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Tech Splurge: Small Companies Embrace High-Tech Investments

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TLDR:

  • Small accounting firms are the most committed to investing in new technologies.
  • A survey from accounting solutions provider Caseware found that firms with between one and 10 people are most likely to significantly or slightly increase their rate of technology adoption over the next two years.

Small accounting firms may not have the massive budgets of their larger counterparts, but they’re the most committed to investing in new technologies over the next few years. These were the findings of a survey from accounting solutions provider Caseware. When taken as an average of all responses, the profession will likely see a small uptick in technology adoption, as the response rate for both “Significantly increase” and “Slightly increase” were about 5% and 3% higher than in the previous survey, respectively. However, when broken down by firm size, the results show a very different pattern.

Namely, firms with between one and 10 people are most likely to say they intend to either significantly or slightly increase their rate of technology adoption over the next two years. Such firms made up the biggest proportion of those choosing these options. Meanwhile, firms of 500 people or more were most likely to say their technology adoption would decrease slightly. “This could indicate that larger organizations are planning to ease up on tech adoption after having devoted significant resources to this during and immediately after the pandemic,” said the Caseware report.

As for what kinds of new technology firms are planning to implement, the Caseware survey found that software for client engagements (e.g. tax, audit, review, etc.) was the biggest priority at 20.8%, followed by practice management software (15.8%), process automation (14.8%), security (13.8%), analytics (13.3%), generative AI (10.2%), collaboration (9.9%) and other (1.4%). The survey also found a sharp jump in cloud adoption: nearly 40% of survey respondents said they have already adopted cloud tools to manage their engagements, while 48 percent are planning to do so at some point over the next two years.

The statistic on generative AI stands in stark contrast with the findings of another recent survey, which indicated that 40% of firms were interested in the new technology, versus the 10% in this one. When asked what they’re doing with generative AI already, the majority of Caseware survey respondents seemed to be avoiding contact with actual client engagement work. While it found 11% use it in tax work, 16% use it in advisory and 21% use it in audits, reviews and compilations, these were in the minority. The survey also found 26% used it for internal business functions and 44% said they didn’t use it for any of the aforementioned options. In this, there is more harmony with yesterday’s survey, which found 72% of firms said they would primarily use generative AI for research, 64% said it would be used for client communication, and 40% said marketing.

Caseware conducted the 2024 State of Accounting Firms Survey from the second week of September to the second week of November, 2023. It was offered in five languages: English, Spanish, French, Dutch and German, garnering 2,054 validated survey completions. Responses were received from 49 countries, with the largest participation rates coming from the United States, Canada, South Africa and the United Kingdom.

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