Accounting

Guide to TCJA extension for financial advisors and clients

Published

3 months ago

March 4, 2025

The slim margins, trillions of dollars in tax cuts at stake and key missing details add up to great reasons for financial advisors and their clients to contact their members of Congress.

“Now’s the time to be doing it, because they’re starting to put together the legislation now,” said Mary Burke Baker, a government affairs counselor and the leader of the tax policy practice of law firm K&L Gates. “It’s important to let them know what’s important.”

That’s because every Republican member of Congress could exercise outsize influence on the process as President Donald Trump’s party extends the expiring provisions of the 2017 Tax Cuts and Jobs Act. Even though no one expects any steep tax increases as Congress confronts its year-end deadline, Burke Baker acknowledged that it “has to be difficult to advise clients to the extent that you can advise clients” on questions that may affect their payments to Uncle Sam — without any definitive answers until the passage of a bill that has yet to be written.

The elusive law appears far away from the finish line. Republicans are debating among themselves about how much they are willing to expand the federal budget deficit and whether they should pursue other priorities first. The intraparty squabbling could even provide an opening for Democrats to change the entire equation, if Trump, House Speaker Mike Johnson and Senate Majority Leader John Thune fail to align the GOP behind a way forward.

As they aim to prepare clients’ for the unknown possible impacts to say, estate taxes, deductions for state and local duties, Trump’s campaign promises or any number of other wish-list items among various constituencies, advisors could drive themselves crazy trying to stay abreast of every phase of an inevitably complicated political endeavor.

Instead, they should be counseling clients about “avoiding the temptation to act based on the news” of any particular day in the Beltway, said Ben Henry-Moreland, a former advisor who’s a senior financial planning nerd with the Kitces.com blog. While he said he doesn’t see “a high probability” that the current exemptions to the estate tax might revert to a lower level, Henry-Moreland suggested that advisors discuss the possibility with clients and prepare any necessary documents before December, just in case. If there are alterations to estate taxes in particular, they could find it incredibly difficult to draft new documents in a rush.

“It’s not necessarily, ‘Oh, here’s what X and Y congressmen are saying,’ but more, ‘Let’s take the big picture and figure out, is it really going to help you to act based on what you’re hearing on the news now, versus waiting until we’re going to know a little bit more?'” Henry-Moreland said. “Otherwise the documents can go in the shredder. It’s good to have some amount of flexibility, but you probably don’t want to make too many commitments yet.”

Pressing numbers

At this point, Trump and Congressional GOP leaders are also looking for leeway as they search for common ground on the cost of the legislation, possible tax expenditures that add to it or potential spending cuts that take away from it. To pass the law, they must navigate any number of twists and turns in coming months, with detours to keep every faction aboard and moving on a budgetary path that hasn’t even been laid out. For advisors and clients wondering how they’ll get to the ultimate destination, Republicans have barely embarked on their journey.

House and Senate budget resolutions tabbed the cost of tax legislation at north of $4 trillion over the next decade, but Trump’s plans may come with a price tag between $5 trillion and $11.2 trillion. Even if lawmakers let the Tax Cuts and Jobs Act provisions expire, the national debt is on pace to top its prior record of 106% of gross domestic product in 2029 and trigger so-called bond vigilantes’ ever-higher interest rates that would curtail economic growth. The arguments that new tariff revenue or higher federal receipts due to economic expansion from the tax cuts hold more sway among the White House and its allies than with budgetary experts.

To the toughest fiscal watchdogs, the mere $2 trillion in spending cuts over a decade in the House budget plan would only amount to a quarter of the necessary reductions, according to Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a bipartisan-led nonprofit policy research organization.

“For anyone who has made the case they support lower government spending, this is a pretty puny number, which is pretty darn close to a rounding error,” MacGuineas said in a statement. “It would be far better to use these savings as part of a larger debt reduction deal than to offset tax cuts. We have cut taxes and increased spending year after year since the last budget surplus in 2001, which is how our debt got so out of control. Lawmakers now need to face the reality that we should be adopting a debt deal rather than pursuing tax cuts or spending increases.”

But Republicans are not likely to abandon the main tax plank of their official campaign platform. In a speech on economic issues last fall, Speaker Johnson vowed to “keep those cuts in place to support job creation, along with the doubled guaranteed deduction and a strong child tax credit.” Last month, Majority Leader Thune introduced a bill called the “Death Tax Repeal Act” while expressing the hope that Congress “will not merely extend this exemption, but that we will get rid of this fundamentally flawed tax once and for all.”

Trump pledged frequently on the campaign trail to extend and expand the tax cuts, but the lofty goals of his administration and those of Trump’s allies in the conservative Project 2025 blueprint are now facing the political and fiscal calculus of passing major legislation through Congress. Trump has displayed a willingness to separate taxes from other legislative priorities, even if he has a clear preference.

“Well, I like one big beautiful bill. I always have. I always will. But if two is more certain, it does go a little bit quicker, because you can do the immigration stuff early,” he said in January.

Devil in details

Despite some earlier talk of passing the legislation by May, the “latter half of the year” sounds like a much better estimate for the timing, according to Erica York, the vice president of federal tax policy at the nonpartisan, nonprofit Tax Foundation’s Center for Federal Tax Policy.

“Congress tends to act at the last minute,” York said. “In an ideal world, we would get this taken care of very quickly, in a fiscally responsible way, so that people would have the certainty to make decisions. I think this will be a very long, drawn-out process, given the slim majority in the House.”

And the cost could balloon well above $7 trillion, if lawmakers include Trump’s other priorities such as ending taxes on tips and Social Security benefits or creating a deduction for the interest on auto loans for American-made cars, according to Jonathan Traub, a managing principal and the leader of the Tax Policy Group at consulting and professional services firm Deloitte Tax. In their recipe for tax cuts and spending pullbacks that go far beyond any undertaken by Elon Musk’s efforts, lawmakers are effectively trying to come up with a solution to the problem of, “‘How do you fit 7 trillion pounds of sugar into a $2 trillion sack,'” Traub said.

Take the deduction for state and local taxes, which, conveniently, is often referred to as SALT. Currently, taxpayers may deduct up to $10,000 — a level that Republicans from high-tax states such as New York and California say is too low. Trump, Johnson and Thune will need nearly all of those votes to pass the bill if they are going to do so without any Democrats’ support.

Using figures and policy options from guidance document compiled in January by Republicans on the House Ways and Means Committee, lawmakers could: double that limit for married couples at a cost of $100 to $200 billion over a decade; boost it to $15,000 for individuals and $30,000 for married couples ($500 billion); make only property taxes deductible but eliminate deductibility for income and sales taxes ($300 billion); get rid of the deduction for corporations to create $310 billion in savings against the cost; or eliminate the SALT deduction entirely to raise $1 trillion in revenue over a decade.

The issue “breaks down on regional lines” rather than ideological ones, which explains why the SALT discussion has been so hard for leaders of both major parties, Traub said.

“I don’t envy anybody in that process,” he said. “It’s a really difficult challenge. It has vexed leaders for years, and it will keep vexing them this year, as well.”

The idea of repealing the tax credits for green energy investments that President Joe Biden and the Democrats put in place through the Inflation Reduction Act could deliver savings of $800 billion and fit nicely into the Trump administration’s stated goal of slashing government spending for climate change. However, that may threaten manufacturing jobs and other economic benefits connected to projects in many Republican districts, according to Joe Hughes, a senior analyst for the Institute on Taxation and Economic Policy, which provides “data-driven recommendations to shape equitable and sustainable tax systems.” So cutting them could be tricky, as well.

“It would only pay for maybe about a third of the tax cuts to the wealthy,” Hughes said. “That issue is going to be awkward for Republican lawmakers, but I would highlight that as the biggest pay-for that they can come up with.”

What to watch in coming months

For policy experts, the next important step will come with the requirement that Congress must agree to “identical budget resolutions” in both chambers, with instructions about whether the Senate will take up one or two bills subject to so-called reconciliation bills, Burke Baker said. That’s a Senate procedure enabling the passage of a bill with only a majority of 51 votes, rather than the 60 necessary to overcome a filibuster.

With Trump’s support, the House GOP is pursuing a “one big, beautiful bill” strategy encapsulating tax cuts as well as border security and other priorities. Republicans in the Senate are pushing for two reconciliation bills, which would delay passage of any tax legislation until later in the year. Burke Baker and other experts say that the longer it takes for the two chambers to reach agreement on a budget resolution, the more likely it will be for the Senate to prevail in waiting on the tax cuts until later in the year.

“It’s going to be difficult, even if both chambers were really rowing in the same direction,” she said. “It’s just a terribly complicated topic, and, if any of these issues were easier, they would have been taken care of earlier, and we wouldn’t even be talking about them right now.”

The procedural and policy topics could morph the debate into something altogether different if they stretch longer into the year. Otherwise, any tax changes are likely to fall “mostly on the corporate side” rather than on provisions affecting individual retail wealth management clients, Traub said. To him, repeal of green energy credits and deductions for corporate SALT and highly paid executives or an excise tax on stock buybacks would be more probable than any shifts in policies for municipal bond investments or mortgage interest.

If the Republican talks fall apart completely and lawmakers face the prospect of raising taxes in the year of a midterm election, the deduction for qualified business income for pass-through entities or even higher rates for some taxpayers could come up for debate if any Democrats’ votes are required for passage, Traub said.

“There’s a variety of things they could demand,” he said. “The universe of what is possible becomes quite a bit more dramatic.”

The bottom line

That scenario would represent a shocking outcome, though, for advisors and clients who don’t have much reason to expect a big tax hit from the legislation. Wealthier households will get more benefits from extending the expiring Tax Cuts and Jobs Act provisions than those with less than $400,000 in annual income. In a parallel universe, proposals such as raising corporate tax rates, placing foreign income of U.S. corporations in the same bracket as their domestic earnings or repealing the “Gingrich/Edwards loophole” may be on the table, Hughes said.

“There are plenty of options out there, and those are the sort of things that Republicans would be looking at and discussing if they were remotely serious about some sort of deficit-neutral tax reform,” he said. “There’s no goal of actual tax reform or of really helping the middle class here. The main goal here is to provide tax cuts to very wealthy individuals.”

Regardless, the complexities signal that there is “a good chance at this point” that passage of any bill waits until December, according to Henry-Moreland. Republicans won the trifecta with control of both houses of Congress and the White House, but passing a law entails much more than a simple agreement to push back the sunset date of the current rules under the Tax Cuts and Jobs Act or make them all permanent, he noted.

“I still don’t think that this bill is going to be a straight-up extension of TCJA. We have a different group of legislators, and we have different political and economic environments right now,” Henry-Moreland said. “There are so many moving pieces and so many different priorities right now. It’s going to be more of a TCJA replacement than an extension, per se.”

The debate currently revolves around factions among Republicans that are “pulling in the opposite direction,” with one seeking higher itemized deductions and the other trying to reduce the deficit, York said. The push-pull between them and Trump’s influence could leave advisors and their clients guessing until the end of the year.

“For each provision, you have a set of constituents who are vested in that provision existing, so it makes it politically difficult to say, ‘We’re going to cut it,” said York. “A dollar for something means a dollar less for something else.”

Accounting

Creating work-life harmony in your accounting firm

Published

2 days ago

May 23, 2025

Business Finance News

Your best senior manager just handed in her resignation. Despite competitive compensation, flexible scheduling options, and a clear partnership track, she’s leaving. Her reason? “I need a life outside of work.”

Despite significant investments in retention strategies, accounting firms continue to struggle with keeping top talent. The conventional approach of striving for work-life “balance” falls short in our profession, where tax seasons, client deadlines, and regulatory requirements create inherent intensity cycles.

The reality is that accounting doesn’t lend itself to consistent equilibrium between work and personal life. Your teams know this. You know this. So why do we keep pursuing a framework that fundamentally conflicts with the nature of accounting?

Accounting continues to face unprecedented challenges. According to the Thomson Reuters Institute 2024 State of Tax Professionals Report, firms are struggling with attracting and retaining talent with essential tax and technical skillsets, managing time effectively to meet deadlines, keeping up with changing regulations, and addressing billing and cash flow issues.

These challenges create a perfect storm that impacts team well-being. When we’re short-staffed, the burden falls on the remaining team members. When we’re racing against deadlines with complex regulatory changes, stress multiplies. The traditional response has been to simply work harder and longer — a strategy that’s proving increasingly unsustainable.

A perfect work-life balance is a myth. Accounting has natural rhythms and seasonal demands that make equal distribution of time impossible. When we frame the goal as “balance,” we set ourselves up for failure and create unnecessary guilt during intensive work periods.

“Work-life harmony” acknowledges that sometimes work will be the dominant priority, particularly during tax season or major client deadlines. Other times, personal life takes precedence. The key is creating intentional integration rather than forced separation between these aspects of our lives.

One firm I worked with transformed its approach by embracing this concept. Instead of pretending busy season wouldn’t be demanding, they built intentional recovery periods into their annual schedule. They created “no meeting Fridays” during non-peak times and implemented mandatory vacation periods after major deadlines. The result? Improved retention, higher client satisfaction, and increased profitability.

The business case for work-life harmony

When I talk to managing partners about work-life harmony, I often hear: “Sounds nice, but what’s the impact on our bottom line?” This is where the conversation gets interesting.

Through years of working with accounting firms, I’ve consistently seen that prioritizing professional well-being directly improves business performance. This connection between well-being and results is what I call “Fulfillment ROI.”

The research is compelling. Organizations implementing comprehensive wellness approaches see investment returns of 150% or higher, compared to just 0-50% returns for limited programs. These improvements come through reduced healthcare costs, lower turnover, and measurable productivity gains across the organization.

What might this look like in your firm? Consider the economics of retention alone: Replacing a salaried professional who leaves due to burnout typically costs 100-150% of their annual salary. For a $100,000 senior accountant, that’s up to $150,000 in replacement costs — before factoring in lost client relationships, team disruption, and knowledge transfer gaps.

These costs add up quickly, but there’s good news. When professionals learn to implement work-life harmony practices, they become both happier and more effective. In my workshops and leadership programs, the data shows:

89% of participants successfully implement time management strategies that enhance both productivity and well-being;
93% improve their ability to delegate effectively; and,
87% experience measurable reductions in workplace stress and burnout

These individual improvements directly impact your firm’s performance. As people feel more engaged, client service improves and productivity increases. Gallup’s research confirms this connection, showing that highly engaged business units achieve 23% higher profitability while fostering environments where employee well-being is 70% higher than in disengaged units.
The most skeptical managing partners often become the strongest advocates once they see the tangible improvements in both team retention and client satisfaction. When professionals find harmony between their work and personal lives, their energy, creativity, and commitment to clients naturally increase, creating a sustainable competitive advantage for the firm.

Creating harmony in your firm: Practical implementation

Ready to transform your firm’s approach? Here are five approaches that can transform your firm:

1. Implement team coverage models. Replace the outdated expectation of constant individual availability with structured team coverage systems. Consider creating client service teams with primary, secondary and tertiary contacts clearly identified. This approach ensures clients receive consistent support while allowing individual team members to fully disconnect during designated periods. The key is clear communication about how the system works and setting appropriate expectations up front
2. Design intentional seasonal workflows. Map your firm’s natural cycles and build recovery systems directly into your annual planning. Rather than pretending every week looks the same, acknowledge the rhythm of your business. Front-load client preparation during less intense periods, schedule mandatory breaks after major deadlines, and reserve slower periods for professional development and innovation.
3. Establish communication boundaries. Create clear technological guidelines that respect personal time. Try implementing a communication protocol that specifies which channels (email, messaging, phone) should be used for different urgency levels, with corresponding response time expectations. For instance, configure systems to delay non-urgent email delivery outside working hours, or establish “email-free” periods during the day to allow for focused work.
4. Integrate strategic recovery periods. Build brief renewal periods into your daily and weekly rhythms. This might include “deep work” blocks where no meetings or interruptions are permitted, implementing 10-minute breaks between all meetings, or establishing “no-meeting” days during non-peak times. The idea isn’t to work less but to work differently. Strategic pauses increase focus, creativity, and decision-making quality.

Takeaway

The firms gaining a competitive advantage today recognize that professional excellence and personal well-being reinforce each other. They’re creating sustainable high-performance cultures where intensity and recovery work in tandem.

The most successful accounting firms of the next decade will be those that recognize team wellbeing as a strategic advantage rather than a concession. Where will your firm stand?

Accounting

SALT write-off, Harvard tax, Medicaid cuts: What’s in Trump’s bill

Published

2 days ago

May 23, 2025

Business Finance News

House Republicans narrowly passed President Donald Trump’s economic package after a series of all-night negotiations and 11th-hour compromises.

The legislation now heads to the Senate where lawmakers are looking to make their own stamp on the bill. The core of the package — an extension of the president’s 2017 first-term tax cuts — is likely to stay, but the senators could make some changes to a slew of new tax and spending measures that touch many aspects of the economy.

Here’s a rundown of the House bill’s main provisions impacting people and businesses:

$40,000 SALT limit

The limit on state and local tax deductions would rise to $40,000, up from the current $10,000. The legislation places a new income test on eligibility for the tax deduction, phasing it out for individuals earning more than $500,000. Both the deduction cap and income threshold would increase by 1% a year for 10 years.

The bill also separately creates a new limit on the value of itemized deductions for those in the top 37% tax bracket that partly erodes the value of the new SALT cap.

Tips, overtime and autos

Tips and overtime pay would be exempt from income tax through 2028, the end of Trump’s second term, fulfilling — at least for four years — his campaign promise. The GOP bill would also make interest on auto loans deductible through 2028, addressing another Trump pledge from the trail. All three provisions would be retroactive to the beginning of this year.

Medicaid

The bill would accelerate new Medicaid work requirements to December 2026 from 2029 in a gesture to satisfy ultraconservatives who wanted more spending cuts.

The December 2026 deadline would fall just one month after midterm elections, with Democrats eager to criticize Republicans for restricting health benefits for low-income households. In an appeal to conservative hardliners, the legislation prohibits Medicaid from funding gender transition therapies or procedures for minors or adults.

Food stamps

The bill aims to save $300 billion by forcing states to pay more into the Supplemental Nutrition Assistance Program. It would also apply work requirements for longer. Beneficiaries must work through age 64, up from 54 under current law.

Interest expensing

Private equity and other heavily indebted business sectors won a major fight in the tax bill on interest expensing. The bill adds depreciation and amortization when determining the tax deductibility of a company’s debt payments. The maximum amount any company can get in such tax write-offs is calculated as a percentage of earnings. That’s why using EBITDA – which is typically bigger than EBIT — in this process would generate heftier tax deductions.

University endowment tax

Some private universities would face a dramatic tax increase on investment income generated by their endowments, posing a serious penalty to some of the nation’s wealthiest schools.

The provision would create a tiered system of taxation so that colleges and universities that meet a threshold based on the number of students would pay more. Under Trump’s 2017 tax law, some colleges with the most well-funded endowments currently pay a 1.4% tax on their net investment income. The levy would rise to as high as 21% on institutions with the largest endowments based on their student population.

The provision is a major escalation in Trump’s fight with Harvard and other elite colleges and universities, which he has sought to strong-arm into making curriculum and cultural changes that he favors. Harvard, Yale, Stanford, Princeton and MIT would face the maximum 21% tax rate based on the size of their endowments in 2024, according to data from the NACUBO-Commonfund Study of Endowments.

Private foundation tax

Private foundations also would face an escalating tax based on their size: 2.78% for private foundations with assets between $50 million and $250 million, 5% for entities with assets between $250 million and $5 billion; and 10% for foundations with assets of at least $5 billion, such as the Gates Foundation, a longtime target for Republicans.

Sports teams

The bill would limit write-offs for professional football, basketball, baseball, hockey and soccer franchises that claim deductions connected to the team’s intangible assets, including copyright, patents or designs.

Electric vehicles

A popular consumer tax credit of up to $7,500 for the purchase of an electric vehicle would be fully eliminated by the end of 2026, and only manufacturers that have sold fewer than 200,000 electric vehicles by the end of this year would be eligible to receive it in 2026. Tax incentives for the purchase of commercial electric vehicles and used electric vehicles would also be repealed.

Renewable tax credits

The legislation would cut hundreds of billions of dollars in spending by gutting a slew of clean energy tax incentives for clean electricity production. The bill would end technology-neutral clean electricity tax credits for sources including wind and solar starting in 2029.

It would also hasten more stringent restrictions that would disqualify any project deemed to benefit China from receiving credits. Those limits, which some analysts have said could render the credits useless for many projects, would kick in next year.

The legislation would also extend through 2031 tax credits for the production of biofuels.

Bonus for elderly

Americans 65 and older who don’t itemize their taxes would get a $4,000 bonus added to their standard deduction through 2028. That benefit would phase out for individuals making more than $75,000 and couples making more than $150,000. It would be retroactive to the beginning of this year.

Trump had campaigned on ending taxes on Social Security benefits, but that proposal would have run afoul of a special procedure Republicans are using to push through the tax-law changes without any Democratic votes. The higher standard deduction is an alternative way of targeting a benefit to the elderly but doesn’t fully offset Social Security taxes paid by many seniors.

Targeting immigrants

Immigrants would face a new 3.5% tax on remittances sent to foreign nations. Many immigrants send a portion of their earnings abroad to support family members in their home countries. Tax credits would be available to reimburse U.S. citizens who send payments abroad.

Factory incentives

The bill does not include Trump’s call for a lower corporate tax rate for domestic producers. Instead, it allows 100% depreciation for any new “qualified production property,” like a factory, if construction begins during Trump’s term — beginning on Jan. 20 and before Jan. 1, 2029, and becomes operational before 2033. That would be a major incentive for new facilities as Trump wields tariffs to drive production to the US.

Child tax credit

The maximum child tax credit would rise to $2,500 from $2,000 through 2028 and then drop to $2,000 in subsequent years.

Trump Accounts

The bill would create new tax-exempt investment accounts to benefit children, dubbed Trump Accounts. An earlier version of the bill called them MAGA Accounts, referring to the president’s Make America Great Again campaign slogan. The accounts would allow $5,000 in contributions per year and adult children would be able to use the funds for purchasing homes or starting small businesses, in addition to educational expenses. The bill would authorize one-time $1,000 government payments into accounts for children born from 2025 through 2028.

Pass-through deduction

Owners of pass-through businesses would be allowed to exclude 23% of their business income when calculating their taxes, a 3-percentage-point increase from the current rate. The increase is a win for pass-through firms — partnerships, sole proprietorships and S corporations — which make up the vast majority of businesses in the US.

Research and development

The bill would temporarily reinstate a tax deduction for research and development, a top priority for manufacturers and the tech industry. The deduction will last through the end of 2029.

Oil, gas and coal

The bill would raise billions by mandating the Interior Department hold at least 30 oil and gas lease sales over 15 years in the Gulf of Mexico, which Trump ordered to be renamed to the Gulf of America. It would withdraw Biden-era restrictions on development in Alaska’s Arctic National Wildlife Refuge. The measure would also mandate at least six offshore lease sales in Alaska’s Cook Inlet region over six years. The legislation would also require Interior to offer at least four million acres of coal resources for lease in the West within 90 days of enactment.

Radio spectrum

The legislation would restore the Federal Communications Commission’s ability for the next decade to auction radio spectrum to telecommunications companies such as Verizon Communications Inc. and Elon Musk’s Starlink.

New spending

The bill would allocate $150 billion for the military and $175 billion for immigration and border security.

Accounting

Boomer’s Blueprint: Leveraging assets to grow: A guide for firm leaders

Published

2 days ago

May 23, 2025

Business Finance News

Growth in the accounting profession isn’t just about adding more clients or staff; it’s about thinking differently. As market demands shift and technology reshapes our work, firms that want to lead the pack must learn to grow smarter, not just bigger.

One powerful way to do that is to leverage assets. Inspired by the Exponential Organizations model, this strategy allows firms to scale rapidly, control overhead, and expand their impact without increasing what they own. At a time when efficiency and agility are competitive advantages, understanding how to make the most of resources you don’t own could be the difference between stagnation and strategic growth.

What are leveraged assets?

Leveraged assets refer to resources a business uses but doesn’t own. Instead of holding physical or digital assets on its balance sheet, a firm can rent, lease, borrow or access these assets through innovative arrangements. Examples of leveraged assets include:

Physical assets. Accessing office spaces, IT infrastructure or shared client meeting rooms on demand.
Digital assets. Cloud-based software for tax preparation, client relationship management systems, or collaborative work platforms like Microsoft Teams or Asana.

Big companies like Uber employ this strategy, building scalable businesses by accessing underutilized physical assets rather than owning them.

Accounting firms traditionally rely on owning resources, from office buildings to proprietary software systems. However, embracing a leveraged model can bring several benefits, including:

1. Cost optimization. By leasing or renting resources, firms can convert fixed costs into variable costs, reducing financial risk and improving cash flow.
2. Scalability. Leveraged assets help firms scale operations quickly to meet demand during busy seasons without long-term commitments.
3. Focus on core competencies. Outsourcing noncore functions like IT infrastructure or HR lets team members concentrate on delivering high-value advisory and consulting services.
4. Flexibility and resilience. Accessing on-demand resources gives firms the agility to adapt to market changes or technological advancements.

Applying leveraged assets in your firm

Here are four ways your firm can reduce costs, improve efficiency, and expand capabilities without increasing ownership.

1. Digital transformation. Start by embracing digital tools that remove the limitations of traditional infrastructure. Migrating to cloud-based accounting platforms like Xero or QuickBooks Online improves accessibility for your team and clients, and eliminates the ongoing costs of server maintenance and upgrades.

Layer in AI-driven tools to automate routine processes like document collections, data aggregation, tax calculations, and client communications. This frees up your team to focus on high-value advisory work.

2. Shared physical resources. Rethinking your physical footprint can also drive efficiency. Rather than investing in permanent office space in every market, consider co-working or shared spaces for occasional client meetings to create a more flexible and cost-effective approach.

Likewise, leasing equipment like high-speed scanners and printers gives you access to the latest technology without the burden of ownership, maintenance or depreciation.

3. Platform ecosystems. Tapping into established software ecosystems allows firms to deliver better service without building everything in-house. Platforms like Intuit ProConnect, Wolters Kluwer and Thomson Reuters offer integrated tools tailored to tax and audit workflows.

Add-on solutions like TaxCaddy and SafeSend enhance the client experience by streamlining document exchange, electronic signatures, and payment collection while keeping your core systems tightly connected.

4. Outsourced expertise. Not every capability needs to live within your four walls. Bring in outside consultants for specialized services like cybersecurity reviews and strategic planning. This lets your firm offer premium expertise without hiring full-time staff. This on-demand access to deep knowledge ensures you stay competitive and relevant, even as client needs evolve.

A leveraged assets strategy

Follow these steps to successfully integrate leveraged assets into your firm.

1. Audit current resources. Identify underutilized assets within the firm and assess opportunities for outsourcing or sharing.
2. Explore digital solutions. Research tools and platforms that align with your firm’s “Massive Transformative Purpose.”
3. Validate the market. Ensure sufficient demand for the services or solutions you plan to scale.
4. Build partnerships. Establish agreements with third-party providers for seamless access to assets.
5. Measure performance. Track the effectiveness of leveraged assets using metrics such as cost savings, client satisfaction, and revenue growth.

Leveraging assets offers several advantages, but it’s important to consider potential downsides. For example, overreliance on gig economy workers for seasonal tax help may impact team culture or service quality. Make sure your growth strategies align with ethical practices and long-term client relationships.

Leveraging assets isn’t just a tactic for tech startups; it’s a transformative strategy your firm can adopt to unlock exponential growth. By strategically accessing physical and digital resources, you can enhance agility, reduce costs, and better serve clients in an increasingly complex financial landscape. The path to becoming an Exponential Organization starts with a single step: rethinking ownership and optimizing leverage.

Think — plan — grow!