As tax season approaches and the IRS struggles with operational challenges, firm owners face mounting pressure with shrinking budgets. The good news? You need far less technology than vendors want you to believe.
Randy Johnston, co-founder of K2 consulting, offers a brutally honest assessment of what tax practices genuinely require to function: productivity software, tax preparation software, a general ledger, invoicing, computers, and smartphones. That's the foundation. Everything else, cybersecurity, tax workpapers, research tools, workflow automation, document storage, and practice management systems, falls into the "slightly above minimum" category. Useful? Absolutely. Essential for survival? Not really.
The Counterintuitive Advantage
Here's what most firms miss: operating with a minimum viable tech stack doesn't condemn you to minimum viable returns. Johnston argues that lean firms often have significant advantages over bloated competitors because "they have to figure out what the clients want and really position the service as a value to the client."
Take recurring revenue as an example. Instead of charging $2,000 for a one-time tax return, Johnston suggests offering clients the option to pay $200 monthly. This transforms your financial planning dramatically. Want to make $200,000 this year? You need 84 clients at $200 per month. The math becomes straightforward, cash flow becomes predictable, and clients appreciate the flexibility.
Roman Kepczyk of Rightworks warns that one of the biggest mistakes small firms make is becoming generalists who chase any work that comes through the door. Instead, specialize deeply. Focus on employee benefit plans, real estate investors, or another specific niche. When you do a lot of similar work, expensive specialized software spreads across multiple clients and pays for itself. More importantly, you become an expert rather than a commodity provider.
Making Smart Purchases
When you do need to buy software, you can't afford mistakes. Joe Woodard of Woodard coaching advises asking vendors about their growth rates, user base, programming team size, and where they store data. If they balk at these basic questions, walk away. Before committing, Kepczyk insists on talking to at least three users who've paid for the software and used it for more than a year. The first year benefits from novelty and enthusiasm, but by year two you learn about the daily frustrations that matter.
Johnston emphasizes knowing your needs before approaching vendors. Create your shopping list first, then find solutions that match. Don't let salespeople tell you what you need, especially when they're more interested in bigger clients anyway.
The AI Reality Check
Technology news overflows with AI announcements, but what actually matters this busy season? A UK study of Microsoft Copilot found users saved an average of two hours on tasks, yet reported no clear productivity gains. Why? Extra verification steps and inefficiencies canceled out time savings.
This shouldn't surprise tax practitioners. You can't blindly trust AI-generated work on tax returns, and verification takes time. AI can help with drafting and research, but it's not a magic wand. That said, Google Chrome's new Gemini integration and ChatGPT Projects (now free) offer useful features without additional budget impact. Worth exploring, but set realistic expectations.
What Matters Most
Going into busy season with IRS challenges and limited budgets, the message is clear: the firms that thrive aren't those with the biggest tech stacks. They're the ones that understand what they truly need, invest wisely in the foundation, build recurring client relationships, specialize strategically, and focus relentlessly on delivering value.
Technology doesn't create successful tax practices. Strategic thinking and strong client relationships do. Everything else is just overhead. If you want to deep dive into what might be a good fit for your business without the sale pitch, check out our recorded app academies.
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
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