In Thomson Reuters' new "2023 State of the Tax Professionals Report", we see how accounting firms' thinking and priorities have changed over the past few years
Given the events of the last three years and their impact on organizations of all types, it’s not surprising that many businesses are trying to reclaim some semblance of normal operations this year. Among them, tax & accounting firms are re-thinking their priorities in order to better meet client demand and position themselves for future prosperity.
Every year, Thomson Reuters surveys accounting firms and tax leaders from around the world to find out their strategic priorities for the coming year and how firms plan to implement those strategies. The results of the latest survey are presented in Thomson Reuters 2023 State of the Tax Professionals Report, an in-depth analysis of the strategies, trends, concerns, and challenges that tax professionals are facing in 2023 and beyond.
This year’s report is based on a survey of more than 500 accounting firms from the United States, United Kingdom, Canada, Argentina, and Brazil. The survey respondents are firm owners and leaders (partners, directors, or managers), as well as tax professionals in non-leadership roles. Accounting firms of all sizes participated in the survey, but participation was highest from small and midsize accounting firms.
You can download a full copy of the 2023 State of the Tax Professionals Report here.
The report goes deep into what strategies tax & accounting firm leaders said they are prioritizing in 2023, why technology and automation play such an important role in these long-term strategic plans, and how firms intend to streamline their operations to remain competitive. The report also examines the impact of a possible recession on leadership decision-making, and why effective leadership is so important right now.
Further, the report looks at why efficiency has re-emerged as a top priority for many clients, which in turn has made it a priority for many tax & accounting firms; indeed, the report details those specific tax services that clients say they want, and how some firms are providing those services.
Talent also is a top area of concern for tax & accounting firm leaders, and those surveyed share insight on why they think quality talent is so hard to find and retain. The report also examines what types of firms are hiring and for what positions.
New year, new priorities
The overall theme of the 2023 State of the Tax Professionals Report is “a re-shuffling of priorities,” because it’s apparent from the survey results that tax & accounting firms are thinking differently now than they were a year or two ago.
In the previous year’s report, for example, the top strategic priority worldwide was finding and developing quality talent. Back then, a wave of early retirements (the so-called Great Resignation) and a rash of senior-level job-hopping had accounting firm leaders wondering where they were going to find replacements, particularly in mid-management and senior-level positions. Those concerns are still valid, but they have been displaced heading into 2023 by a re-dedication to operational efficiency and a renewed interest in the quality and substance of the client services that firms offer.
This shift could be a sign that accounting firms are positioning themselves for growth in the face of a possible recession. Both of these strategic priorities, however, are also extensions of trends we’ve been discussing for many years — namely, the desire to optimize workflows, processes, and technology wherever possible, and the need to meet customer demand for a broader range of tax and business advisory services.
Trends in 2023
A detailed analysis of how these and other trends are likely to evolve over the course of the next year or so is an important part of the report. For example, in the area of efficiency — one that’s often cited as a priority by survey respondents — the report explores how the role of technology and automation is critical in the pursuit of greater efficiency. Underscoring this, the report notes, is the need for firms to optimize their existing tools and systems, train their teams on the technology, and designate a strong leader and champion to guide the firm’s efficiency efforts.
And in the section discussing expansion and improvement of client services, the report examines what additional tax services clients want beyond basic tax preparation and how technology, effectively deployed, can improve these client services. The report also looks at key developments such as the strategies that smaller accounting firms are using to compete with larger firms, and the alternative pricing models that many firms are considering in 2023.
More growth, please
Finally, the urge to grow was a strong stated goal for almost all tax & accounting firms in 2023, but how various firms plan to grow depends a great deal on the size of the firm and the range of opportunities and challenges presented by their current client base.
For example, the growth strategy for small and midsize firms is typically focused on trying to expand their client base, while larger firms (30 or more professionals) are more likely to focus on acquiring new clients, getting higher-value work from existing clients, expanding client services, and leveraging technological efficiencies.