Nearly 60% of all organizations are using data analytics to drive business innovation, according to research by New Vantage Partners. Leading companies are putting investments in data and analytics at the top of their priority list for 2024.
But, big data is just for big firms, right?
Wrong.
For small tax and accounting firms, learning how to leverage your client and firm data can be a big differentiator in reaching your strategic goals.
The 2024 Accounting Industry Report by Wolters Kluwer revealed firms top priorities for the coming year:
- 60% — Grow revenue and profit
- 50% — Improve client service and engagement
- 50% — Improve operational workflows
- 44% — Reduce costs
- 20% — Improve employee effectiveness
Data analytics is key to optimizing each of these priorities.
Despite the fact that our survey data across several years shows a clear correlation between higher degrees of technology and revenue growth, just 14% of firms say they are analyzing data for actionable insights.
Are you missing out on using your internal and client data to drive decision-making?
If so, here’s how to dig into that data to identify opportunities to increase capacity and your profit margin.
Data-driven insights
The more you know about your clients and their challenges, the better your firm is positioned to help them succeed. You can leverage predictive intelligence, big data, and data analytics to provide clients with valuable data-driven insights that help set your firm apart in a highly competitive market.
You can make data-driven decisions about your top priorities. Here are just a few ways you can leverage business intelligence to meet your goals.
Grow revenue and profit
- Analyzing high-value client data to identify ideal targets for outreach
- Looking for patterns that can reveal upsell and cross-sell opportunities
- Segmenting clients for targeted marketing campaigns
Improve client service and engagement
- Tracking client feedback and satisfaction ratings to aid in retention
- Identifying areas where improvement is needed
- Personalizing client interactions based on preferences and behavior patterns.
Improve operational workflows
- Analyzing data from past tax filings and resource utilization
- Leveraging predictive analytics to forecast workloads and staffing
- Identifying bottlenecks where automation can eliminate manual tasks
Reduce costs
- Analyzing administrative costs and operational expenses for cost reductions
- Evaluating client profitability, project costs, and billing rates to adjust rates
- Finding improved workflow to assign tasks to the most cost-effective resources
Improve employee effectiveness
- Analyzing employee performance data, skills, and productivity
- Identifying skills gaps and providing additional resources or upskilling
- Optimizing staffing levels, workload distribution, and resource allocation
Informed decision making
Comprehensive, real-time reporting and dynamic dashboards turn internal and external data into decision-making fuel. That gives firm management the power to make more informed strategic decisions about staffing and identify new opportunities and additional services to offer.
To determine the best reporting and data analytics tools to integrate into your tech stack, consider how each option can help you answer these questions:
- What are our strongest and weakest revenue streams?
- Where can we achieve strategic growth?
- Which internal processes are inefficient?
- Are staff entering data consistently and following a standard process?
To leverage data, you need a solid tech stack and maximize its value. Our survey shows this continues to be a concern in tax firms as many feel they are falling behind the curve with their current technology. 49% of firms feel they are utilizing 50% or less of their tech stack’s capabilities — a 23-point increase from just a year ago.
Choosing the right business intelligence solution for your firm
With any tech tool your firm invests in, ensure that you choose a business intelligence solution that can scale with your firm as it grows. Selecting a vendor with an open API policy will allow all your software, systems, and databases to work together seamlessly, sharing data and helping you eliminate data silos that can skew analysis.
Looking for even more ways to leverage technology to reach your strategic goals? Download our white paper, “Building Your Small Firm’s Ideal Tech Stack.”
