Modernize now — or be left behind

How AI, cloud adoption, and integrated technology help accounting firms grow faster and deliver greater client value

The tax and accounting landscape has entered a digital-first era, and firms are increasingly split into two groups. One is building integrated, AI-enabled ecosystems, and the other hopes incremental upgrades will be enough. They won’t be.

The good news is that U.S. firms are, overall, doing well. Data from our 2025 Future Ready Accountant report surveyed nearly 3,000 tax and accounting professionals from around the world. The survey found that 86% of firms reported year‑over‑year revenue growth in the past year, and 84% reported increased profitability, both significantly higher than in 2024.

We also found that cloud-based and tech-forward firms are 24% more likely to report high growth than their peers. Yet there’s more growth on the horizon for those who want it.

The busy season divide is real:  Why some accounting firms struggle while others thrive

Cloud is the default

As a whole, 81% of U.S. firms are at least partially in the cloud, 56% are operating in hybrid environments, and only 9% are still fully on-premise, according to the survey.

Integration turns scattered tools into a unified workflow, reduces friction, eliminates manual reconciliation, and enables faster, more accurate decision‑making.

Integrated systems: The foundation for scalable agentic AI workflows

AI powers daily work and elevates advisory

More firms now routinely rely on AI, and the majority plan to increase their AI investments in the next year. High‑growth firms use AI more frequently and embed it more deeply into daily operations.

The accounting industry’s most common uses for AI include tax law research, document summarization and automated meeting transcription. These uses are already delivering measurable gains in efficiency, quality, and client responsiveness.

At the same time, more advanced applications are emerging. More advanced firms are using sophisticated AI tools to enhance marketing, strengthen client communications, and surface insights that help professionals anticipate client needs.

For example, firms use AI to rapidly translate new legislation or IRS guidance into client-ready updates within minutes, or generate tailored RFP responses and prospect materials from internal knowledge bases.

AI is also helping professionals draft clear client emails and memos, standardize messaging across teams, and quickly synthesize complex tax law into actionable insights. This accelerates response times and improves the consistency of communication.

The new standard for client communication: Learn how AI can streamline messaging

Increasingly, firms are also using AI to turn raw data into forward-looking guidance, supporting a shift from reactive client responses to proactive partnerships. That shift matters because advisory has become the new front door of client value.

Ensuring tax-filing compliance may bring clients in, but long-term client loyalty comes from delivering insight, responsiveness, and strategic support. As firms across the board expand advisory offerings rapidly, AI can amplify human expertise and reveal client advisory opportunities that professionals might not otherwise have had time to uncover.

AI in tax and accounting: Where it can help most — and how to use it responsibly and at scale

For example, AI can quickly analyze large volumes of client data to identify opportunities such as overlooked tax credits, entity restructuring strategies, or timing optimizations that improve cash flow. AI can also empower professionals to move more quickly to strategic recommendations, expanding advisory conversations without adding to their workload.

Any lingering wait‑and‑see mindset toward AI is fading fast. Among firms that regularly use AI, 41% of high-growth organizations reported that it has delivered “much better than expected” performance in improving advisory services.

Strategic firms treat AI as essential infrastructure to fuel better decisions, deeper relationships, and a more modern client experience.

Keeping up with agentic AI:  6 strategies for accounting firms

Investors are rewarding digital maturity

Private equity influence — and growing industry consolidation — are accelerating across the profession, driven in part by firms’ need to scale, invest in modern technology, and address ongoing succession and talent challenges.

About one-third of firms globally received private equity funding in the past three years, and 34% plan to pursue it in the coming year, our survey found.

Infrastructure matters in both cases. Among firms surveyed, 38% say their technology ecosystem has significantly influenced investor interest, and cloud-based and tech-forward firms are leading the charge. In the U.S., an overwhelming 92% of firms say their technology positively contributed to attracting merger and acquisition interest or private equity opportunities.

Modernization is now about building long-term enterprise value and preserving strategic options, regardless of the growth path a firm chooses.

What high performers do differently

High‑performing firms share a common set of modernization habits. The impact of these practical, disciplined behaviors compounds over time:

• Prioritize integration with core platforms: Connected systems amplify the value of AI and automation.
• Start with achievable AI use cases: Staff use research copilots, document summarization, and workflow automation to demonstrate the immediate value that builds firmwide trust and buy-in.
• Invest in data quality: It’s not the sexiest part of digital maturation, but clean, structured data accelerates every subsequent innovation.

Design roles around value, not tasks: Rather than organizing work around manual steps, firms shift roles toward analysis, judgment, and client advisory – letting AI handle routine work so professionals can focus on higher-impact contributions.

Modernize in focused, manageable phases: Short cycles reduce resistance and produce visible results.

This is how tech-forward firms grow faster, operate more efficiently, and respond more quickly to regulatory or market shifts.

How high-growth firms are winning today:  Strategies that set them apart

The cost of waiting keeps rising

Action is a strategy that compounds. Firms can connect their systems, embed AI into everyday workflows, and give their people tools that let them work smarter and serve clients more strategically.

They modernize in months, not years, because they understand that in this market, speed and cohesion offer competitive advantages—and the next foundation for sustainable growth.

AI has reached a tipping point in accounting firms: Why leaders need a strategy now

This article originally appeared in Fast Company.