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Tax Practice Development

The 8 biggest obstacles to greater efficiency for tax & accounting teams

Tad Simons  Technology Journalist/Thomson Reuters Institute

· 5 minute read

Tad Simons  Technology Journalist/Thomson Reuters Institute

· 5 minute read

Efficiency has become the Holy Grail for many tax & accounting firms and corporate tax departments, but achieving it may be much more elusive

Efficiency — every accounting firm or corporate tax department leader wants more of it (or says they do), and everyone working in the firm or department is supposed to be looking for ways to improve it. But true organizational efficiency — the kind that delivers tangible results to the bottom line without compromising quality — is more elusive than most people think.

But why is that? The answer is primarily that overcoming the most common obstacles to greater efficiency requires a degree of humility, dedication, and openness to new ideas that many accounting firms and corporate tax departments lack.

While these obstacles can vary from firm to firm or department to department, depending on size and sophistication, they generally follow the eight themes outlined below:

1. Satisfaction with the status quo

By far the biggest obstacle to greater firm or departmental efficiency is the engrained belief that current operations are already fairly efficient, and that the time, money, and energy necessary to find incremental improvements here and there isn’t worth the effort. The status quo is good enough, the thinking goes, so why upset the apple cart with some grand “efficiency” initiative that we don’t really need?

2. Fear of change

For many managers, finding ways to be more efficient is tantamount to admitting that they run an inefficient firm or department, so there is very little incentive to improve. And for those who work there, the word efficiency is often perceived as code for “someone is about to lose their job.” With this mindset, any attempt at change will be resisted, so quelling these fears is essential if an accounting firm or corporate tax department wants any efficiency initiative to succeed.

3. Lack of leadership

Small efficiency improvements can be made by individuals working on their own, but in a mid- to large-size accounting firm or corporate tax department, no significant, system-wide sharpening of processes and workflows can happen without dedicated, clear-eyed leadership. Further, leaders who want to push for greater organizational efficiency must recognize that employees don’t respond very well to efficiency edicts that amount to “do more with less.” Rather, leaders must persuade department heads and employees that efficiency, properly understood, really means “doing more with less hassle.” It’s not about saving money — it’s about working smarter and better to create a more resilient and responsive organization, one that serves everyone’s collective interests.

4. Inability to listen

Accounting firms and corporate tax departments are full of smart, dedicated people who know sludge in the system when they see it. Failing to listen to them — that is, managing entirely from the top down — and neglecting to solicit their input is one of the most egregious management crimes a company can commit. Ironically, deciding not to listen to those in the trenches is something leaders often do in the name of efficiency. (They often say it’s in order to save time, money, and headaches; but it’s really expedience they’re after.) In the long run, seeking insight from those who are actually doing the work is the smarter move, not only because they might have good ideas, but because organizational outreach helps generate the esprit de corps necessary to execute any successful push for greater overall efficiency.

5. Poor communication

Corporate tax departments and accounting firms are complex in part because they must interact with — and wait for — other departments or other parties (including clients) to provide them with the data they need to do their jobs. For example, a corporate tax department’s efficiency is often dependent, to some extent, upon the relative efficiency of other company departments over which they have little or no control. For department leaders then, improving enterprise-wide communication — about deadlines, data needs, inventory, supply chain issues, expenses, compliance requirements, etc. — can help address those inter-departmental process and workflow bottlenecks that so often slow things down.

6. Technology without training

It’s no secret that the fastest path to radically improved accounting efficiency is through the use of technology specifically designed to automate repetitive processes and provide a single source of truth for billing, invoices, tax compliance, project tracking, contacts, and other data. But technology is just a tool, and technology alone can’t do anything without people who know how to use it, and who use it with the explicit intention of creating the kind of smooth, accurate, glitch-free workflows and processes that result in true efficiency. And that takes the kind of training that gives people the skills, knowledge, and confidence to make the most of the remarkable tools at their disposal.

7. Lack of trust

The most effective lubricant for any smooth-running tax department or accounting firm is trust — trust that leaders know what they are doing, are acting in good faith, and are making decisions in the best interests of the organization, its employees, and its clients. Without a bedrock of trust, nothing works the way it should. And trying to squeeze more efficiency out of a reluctant workforce — by forcing them to work longer hours, for example, or asking two people to do the work of three — is usually met with resistance and resentment. It’s counterproductive, in other words, the exact opposite of efficiency.

8. A culture of inefficiency

Every effective department or firm is a delicate choreography of people who are working together toward a common goal. Without a culture of cooperation and respect, however, no team will put in the time and effort necessary to achieve anything close to optimal efficiency. Because in addition to leadership, technology, and training, the road to greater efficiency is paved by people who are willing to devote their energy and attention to achieving it, day in and day out, whatever challenges and circumstances may arise to thwart them. Without a culture of efficiency, in other words, the sludge in the system will pile up, money will be wasted, and no one will really care.