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5 Key trends accounting firms should watch out for

Wolters Kluwer, CCH, a global provider of accounting, tax and audit information software and services conducted a survey which focused on the trends that affect the accounting firms and clients over the next five years. Nearly 500 accounting professionals specializing in tax, audit, CFO/consulting and other services at CPA led firms were polled in August, the report of which was released recently.

Key results of the survey were presented by Wolters Kluwer, CCH President and CEO Teresa Mackintosh during her keynote address on Monday morning at the CCH Connections User Conference 2014 in Orlando.

She said that there are ample opportunities for all accounting firms to boost productivity and profitability. Understanding the survey results combined with listening to industry peers describe how they capitalize on key trends plays an influential role in charting a course for future business growth.

The survey found that only 18 percent of accounting firms say they are “very prepared” to take advantage of the top five trends Wolters Kluwer, CCH identified as having the most significant impact on the future of the profession. Eighty-two percent of firms are “less prepared.”

According to the report, the five top trends in the profession are:

1. Increased focus on client service: Providing enhanced customer service, leveraging technology to automate processes and free up staff, while providing more personalized and strategic advice and counsel to clients.

Client service is no longer about the traditional one-one or face to face connections of past. They have become more about a continuous loop of client engagement opportunities. The connections between a firm and its clients have shifted from infrequent and deep to ever-present and open-ended.

“Agility trumps ability,” Doug Sleeter, founder and CEO of The Sleeter Group Inc., said in the report. “The pace of change is faster than ever, and accountants who focus more on agility than on raw ability will thrive in the coming years.”

80% of the “very prepared” firms believe that an increased focus on client service will have huge impact on the future of their businesses and 76% of the “very prepared” firms believed that technology will have a major impact in their ability to provide service, support and added value to both acquire new and retain existing clients.

2. Technology integration challenges: Making sound and strategic investments in technology today, while providing a smooth migration and integration path to new and emerging technologies.

What are the rewards for integrating technologies? According to the report, the average time it takes a firm to go from initial client engagement through invoicing to cash in the bank varies significantly between the “very prepared” and “less prepared” groups. The survey found that the “very prepared” group is 10 business days faster – with an average of 14 days compared to “less prepared” with an average of 24 days.

3. Digital mobility opportunities: Reducing capital costs; increasing service and employee productivity by leveraging mobile devices and digital platforms; and consolidating and integrating cloud-based information repositories.

Among the 93% of accountants who have already implemented or plan to implement mobile solutions in the next three years believe that that the biggest benefit would be improved client service (58 percent), followed by improved productivity (55 percent) and improved work-life benefits for staff (49 percent).

The survey also found that more “very prepared” firms have already adopted cloud technology compared to “less prepared” firms (62 percent versus 55 percent).

4. Talent management and succession planning: Identifying and managing talent, developing new and different skill sets, and managing the retirement of senior leaders.

According to the survey, nearly seven out of 10 “very prepared” firms are ready to take advantage of talent management and staff succession planning in looking at the future, compared to only 30 percent of “less prepared” firms.

More than 60 percent of equity partners in US public accounting firms are over the age of 50, and 75 percent of the membership of the American Institute of CPAs will be eligible to retire by the year 2020, Bill Carlino, managing director of Transition Advisors, noted in the report.

“That translates into a huge talent void,” he said. “Larger firms with 50 or more employees typically have formal succession plans in place, with efforts to retain talent. Among smaller firms with less than 25 employees, roughly 70 percent do not have any type of succession plan in place, nor path to equity among their employees.”

5. Social media as a business tool: Becoming more sophisticated in the use of Twitter and other social media to market their business, finding and engaging clients online, and monitoring the competitive landscape.

Sixty-nine percent of “very prepared” firms have already implemented social media as a business tool, while 28 percent plan to in the future, according to the survey. Among “less prepared” firms, 55 percent are already using social media platforms, while 34 percent plan to in the future.

Firms say the greatest benefits to having a social media presence are to enhance client satisfaction, followed by the benefit of attracting and winning new business.

“Using social media to ‘listen’ to clients and understand their industries is a powerful way to connect and deepen your client relationships,” Tom Hood, CEO of the Maryland Association of CPAs, said in the report. “Re-tweeting, ‘liking,’ and sharing their news and stories can keep your firm in front of the market continuously.”

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