We all have resolutions when the New Year hits. Personal. Professional. Both. As the leader in Practice Management solutions, Canopy’s Tax Resolution Subject Matter Expert, Jason Penninger sat down to flush out his thoughts and predictions for accounting professionals this year. See how yours matches up.
#1: The virtualization of the accounting industry will be more of a challenge for accounting firms than legislation updates this year.
Accounting professionals are used to being flexible and staying current with the ever changing tax laws and regulations. The real challenge for industry professionals is transitioning from a paper-based process and embracing new technologies, platforms, apps and solutions.
#2: Accounting professionals will continue to shift their services toward clients who can assist in providing increasingly helpful services versus focusing on quantity.
The accounting profession used to be about getting as many clients and doing as many returns as possible.
But now with tax prep software and the waning number of available accountants, there is an increasing focus on quality clients and raising prices while providing new services like wealth management and niche accounting services.
A lot of clients are a drain on firm resources, for the fee (time versus fees). Firms will shift their focus of services on higher value clients who understand what’s required from them, are organized and are looking at accountants as a partner.
#3: Accounting firms will increasingly turn toward cloud-based software in an effort to attract and maintain employees.
While digital transformation within accounting firms generally has a very positive impact on client relations and reallocates time spent on admin to more beneficial activities, the driver for adopting technology will largely be in an effort to attract the increasingly competitive talent pool while supporting more opportunity to work remotely.
#4: Inflation will help accountants raise their prices to the value of their services.
Like a lot of professions that are mainly individual practitioners or very small businesses, it can be a challenge to raise rates. Inflation will likely serve to help accountants raise their rates to the value of what they are offering.
#5: SMBs do not need to lose sleep over the IRS’ initiative to hire tens of thousands of new agents, yet.
The recent bill approving 80,000 new IRS agents over the next ten years is more of a political push casting fear on high income taxpayers and falsely promising SMBs that they will not be the target of audits. But the reality is, the majority of these new IRS agents will be entry level, less experienced professionals and will be focused on SMBs.
The good news is, it will take years to hire additional agents to make a significant impact and as long as SMBs are using tax professionals that understand the ins and outs of SMB taxes. And having the right tax professional is now more important than ever to help proactively avoid negative IRS outcomes.
We eventually will see an increase in audits but there are tools for tax professionals to leverage to pull their clients’ transcripts and double check to confirm all the numbers are accurate and their income adds up.
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Jason Penninger is Tax Resolution Subject Matter Expert at Canopy.