Whether it’s cloud-based solutions or predictive analytics, technology is helping firms today enhance their performance outcomes in five key ways: Agility, efficiency, growth, profitability and transformation. In Wolters Kluwer’s 2019 survey of tax and accounting professionals, we found that technology has helped firms the most within the areas of profitability and efficiency, but it is making a difference for a number of metrics across all five areas. Here’s how.
Agile firms are able to recognize and seize new opportunities in a changing landscape. Because client expectations are constantly evolving, firms can leverage technology to meet those ever-changing needs. That might mean, for example, using predictive analytics to be more proactive and consultative, or leveraging technology to improve client response time. In our survey, 82% of respondents felt technology helped reduce average client response time.
Metrics to measure: Average client response time, ability to identify problems (client-staff), RFP win percentage.
Efficiency is the ability to accomplish more with existing staff. When firms work smarter not harder, they give employees more time to focus on innovation and client communication—not on mundane tasks. Technology solutions that allow firms to automate tasks mean less time spent per return and fewer extensions filed as a result.
Metrics to measure: Reduction in hours worked per return, reduction in hours worked per client, time spent on core business (versus administrative), reduction in number of extensions files.
Growth can be measured in several ways. These include more new clients, more services per client, and the addition of new service offerings. Of those firms realizing stronger growth outcomes due to technology, 83% felt technology was helping them add new clients. And 68% felt technology was helping them grow the number of services per client. Technology also can help with firm growth by freeing up staff time for better client engagement, which increases your value and positions your firm to offer higher-end consultative services.
Metrics to measure: Add new clients, increase in the number of services per client, add new services.
To be profitable, a firm has to not only keep its existing clients, but also to earn more from each one by either raising prices, increasing chargeable hours, or increasing realization per client. In other words, technology that makes firms more efficient and agile helps sustain and grow the business over time.
Metrics to measure: Retain more clients, % realization per client, improvements in chargeable hours per client.
Change is a constant in accounting. The ability to adapt and prepare for the future is an essential component of success. Skillsets are changing and staff now require client communication skills as well as the ability to understand and leverage new technology.
Metrics to measure: Employee skillsets, utilization of solutions implemented, staff engagement/morale.
Data analytics and financial visualization tools set your firm up to provide proactive rather than reactive services. In addition, cloud solutions allow more flexible, remote working opportunities, which leads to improved recruiting efforts and more satisfied employees.
Learn much more about how the way firms are leveraging technology is changing the future of accounting. Downloading the white paper: “The Future of Accounting.”