Efficiency unleashed: The future-proof accounting firm

Prepare for tomorrow with tax automation

Integrating automation into tax workflows is essential for maintaining efficiency, staying competitive, and delivering value-added services. Traditional manual tax preparation is becoming increasingly outdated as firms face rising challenges in staffing and client expectations.

However, successful automation requires more than just implementing new software. It also involves rethinking internal processes, reassigning tasks that do not require specialized knowledge, and strategically utilizing outsourcing to handle routine work. Firms that effectively blend process improvement with automation can reduce inefficiencies and create capacity for growth to serve existing clients better and take on new ones without sacrificing quality or efficiency.

This report explores the future of tax automation — addressing process inefficiencies, maximizing the potential of automation systems, and leveraging outsourcing — and offers insights into how your firm can overcome barriers and embrace this new era of tax preparation.

How modern firms are transforming

A traditional CPA firm has a rigid hierarchy where junior staff, or "doers," manage much of the manual labor. New hires and interns start on tasks like data entry, document organization, and low-level tax preparation and gradually move up the ranks as they gain experience.

This model relies heavily on lower-level staff to complete repetitive, time-consuming tasks while senior staff focus on higher-value advisory and strategy work. However, this structure is becoming obsolete as firms face increasing staffing challenges.

According to the AICPA’s Private Company Practice Section (PCPS) CPA Firm Top Issues Survey, finding and retaining qualified staff is the most pressing concern for firms of all sizes except sole practitioners. To adapt, modern firms must shift away from the outdated pyramid structure, embracing automation and outsourcing to replace manual, repetitive tasks that once occupied the bulk of junior employees' time. 

Automation takes on the labor-intensive work of collecting, sorting, and entering client data, allowing you to drastically reduce the need for manual data entry and basic administrative tasks. By outsourcing, your firm can delegate work to domestic or overseas teams rather than relying solely on internal staff, allowing you to operate efficiently without compromising quality. With automation and outsourcing handling the day-to-day minutiae, your team members can concentrate on more strategic tasks that add greater value to clients, such as tax planning, advisory services, and consulting.

As a result of this shift, the role of a staff accountant is evolving. Instead of spending years on lower-level work, new hires are trained to think critically and strategically and build relationships with clients from day one.

This transition isn’t just about operational efficiency — it’s also about attracting and retaining talent. Younger generations entering the workforce are less interested in spending their early years handling rote, repetitive tasks. They are attracted to roles where they can immediately contribute to strategic decision-making and client interactions. Firms that embrace automation and outsourcing have an easier time attracting talent because they offer roles that provide growth, engagement, and meaningful work from the start.

Recognizing process inefficiencies and their symptoms

Many firms struggle with process inefficiencies that hinder their ability to utilize technology to deliver timely, high-quality services. These inefficiencies manifest in several ways, and recognizing the symptoms is the first step toward resolving them and ensuring smoother, more effective operations:

• Delays receiving complete client data. Firms frequently wait on clients to provide the necessary documents, which trickle in piecemeal over time. This method disrupts workflows, resulting in idle time or needing to revisit the same return multiple times as new information comes in. Tax engagements are slow without the right tools to prompt clients and track their submissions, particularly during peak season.
• Inconsistent processes across teams and offices. Firms often develop procedures over time, which vary from one location or department to another. Inconsistent practices can lead to variations in quality, longer completion times, and a lack of standardization that hampers scalability. When staff in different offices — or even within the same office — handle the same task multiple ways, it leads to duplication of effort, miscommunication, and errors. These inefficiencies could cost your firm valuable time and damage client relationships due to unpredictable turnaround times.
• Excessive time spent on low-value tasks. Data entry, manual document sorting, and back-and-forth communication with clients require significant human involvement but contribute little to the firm’s overall service quality. As firms face increasing client expectations for more advisory and strategic services, spending too much time on these repetitive tasks diverts resources from higher-value work and hampers profitability.

To address these inefficiencies, firms must focus on managing what they often refer to as the “front door” — the intake of client data. Effectively managing the front door sets the tone for the entire tax preparation process. When the firm receives client information quickly and completely, it can begin work immediately, avoiding delays caused by incomplete submissions. On the other hand, an inefficient intake process creates bottlenecks that slow down the entire workflow.

Building accountability through technology

As firms increasingly rely on automation to streamline their workflows, technology helps ensure each step in the process is traceable and accountable.

Accountability in tax preparation processes has long been challenging, especially with multiple stakeholders and complex workflows. Tasks often shift between departments and team members with little oversight, causing delays, missed deadlines, and incomplete documentation. Inconsistent, manual processes only compound these issues, making it difficult to enforce accountability or track where delays originated.

Technology addresses this issue by enhancing transparency. Workflow management solutions offer a clear, step-by-step view of where a task is in the process, who is responsible for completing it, and whether any actions are pending. By giving firms and clients visibility into the progress of returns, it’s easier to hold team members and clients accountable.

For example, your firm can track a client's completion of document requests made through portals like TaxCaddy. If clients are missing documents, automatic reminders go out, and you can track the progress in real time.

Adopting Lean Six Sigma for process improvement

As CPA firms face mounting pressure to deliver more with less, adopting a proven process improvement framework like Lean Six Sigma drives efficiency and helps maintain high-quality standards. By combining Lean's focus on eliminating waste with Six Sigma's emphasis on reducing variation and enhancing quality, your firm can optimize tax processes and deliver faster, more accurate results.

Here are some examples of how top firms apply Lean Six Sigma:

• Reduce cycle time. A common issue in tax preparation is the time it takes to complete a return due to delays in receiving client data or inefficiencies in the review process. By applying Lean principles, firms can map their existing workflows, identify bottlenecks, and eliminate unnecessary steps.
• Minimize errors and rework. Errors require rework, which consumes valuable time and resources. Six Sigma’s focus on quality ensures firms catch mistakes before they escalate into larger issues. Implementing standardized procedures for reviewing client data and using automation to handle repetitive tasks will lead to fewer revisions, faster turnaround times, and greater client satisfaction.
• Standardize processes across the firm. In many firms, different teams or offices may use various approaches to tax preparation, leading to inconsistencies in quality and efficiency. Lean Six Sigma encourages firms to develop standardized processes that everyone follows, reducing variation and ensuring consistent service across the organization.
• Improve client collaboration. Waiting for client data to arrive is a major roadblock to efficiency. Using Lean principles to streamline the client intake process and Six Sigma to ensure data is complete and accurate, firms can improve client collaboration.

The benefits of reducing inefficiencies through Lean Six Sigma extend beyond just improving the speed and quality of tax return preparation. It also helps your firm build greater trust with clients so they’re more likely to seek additional services and recommend your firm to others — creating a positive feedback loop where increased efficiency and quality lead to more satisfied clients, which drives growth.

The role of change management in adopting automation

One obstacle to adopting technology is resistance to change, often rooted in personal preferences or comfort with traditional methods. People have established ways of working and may be reluctant to change, especially if they believe their current workflows are effective. For example, some may prefer paper-based processes or maintaining direct client relationships without portals or automated reminders. Here are some practical strategies to overcome common challenges during periods of change:

• Focus on mindsets. Overcoming resistance requires a shift in mindset, focusing on the benefits of technology for both the client and the firm. By emphasizing how technology improves efficiency, reduces errors, and enhances the client experience, firms can encourage staff to adopt new tools.
• Set the tone for change. Firm leaders must set the tone for change from the top. When leadership demonstrates a commitment to automation and emphasizes its importance to the firm’s future success, staff follow suit. Leaders should communicate regularly about the benefits of automation, acknowledge the challenges of adjusting to new systems, and provide clear support and resources to ease the transition.
• Identify change agents and champions. Change agents are enthusiastic about innovation and understand the long-term benefits of automation. They are willing to embrace new tools and help others adapt to them. Internal champions communicate the message of why change is vital throughout the firm. These individuals provide hands-on support to colleagues who are struggling to adapt, offering guidance, training, and encouragement as needed. They can also act as intermediaries between staff and leadership, providing valuable feedback about what’s working and where further adjustments might be necessary.
• Celebrate small wins. Additionally, it is essential to demonstrate early automation successes. Firms can start by automating specific processes or introducing automation tools in phases, allowing staff to see the tangible benefits. Resistance fades as staff begin to see how automation improves their work and reduces inefficiencies.
• Sustain change through continuous improvement. Automation isn’t a one-time event but an ongoing process requiring continuous improvement. Maintain momentum and keep the focus on optimizing processes by regularly reviewing how you’re using automation tools, identifying areas for further efficiency gains, and adjusting strategies to meet new challenges.

Practical ways to adopt automation

As CPA firms face increasing pressure to deliver faster, more accurate services, automation improves efficiency and supports scaling operations. The key to this transformation is strategically adopting technology to automate routine tasks. This approach allows your firm to shift from manual preparation to a review-based approach, where technology handles the heavy lifting of data processing, and your staff can focus on ensuring accuracy and adding strategic insights.

Tools from Thomson Reuters, such as SurePrep and TaxCaddy, put the days of labor-intensive tax preparation behind us. These platforms handle the bulk of the work involved in gathering, organizing, and inputting data into tax returns, reducing the time required to complete these tasks and minimizing the risk of human error.

A powerful tool that automates much of the tax preparation process, SurePrep uses optical character recognition (OCR) technology to extract data from client documents. This data is then automatically populated into the tax return, reducing the need for manual data entry. With SurePrep, your firm can process tax returns more efficiently so staff can move directly into reviewing the information for accuracy and completeness. The automation speeds up the process and reduces errors, leading to higher-quality output and better compliance.

A digital platform for clients to upload necessary tax documents, TaxCaddy simplifies the client intake process. The user-friendly platform makes it easy for clients to provide information without the back-and-forth that slows down the process. Once clients upload documents to TaxCaddy, they can be seamlessly transferred to SurePrep for processing, creating a smooth, end-to-end workflow that reduces delays.

By centralizing tasks in a single platform, UltraTax CS streamlines tax compliance. It reduces manual work and enhances accuracy with batch processing, advanced calculations, and automatic regulatory updates. Integrating seamlessly with other CS Professional Suite tools, it enables smooth data flow and faster processing, allowing your team to focus on quality reviews and efficient service delivery.

Together, these tools create a fully automated, streamlined process that cuts down on the time it takes to prepare tax returns. Instead of spending hours sorting through client documents and manually entering data, your staff can review the automatically prepared returns and identify areas that require further attention.

Position your firm for success

Throughout this report, we’ve highlighted the primary benefits of automating tax processes:

1. Overcome inefficiencies by managing the “front door” of client data intake and standardizing workflows to minimize errors and delays.
2. Maximize automation to shift staff roles from data entry and manual preparation to review and strategic analysis, ultimately improving the quality of client services.
3. Future-proof your firm by continuously refining processes, staying updated on technological advancements, and integrating Lean Six Sigma methodologies to boost efficiency and quality.

The firms that succeed in the future of tax will proactively adopt automation, leverage technology to its fullest, and continuously seek to improve their processes. These strategies position them to offer more value-added services, attract and retain top talent, and exceed client expectations.

The path forward is clear: adopt automation, streamline processes, and elevate the role of your staff from doers to strategic advisors.