Accounting firms’ top four priorities now

According to Thomson Reuters Institute’s State of the Tax Professionals Report, accounting firms rank efficiency as the most critical priority this year, followed by client service, growth and talent.

Priority 1: Efficiency

Efficiency has taken out the top spot as the key priority for accounting firms in 2023, up from third in 2022 as labour shortages and increased operational costs squeeze capacity and margins.

Automating time-consuming and manual tasks, such as completing accounts payable/receivable, financial reporting and tax compliance, can be an effective way of boosting efficiency.

The vast majority of firms, 86%, have incorporated some level of automation into their tax workflows.

While small firms do lag behind both medium and large firms in automation, they are not too far off the average – eight in 10 have introduced automation to some of their tax workflows.

Improving existing workflow systems and processes, as opposed to investing in new technology, was identified as a key area of focus by 69% of accounting firms.

Improving the use of existing technologies could be achieved through providing training opportunities and appointing a leader to identify roadblocks that may be impeding technology tool adoption.

Priority 2: Client services

Client services has moved up the ranks from fourth priority in 2022 to second priority in 2023.

An increasing number of businesses are turning to their accountants for business advice on top of accounting services.

An overwhelming 93% of respondents said their clients want some form of advisory services.

Large firms are well ahead of midsize and smaller firms in offering more advanced advisory services, such as financial planning, business consulting, auditing and decision support.

Priority 3: Growth

Growth remains a top priority for 2023. Although it dropped one spot in the order of priorities, the difference between 2022 and 2023 is statistically insignificant, according to Thomson Reuters.

Where differences do exist, however, is in how small and midsize firms work towards growth compared to their larger counterparts.

Sixty-six per cent of small firms are intent on growing their client base. This is also a priority for 61% of midsize firms, but for only 48% of large firms.

Forty-eight per cent of large firms are focusing on gaining more work from existing clients to grow their business, whereas only 35% of midsize firms and 33% of small firms are adopting this tactic.

Priority 4: Talent

Sourcing talent has taken a plunge from top priority in 2022 to fourth in 2023. While 30% of firms indicated it was a top concern in 2022, this dropped to 21% this year – back down to pre-COVID levels.

This isn’t to say companies aren’t concerned about talent. Recruiting, training and retaining the right talent, and finding ways to overcome skills shortages, remain an area of focus.

Small firms are most likely to experience difficulty recruiting junior and mid-level tax professionals, as well as data scientists/financial analysts. Large firms have the greatest difficulty recruiting good senior talent, including senior tax professionals.

In terms of solutions:

• 41% of companies had considered increasing technology use and automation to address the talent shortage.
• Small firms were more likely to provide training and development opportunities to boost retention – upskilling employees in new areas to fill skills gaps while creating a strong employee value proposition.
• Flexible work arrangements and attractive benefits are likely to appeal to most candidates whether they’re applying for work at a small, medium or large firm.