Written by Dr. Christy Short.
Companies that adopt connected accounting technology and leverage data to make informed decisions, and are generally more technologically mature, outperform slower adopters in revenue per employee by up to 39%. I am. This is a big deal that will equate to a lot of money in the long run.
In LightWorks' 2024 Accounting Firm Technology Survey, nearly 500 accounting, tax and bookkeeping firm leaders and decision makers provided their insights and attitudes about the role of technology in their operations. There is one major point. No matter the size of your company, technology adoption can help you significantly increase revenue per employee.
You may wonder why so many companies are still hesitant to adopt or adopt new technology, knowing that technology adoption can have a significant positive impact on the bottom line. This is a good question to ponder as you dig deeper into how implementation drives revenue while identifying key inhibitors to achieving double-digit profit growth.
Technology maturity drives revenue
As part of the survey, respondents were asked to plot themselves on what Lightworks dubbed the “Modern Firm® Maturity Continuum” (see sidebar). The continuum serves as a rubric for assessing a company's technology maturity, allowing leaders to assess where they fall on the continuum and, by default, determining the steps needed to move forward. can also be evaluated.
Companies in the top three levels (Contender, Collaborator, and Leader) benefit from increased revenue per employee.
To explain in more detail,
- Companies identified as competitors (Continued Medium Term) Achieve at least 29% more revenue per employee than initiators and followers.
- Companies recognized as collaborators or leaders Up to 39% more revenue per employee compared to initiators and followers.
Research shows that the adoption of leading cloud-based connected collaboration technologies supports increased revenue per employee. Score!
What prevents further profits
According to survey respondents, long-held beliefs about technology adoption are proving to be a barrier for many companies. People who rate themselves near the bottom of the continuum earn significantly less than their technology-adopting counterparts.
The core issues facing companies near the bottom of the continuum appear to be cost and resources. Survey data also shows that mindset influences lack of adoption, with 28% of respondents citing internal resistance. The top answers are:
- Lack of technology expertise: 44%
- Cost/Budget: 43%
- Lack of understanding of options: 29%
- Internal resistance to new technology: 28%
- Not enough time: 27%
- Current technology hinders migration to the cloud: 12%
Our findings show that technology maturity increases revenue per employee.
Companies that rank higher on the continuum appear to be leveraging the power of connected, collaborative, and cloud-based technologies (see sidebar) to significantly increase revenue on average. 39% increase per employee.
For more detailed data, download the entire 2024 Accounting Firm Technology Study.
Research details:
In September 2023, a 10-minute online survey was conducted among 493 decision-makers/influencers at accounting, tax, and bookkeeping firms across the country to determine their use of and attitudes towards technology in their businesses. Measured. The overall percentage of respondents by company size includes:
• 51% identify as part of a small business (1-5 people)
• 24% of medium-sized businesses (6-20 people)
• 25% of large companies (21 or more employees)
Significance was tested at a 95% confidence level.
Side bar:
Modern Farm® Maturity Continuum
The Modern Firm Maturity Continuum was provided to help survey participants better define and evaluate their current position in technology and business model effectiveness. Companies have chosen the definition that best describes their level of maturity.
followers
• Disconnected software solutions
• Mixing paper and digital documents with clients and/or companies.
• Inconsistent business processes
• Compliance work mainly in response to client requests
initiator
• Mostly connected software solutions leveraging a secure cloud environment.
• Standardized workflow
• Be clear about who you want to serve, what you want to sell to those customers, and your standard delivery system.
• A well-defined, connected technology stack leveraging a secure cloud environment.
• Standardized workflows leveraging digital documentation and consistent end-to-end processes
• Be clear about who you want to serve, what you want to sell to those customers, and your standard delivery system.
collaborator
• Standardized client technology stack powered by a secure cloud environment with seamless access to the general ledger of all business clients
• Standardized workflows leveraging digital documentation and consistent end-to-end processes
• Be clear about who you want to serve, what you want to sell to those customers, and your standard delivery system.
leader
• Standardized client technology stack powered by a secure cloud environment with seamless access to the general ledger of all business clients
• Standardized workflows leveraging digital documentation and consistent end-to-end processes
• A centralized data strategy powered by technology and AI provides insights to identify client advisory opportunities, enabling firms to proactively serve clients holistically and improve service levels. can improve efficiency.
definition
For the purposes of this study and report, the following terms are defined:
• Cloud-based environment: A secure, cloud-based environment where accounting firms launch all applications and conduct their operations.
• connected technology: Applications that connect, synchronize, and share information with each other.
• Collaborative technology: A digital environment for businesses and their customers to collaborate. You can access and work on shared files.
Dr. Kristy Short is Senior Director of Content Strategy at Rightworks.
