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White Paper: Four Strategic Moves to Remain Competitive in Tax & Accounting

As shown in analyses from McKinsey & Company, HBR and more, leading companies across industries understand that a truly customer-centric strategy results in more satisfied customers, increased loyalty, a lower cost to serve, and more engaged employees

A new Wolters Kluwer white-paper researched independently by Aberdeen Group and announced by Jason Marx, Wolters Kluwer’s CEO for Tax and Accounting North America, in October, identifies that at any point in time, one-third of a tax and accounting firm’s clients are considering leaving because they are not happy with their customer service. In the face of this stark reality, the research suggests that firms should focus their energies on four strategic moves to remain competitive. The common thread within those four strategic moves is the use of integrated end-to-end technology solutions—in combination with deep domain knowledge.

Customer Service and the Bottom Line

A recent free Wolters Kluwer white paper, ‘Game Plan for the Future: Are You and Your Clients in Sync?’ puts the business value of customer-centricity into sharp focus for tax and accounting professionals.

“This year’s survey provides a stark reality in that, at any given time, nearly one third of a firm’s clients could walk out the door. This indicates a critical need for firms to analyze how they are doing business today and where they need to improve to meet clients’ expectations,” said Marx.

Tax Accounting Customer Service

In fact, the paper shows that firms with satisfied customers expect an average of 7% improvement in revenue over the next year, while firms with dissatisfied clients predict their revenue to decrease by 11% over that time frame. That is an 18% difference in annual revenue—based solely on client satisfaction.

Citing case studies supporting the research, the white paper identifies four strategic moves for tax and accounting forms of all sizes to become more customer-centric, and so improve their bottom line. Down below is a summary of those four strategic moves.

1. Deep Domain Knowledge is Critical

According to the survey, the top criterion clients cite for choosing a firm is technical expertise, or an in-depth knowledge of tax law and accounting regulations. “Clients will always need accounting firms: for expertise, accuracy, and compliance” said Marx. In fact, 44 percent of clients say that staying current on the ever-changing regulatory landscape is one of the top factors that will most impact their relationship with their existing accounting firm.

Dealing with increased regulatory complexity is firmly in the wheelhouse of what those firms do day in and day out, the white paper states. Successful firms today use technology solutions to stay abreast of tax law changes, filing deadlines, evolving requirements, etc. Accordingly, Marx states, firms likely don’t see regulatory changes through the same scary lens their clients use. Perhaps many firms have just assumed that this is ‘table stakes’ for what their firm offers.

As cited in the white paper, one example of a company using technology to their competitive advantage is Global Tax Mobility LLP, headquartered in Los Altos, California. Specialized in complex international tax planning, compliance and HR issues, the company’s employees use CCH IntelliConnect as the gateway to access world-class research and tools. “The tools in CCH IntelliConnect are important because they do so much of the heavy lifting for us—whether it’s comparing tax situations across multiple international jurisdictions or alerting our clients about tax impacts before they learn this information from another source”, said senior manager Kimberly Engstrom at Global Tax Mobility.

2. Use Integrated Technology to Support Client Service

Timeliness and quality of services top the list of significant factors for clients selecting a firm (37 percent). However, fewer than half (47 percent) of the firms surveyed said they currently have enough staff to meet client needs. This indicates a significant challenge for firms when it comes to meeting the expectations of clients.

The survey found that successful firms with very satisfied clients use technology to streamline and automate workflows throughout the firm. Top technologies cited by firms to assist in client/firm relationships include:

  • Cloud-based software that allows for remote work on laptops or desktop computers (cited by both firms and clients as the No. 1 answer)
  • Software architecture that allows for the integration of various firm functions
  • Time-saving solutions that increase firm efficiency
  • Mobile technology access via tablets and smartphones.

Firms with integrated solutions—rather than ‘point’ solutions—are significantly more likely to have tools that automate execution of tax returns, tax research, compliance, workflow, and project management tasks, the white paper states.

One example of utilizing tax return automation tools as a time-save on the tax side is CCH® ProSystem fx® Scan with AutoFlow technology, which takes source documents and flows the data into a 1040 tax return in CCH Axcess™ Tax. This, as Brian S. Price, Founding Principal of PriceKubecka PLLC, notes, “Takes some of the tediousness out of 1040s so you’re able to be analytical and think about tax law instead of data entry. We have complicated tax returns, and a lot of brokerage statements. CCH ProSystem fx Scan does that automation so beautifully. I would say it probably has saved up to an hour or two per tax return.”

Integrated solutions also give firms the capabilities to better manage the information they have through document management and reporting solutions. In addition, an integrated solution supports client communication through capabilities such as client portals. In effect, these solutions are a one-stop-shop that address a modern firm’s challenges while also providing a way to improve customer satisfaction.

3. Improve Frequency and Quality of Client Communication

When asked about factors driving them to seek another accounting firm, 35 percent of clients cited poor communication as a key factor. The survey shows that when clients find it difficult to get answers from their own firms, they may leave to find their answers elsewhere. Notably, 75 percent of satisfied clients expect their firm to respond within 24 hours, and 62 percent of dissatisfied clients expect a response in the same time frame.

To combat this challenge, the paper explains, firms must build their client relationships beyond one single point of contact, becoming more proactive in their communication with clients to ensure they know that the relationship is truly valued.

4. Offer Higher-value Services

Clients who use a wider variety of services from their tax and accounting firms are more likely to report themselves as satisfied. Seventy-six percent of those clients using four or more services reported being satisfied, in comparison to only 50 percent for those using fewer than four services. At the same time, clients who use four or more services are twice as likely to believe that a tax and accounting firm can provide significant impact to the overall success of a business.

“Clients who feel they are receiving special services from their firm are far more likely to stick with that firm,” the white paper states. “In the survey, not one respondent that rated the uniqueness of the services they received from their tax and accounting firm at 4 or 5 (on a scale of 1 to 5) plans to leave its tax and accounting firm.”

Expert Solutions: The Common Thread

Throughout the white paper a common theme emerges: firms that combine deep domain knowledge with integrated solutions have happier customers.

Integrated technology benefits

Firms that have invested in an integrated end-to-end solution saw greater results, with higher satisfaction ratings from clients (81 percent) than those clients of firms that do not use an integrated end-to-end solution (66 percent).

As Marx said, “By focusing on the trends and relationship expectations cited in this survey—including better communications, strengthening and promoting a firm’s technical expertise and industry knowledge, and leveraging the latest technology to help automate workflows and ease the burden on staff—firms can focus on developing proactive strategies to improve their service, maintain stronger client relationships and recognize an increase in their bottom line.”

At Wolters Kluwer, we call this combination of deep domain knowledge and fully integrated technology, ‘expert solutions’. Our expert solutions help customers navigate today’s highly disruptive business environment in Healthcare, Tax & Accounting, Governance, Risk & Compliance and Legal & Regulatory. As the research in the white paper shows, this level of dedication to customer-centricity makes sense—from all sides of the competitive playing field.