The accounting profession is more complex than ever before. Small and medium-sized accounting firms face increasing competition, shifting client expectations and rapid technological innovation. While many firms seek to adapt through trial and error, our recent study provides evidence-based insights into what truly drives perceptions of success in this challenging landscape.
Through a survey of 192 firms collected by the Center for Accounting Transformation, we found that the most significant factor consistently associated with success is technological leadership. Firms that consistently stay ahead of their peers with advanced technologies outperform their peers. Beyond technology, other contributors to success include exceeding client expectations and fostering a culture of continuous learning and improvement.
For practitioners, these findings offer actionable guidance. Success in today's accounting world is not about doing everything, but about prioritizing the right strategies. Below, we outline the suggestions that can help small and medium-sized firms thrive based on our empirical results.
Key factors driving firm success
Leadership in technology adoption: The clear standout factor in our research is technological leadership. Firms that position themselves ahead of their peers in adopting advanced tools—such as AI, automation and cloud platforms—are consistently perceived as more successful.
- Why it matters: Technology enhances efficiency, allowing firms to automate parts of routine tasks like tax preparation and reviewing workpapers. It also enables firms to remain resilient during periods of rapid change, adapt to shifting client needs, and compete effectively with larger firms. By leveraging technology, firms can streamline operations, reduce costs, and free up resources to focus on higher-value services.
- Survey insight: Respondents noted that tools like AI not only streamline operations but also solve staffing challenges. For instance, respondents to our study noted, "AI allows me to produce more today by myself than when I had a staff of 20." Additionally, remote work technologies were highlighted as game-changers: "The ability to work anywhere with our paperless environment is a tremendous advantage."
Exceeding client expectations: Technology is not the only factor that incrementally enhances perceptions of success; firms must also focus on delivering exceptional client experiences. Firms that go beyond meeting expectations to actively contribute to client success see stronger client loyalty and reputational benefits.
- Why it matters: Clients increasingly demand tailored, strategic solutions, not just compliance work. Exceeding expectations strengthens trust and fosters long-term relationships.
- How to implement: Use client feedback to identify service gaps and opportunities for improvement. Train staff to adopt a client service approach, focusing on clients' broader business goals.
A culture of continuous learning and improvement: Organizational culture is another important driver of success. Firms that emphasize learning, innovation, and improvement outperform those focused solely on team dynamics or routine processes.
- Why it matters: A forward-thinking culture helps firms adapt to industry changes, attract top talent, and retain staff in a competitive labor market.
- How to implement: Implement professional development programs that prioritize tech skills and leadership training. Regularly evaluate firm processes and encourage team input for improvements.
Surprising findings, what didn't matter as much: Our empirical research also debunks some common assumptions. For example:
- Service specialization: While many practitioners emphasize the need for industry or service specialization, our findings show these factors have limited incremental impact on success.
- Advisory work vs. compliance work: Contrary to popular belief, the balance between advisory and compliance work does not significantly drive success. Instead, success stems from how services are delivered, not the type of services offered.
Practical steps for practitioners
To capitalize on these findings, firms should focus on:
- Investing strategically in technology
- Assess your firm's current tech stack and tech abilities and compare it to industry leaders.
- Prioritize investing in the technology skills of your people and in investments in AI, automation and cloud-based solutions that directly enhance client service and operational efficiency.
- Reframing client relationships
- Position your firm as a strategic partner, not just a service provider.
- Create metrics to measure and track client satisfaction and loyalty.
- Fostering a culture of innovation
- Encourage staff to explore new technologies and processes.
- Recognize and reward innovative ideas that enhance client or firm outcomes.
Looking to the future
The accounting profession is evolving at a breakneck pace, with new technologies like generative AI, predictive analytics and remote work technology reshaping the landscape. For small and medium-sized firms, success depends on being proactive: adopting transformative technologies, exceeding client expectations, and fostering a forward-thinking culture. By prioritizing these strategies, your firm can navigate the challenges ahead and emerge as a leader in the industry.
For more detailed insights or guidance on implementing these strategies, feel free to reach out to the authors.
