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Tax & AccountingFebruary 21, 2023

How small firms can be more competitive by adopting a larger firm mindset

Not all small firms are looking to become larger firms, but they do sometimes compete for clients. However, small firms have a lot to offer clients. These firms can embrace the personalized service that makes them stand out while elevating their service offerings by becoming more efficient.

Increase capacity without increasing staff

The biggest difference between a small firm and a larger firm is the number of people working there. In general, more people can complete more work, but a lack of staff doesn’t have to be an obstacle for smaller firms. Small firms can make up for their lack of staff through automation and efficiency.

Firms can automate the data collection process by batch printing organizers that are pre-populated with last year’s return information. They can offer electronic tools that make it easier for clients to provide their information digitally or even connect directly to data sources.

The data entry process can be automated with optical character recognition software that recognizes the data in a document and flows it automatically to the correct spot in the return. Lastly, eSignatures greatly reduce the amount of time spent at the end of the tax workflow so firms can make time for more clients.

Take on more complex (and profitable) work

Small firms don’t have to be stuck doing basic returns. More complex returns tend to be more profitable, and small firms may limit themselves if they turn away this type of business. Complex returns can be made simpler with comprehensive tax software. A comprehensive tax preparation solution will include the latest tax forms and legislative changes.

For sophisticated 1040 returns, for example, automatically importing K-1 data from related 1120S or 1065 returns can save a lot of time. For business returns, linking trial balance data from engagement software, as well as bringing in data from the accounting software via a Microsoft Excel import, can be great time savers.

Firms should look for software that serves their specific niche clients, like oil and gas, telecommunications, or agriculture. Also, an integrated research tool can help staff find the answers they need to complex tax questions.

Create a premium client experience

When it comes to the client experience, bigger isn’t always better. Larger firms can feel impersonal, and many clients prefer a premium small firm experience where they know their business matters. Clients have high expectations for the level of service they will receive from their accountants, even in smaller firms. Technology can help firms rise to the challenge.

A digital client experience with an electronic collaboration hub can help clients stay informed about the status of their work, ask questions, and easily provide information.

A project management or workflow solution can help firms be more responsive to client requests by providing centralized access to important information and optimizing workflows so work gets done more quickly.

Firms can even use predictive intelligence tools to understand how legislative changes will affect their clients and which clients will be affected.

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Start planning now to be more competitive in the future

Small firms don’t face the same limits as they have in the past. With the help of technology, many smaller firms can achieve a level of productivity and profitability that was formerly out of reach.

Download the white paper, Building Your Small Firm’s Ideal Tech Stack, to learn more about the technology you need to run your small firm.

Product Marketing Manager, Tax

Aimee Hall is a product marketing manager for Wolters Kluwer Tax and Accounting US, focusing on the professional market. In this role, she is responsible for leading the marketing strategy for tax software products including CCH Axcess Tax, CCH ProSystem fx Tax and ATX Tax. She joined Wolters Kluwer in 2006 and lives in the Chicago suburbs.

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