What are some of the big trends you see affecting tax professionals as we move into 2022?
There are quite a few trends affecting tax and accounting firms right now. At Wolters Kluwer, we’re seeing the increasing complexity of legislation, and how the rapid pace of change is impacting firms of all sizes, as the top trend.
This rapid pace of legislative change may even be the death of the normal tax season as we once knew it. Changes are coming more often and throughout the entire tax season, leaving professionals with less and less time to become proficient with the tax legislation, and therefore less time to help their customers and deliver the value they need to deliver.
Over the last several years, firms have found efficiencies using advanced technologies such as CCH® ProSystem fx® Scan and AutoFlow Technology. Looking past this, Wolters Kluwer is helping firms level it up a little bit more with tools that help increase their capacity. For example, K1 automation, or tools such as CCH AxcessTM iQ that help firms understand which of their clients are impacted, and how, by legislation.
The second trend I've been seeing is the shortage of skills / war for talent. Again, this trend is impacting firms of all sizes; firms are stuck between the demands of their clients and the shortage of skills.
We are hearing from firms that they need to better connect their people with processes and technologies. Firms need to look at how they can connect their people through data to help empower staff to make data-driven decisions. This will help with employee morale and staff engagement.
And from a hiring perspective, potential staff are looking for firms using advanced technology that will help them better serve their clients and do what they were trained to do – be a tax professional.
The staffing shortage and looking to support staff working at the top of their skill level is leading to another trend - outsourcing. Firms are looking at ways to augment their staff through outsourcing for audit and tax.
Firms of all sizes are turning to outsourcing when they aren't able to scale their tax or CAS practices as quickly as they need to. This is especially true when it comes to high-volume and transactional work; by outsourcing this type of work, their staff gain the capacity to perform more advisory-based services.
How are these trends affecting smaller firms?
Wolters Kluwer sends out an annual survey to thousands of tax and accounting professionals. In this year's survey, we heard from smaller firms that improving process automation is necessary for them to remain competitive and profitable and attract talent. Larger firms have already done this over the last several years, and are experiencing capacity gains when they implemented tools to automate their high-volume, low-value work.
One area where smaller and more boutique accounting firms are leading the way is in virtual offices. An increasing number of small firms are creating a virtual office to give flexibility to their staff clients.
The most successful firms and tax offices are also focusing on how they can be more proactive with client communication and gather data from their clients to communicate throughout the engagements with their clients and then deliver the end outcomes. More often than not, these smaller firms are looking to use cloud-based accounting technologies to change how they run their business, improve the work-life balance for their staff, replace these frustrating manual tasks that they have to do, and focus on their clients.