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Tax & AccountingMay 21, 2024

Leverage your tech stack to remove growth restrictions

By:Wolters Kluwer Tax and Accounting

What’s stopping your firm from growing the way it wants to?  

While the answer might be different from firm to firm, the importance of being able to identify and understand the answer is the same for all firms. Some of the more common reasons firms struggle to grow at the pace they want include: 

  • Neglecting strategic goals: Failing to establish strategic goals can lead to a client base that doesn’t align with the firm’s long-term objectives. 
  • Commoditization risk: Without differentiation, firms risk becoming commoditized and competing on price alone. 
  • Data underutilization: Not leveraging client and firm data for decision-making can result in missed opportunities to increase capacity and profit margins. 
  • Tech stack misalignment: An inadequate tech stack that doesn’t support the firm’s strategic goals can hinder growth and scalability. 

How to overcome growth restrictions 

When analyzing what’s preventing your firm from meeting its growth goals, you will need to objectively examine your client base, growth strategy, and workflow. 

Often, what stops small firms from getting larger is simply time, or more precisely, the lack of it. 

Inefficient workflows force you to undertake time-intensive tasks that could be handled more efficiently with the right technology. With the pace of business today, it is essential to automate as much of your business as possible so you can focus on growing your billing. 

Here are some of the key strategies and how you can leverage your tech stack to lighten your workload and set the stage for growth. 

Define strategic goals 

Establish SMART goals aligned with your definition of success to guide your tech stack development. SMART goals are specific, measurable, attainable, relevant, and timely. 

You must define your growth strategy and commit to goals and timelines. Read more about using SMART goals to help achieve success. 

Optimize your tech stack 

It’s essential that your tech stack supports all facets of the firm, not just tax prep or bookkeeping software. And though research conducted by Accounting Today on behalf of Wolters Kluwer shows that the single piece of software 86% of small firms have invested in for tax prep, other solutions considered fundamental to an efficient and effective digital workflow show much lower adoption rate.  

When looking at your tech stack with an eye towards growth, here are the six categories of tools that we’ve identified as critical to success: 

1. Modern professional tax preparation software 

Modern tax software streamlines complex returns and automates repetitive tasks, such as data entry and calculations. The right tax solution allows you to focus on higher-value advisory services to grow your billing and client base. 

With an optimized digital tax workflow, you can also process more returns, more efficiently while reducing error rates. With more efficient processes, you can increase your capacity to take on additional business. 

Does your current tax software provide the level of automation you need and enable you to take on more complex returns to grow your business

2. Document management system 

Document management systems provide secure cloud storage for client files, enabling you to access data from anywhere. This makes collaboration easier and also ensures compliance with predefined rules on retention. 

You also get digital audit trails and version control to ensure you are always working with the most updated file. Shifting to a paperless workflow is also more eco-friendly. 

3. Workflow solutions 

Workflow solutions optimize your internal processes, such as automating client onboarding and tracking work in progress. Reducing the manual effort required in your workflow frees up time. A well-designed workflow will also be scalable, so your system can grow as you add more clients. 

Consider how your firm’s workflows currently support the firm’s growth goals

4. Client experience tools 

Client experience (CX) is now a key differentiator. How you provide personalized service and timely responses can make a big difference. Features such as client collaboration platforms, secure messaging, and online appointment scheduling can enhance CX. 

How important is the client experience? 

A Salesforce survey revealed that 80% of customers and clients value the experience a company provides as much as its products or services. In today’s highly competitive landscape, the client experience can be a major differentiator. 

Another reason to prioritize the client experience: referrals, a critical avenue for business growth. According to Adobe, 64% of those receiving exceptional CX are more likely to recommend your brand if they have a great experience.

5. Practice management software 

Effective practice management tools should go beyond time tracking and billing. They should make it easy to track progress and provide insights into resource allocation, profitability, and growth opportunities. As a small firm, you should expect your practice management software to serve as a central hub for managing client information, scheduling appointments, and tracking billable hours. 

Your ideal practice management solution also enables better collaboration among team members, providing real-time access to multiple staff and ensuring seamless communication and coordination. Ultimately, a practice management tool empowers small firms to deliver exceptional client service, improve productivity, and support the firm’s growth goals

6. Reporting and data analytics 

Key to your growth strategy is data. Data helps you understand your business, reveal positive or negative trends, and identify areas for improvement. It will be important to align your key performance indicators (KPIs) with your smart goals, especially when you are seeking growth. 

You need to benchmark your current state and then track performance against your KPIs with reporting dashboards that make it easy to focus on areas such as: 

  • Firm Health 
  • Partner Performance 
  • Staff Metrics 
  • Revenue Growth 
  • AR & Collections 
  • Project Status 
  • Resourcing 
  • Marketing 

Remove growth restrictions 

Each of these categories will play a significant role in streamlining processes and removing growth restrictions. Most importantly, they can free up capacity, giving you and your staff back time to work more closely with existing clients and bring in new clients. 

Technology is evolving at a rapid pace and transforming entire industries. Tax, accounting, and finance is no exception. You need a modern, innovative tech stack to position yourself for growth. 

If you’re looking for more ways for technology can help your firm meet its growth goals, complete the form below to download our white paper, “Building Your Small Firm’s Ideal Tech Stack.”

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and expertise that helps tax, accounting and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed and accuracy.

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