risks to consider

Because tax and accounting professionals are risk-averse, they are typically skeptical about new tools. Firms investing in technology to modernize and maximize values must consider risks.

These risks include:

  1. Security vulnerability. Compromised endpoints can open the door for hacking (data surreptitiously taken for misuse) and ransomware (deletion of important files if the ransom isn’t paid).
  2. Underuse of the technology. Underutilization occurs when firms buy technology they don’t fully use. This commonly happens when firms aren’t properly trained on the solution’s possibilities. A culture of technology-aversion can also lead firms to resist transformation and therefore to not use the new technology. Or the solution may not be right-sized for the firm’s needs. 
  3. The tax-preparation process is a great example of underutilization. Government requirements on e-filing have forced firms to adapt. However, in the process of doing so, many firms invest in platforms that offer additional features and functions they don’t use. The result is a mismatch between investment and results.
  4. Complexity. This is often connected to underutilization. Some employees may find new solutions to be confusing or complex to use, so they resist using the technology. As a result, only some processes or teams may adopt technology, while others won’t, and parallel paths and methods for accomplishing the same task are created within the firm.

In these cases, the big picture technology gains mentioned earlier can be completely erased.

Starting down your path to modernization

Once a firm has embraced the idea of digital transformation, what’s next? Surprisingly, the transformation doesn’t start with the solutions—it begins with people and processes.

Shifting to a new technology requires a firm to look internally at how it does things and reimagine business model processes to fit the new technologies. When deploying technology, firms shouldn’t be afraid to change the way they work.

Firms of all sizes should also initially focus on their clients and their staff. Are employees currently doing work that has value to clients, or is it just busywork? Are employees fulfilled in their work? Are they happy with their work-life balance? Can clients easily access their account data on their own? Are they getting value from your services?

Once these questions have been answered, firms should start plotting their roadmap to align new services and technology solutions. Start simple by asking:

  • How do you move from basic modernization to advanced technology?
  • How do you ensure employee learning and development includes technology?
  • How do you keep pace with competitors?
  • How can technology help to evolve your employee culture continuously?
  • Where are you on that continuum, and what are the next steps you need to take to get to the next level?

With these considerations in mind, and with the help of a forward-looking technology partner, firms will be able to find the best solutions to begin their transformation into a firm of the future.

General features firms should look for in a solution:

  • Simple to install and easy to learn
  • Must be able to scale quickly
  • Should leverage collaborative, cloud-driven efficiency


Tax and accounting firms must create a technology roadmap to meet the expectations of their clients and staff and adapt to a service-oriented business model to survive and grow in today’s market.

Some firms—including your competitors—are starting to do that, but the results of their efforts have been mixed. Many digital technology providers have rushed to be first to market, and the results have been solutions that don’t deliver the promised benefits or are challenging to use.

That’s why a technology partner with a proven track record of expertise is important. The key to a successful implementation is finding a partner who understands the firm’s needs and thinks about the firm’s holistic strategy and approach to business and processes.