Private equity is reshaping the tax and accounting industry. Here’s how tech and culture may determine who wins.

The tech equation – and the cultural one

Private equity firms are laser-focused on EBITDA, productivity, and scalability. But they know those gains don’t come from just cutting costs – they come from investing in the right infrastructure. For accounting firms, that means a fully integrated, cloud-based tech stack and a culture that’s ready to use it.

The most recent Wolters Kluwer Future Ready Accountant report found that more than 40% of firms aren’t fully utilizing their current technology investments. This lack of utilization is often because of siloed processes, inconsistent adoption across teams, or a lack of time and resources to drive change.

That’s a huge missed opportunity, especially as AI is rapidly reshaping industries like tax and accounting. With the pace of technological change happening fast, firms that want to stay competitive need to develop a mindset and a culture that prioritizes their use of AI if they want to be ready for what’s next.

Kadow says that in his view, PE firms that look not just at financials, but a tech-friendly leadership mindset, will realize the most return on their tax firm investments. That means asking questions like, are firm leaders open to change? Are they willing to work through the discomfort of rethinking workflows, retraining teams, and reimagining what efficiency looks like, with the ultimate goal of driving greater efficiencies and greater profit?

One stack. One system. Real scale.

Here’s the challenge with scale: you can’t grow efficiently if every team is doing things their own way.

That’s exactly why some private equity firms are pushing for cloud-based tech stack uniformity across their portfolios. When every firm under the umbrella uses the same tech stack – and follows the same workflows – you unlock the ability to centralize work, move talent around where it’s needed, and standardize service delivery.

For example, an accountant in Chicago struggling with a staffing crunch can temporarily shift return prep work to colleagues in Phoenix, where capacity is higher. Or a single, AI-powered client onboarding process can be rolled out across 12 firms, reducing time-to-engagement from weeks to days.

Data from the Future Ready Accountant report indicates a strong correlation between integration levels, revenue performance, and a firm’s confidence in its ability to meet customer needs. Firms with more integrated tech stacks are more likely to report higher revenue growth and the bandwidth to offer high-value advisory services, compared to firms with less integrated tech stacks.

That’s why Kadow believes that the winning private equity investments will prioritize tech system integration and a leadership culture that embraces it.

From compliance work to advisory revenue

Technology does more than reduce costs; it creates time. Firms can use that time to build higher-value, stickier client relationships.

When AI and automation handle the rote work – data entry, reconciliations, basic tax prep – firms can focus on advisory services like tax planning, business forecasting, and financial strategy. That shift is critical not just for growth, but for relevance.

PE firms understand this shift better than anyone. They know that building long-term value means moving firms up the value chain, and that tech is the lever that makes that possible. But tech without the right mindset won’t scale. That’s why cultural fit – especially a willingness to change – is often as important to investors as financial performance.

The bottom line

Private equity is no longer a fringe concept in accounting. It’s a force that’s rapidly reshaping the industry. Whether or not your firm is seeking PE investment, the market dynamics are changing. Technology, scale, and operational efficiency are no longer optional. Firms that embrace transformation now will be better positioned, no matter what the future holds.

Having a tech stack that’s underused is a missed opportunity. But with the right leadership mindset and firm-wide culture, it can become a competitive advantage and a path to lasting value.