Accountancy efficiency: Five signs your practice is leaving capacity on the table

As accountants, we often look for warning signs in our clients’ businesses. But have you searched for structural issues inside your own firm?

Perhaps the biggest internal hazard facing accountancy efficiency today is a lack of capacity.

If the capacity’s not there, work will feel like an unbearable load. Business development will feel unstable. Your firm will lose to the competition because it’s missing essential services and can’t deliver extra value.

Access to skills is now the single biggest barrier to growth for UK mid-tier accountancy firms. 56% cited the recruitment and retention of qualified staff as a top-three talent challenge. — Source: ICAEW, Evolution of Mid-Tier Accountancy Firms 2025

What this blog is about

This blog covers five warning signs that accounting firm efficiency is dropping and capacity is suffering. I’ve identified these over the years – both as a practitioner and as an advisor helping firms improve operations.

We’ll look at:

1. Disconnected systems
2. Resources not being used
3. Why refining your “VIP” client list is essential
4. How mindset is everything
5. Why you need a goal beyond profit

Let’s start with how disconnected systems affect accountancy efficiency.

ONE: Your digital systems are disconnected

The more detached your systems are, the longer it takes to get work done. That’s because the apps you use don’t sync information. Instead, data has to be moved around manually or retyped. As a result, there’s a real risk of mistakes entering your work. Meanwhile, staff waste time on tasks beneath their paygrade.

It’s common for firms to have connection failures in their system; it happens over time as practices outgrow tools. A mid-sized firm finds itself using technology suited to its former, smaller self. Any mergers or acquisitions, of course, also bring yet more apps. A small firm, meanwhile, will have its own software clutter – a hastily assembled stack from its start-up days.

The danger is that people get used to the discomfort this brings. Without pausing to assess, a firm will simply carry on making do. They become used to the inefficiency and cost of these ad-hoc tools – they often pay for a lot of overlapping functionality.

31% of UK mid-tier managing partners cite introducing, understanding and keeping up with new technology as a major challenge — second only to recruitment difficulties. None said their firm was “tech savvy” when asked. (Source: ICAEW Evolution of mid-tier firms: tech investment and AI)

Even if a firm does think about making changes, it’s easy to put these improvements off; when you choose new tools, you’ll have to think about redefining workflows and training.

The fix: consolidate your software. Look at your existing tech stack. For example, do you have one vendor supplying tax and accounts software and another practice management? Consider using the same vendor for both. The two will very likely integrate far better.

Also, pick intuitive solutions to cut down on training time. To do that, choose vendors with accountants on their development teams – the software will match how your finance professionals think, making it easier to adopt.

TWO: Resources are not being used efficiently

There are currently more people leaving the industry than entering it. Of those that are entering the profession, many are considering starting their own business (Source: AccountingWeb/Intuit).

That can mean tasks take longer because more of your staff have less practical experience. You may also have a smaller team than a few years ago.

So, are there subtle warning signs your staff are starting to feel the pressure? Yes. These include:

• Overtime creep – beyond the moments in the year (like tax season) where you expect a spike
• An increase in sickness rates
• An increase in mistakes (so complaints from clients)
• Missed deadlines

Unfortunately, without resource-tracking tools, you only discover problems when something goes badly wrong, invariably at the worst possible time.

Why? Because nobody likes to admit they are too stretched in accounting. It feels like defeat in a hardworking profession, and the fear is that the boss will think they’re avoiding work.

When it comes to your digital system, then, it must do two things to compensate:

• It must help you to take away meaningless, routine tasks with the help of automation.
• It must help you to keep a non-intrusive eye over who is doing what.

This data should be visible on one dashboard to all that need to see it. If you’re relying on spreadsheets, that transparency becomes a struggle.

With the right digital system, you can maximise existing staff capacity. Then you can decide if you need to employ more staff or use a service like outsourcing. Outsourcing suits tasks accountants didn’t sign up for – such as bookkeeping, payroll, and audits. If they want to focus on advisory, you can use outsourcing to handle compliance work, too. For example, we have teams ready to help with MTD workflows.

THREE: You need to refine your client list by priority

Every firm has encountered clients that – unfortunately – shout loudest and pay less. This would be easy to handle if we accountants were not hard-working people-pleasers. As such, we can be prone to prioritising disruptive clients when they clamour for attention. The result is a real risk to capacity that doesn’t bring in money.

Instead, the effort goes unrecorded or becomes written off, and your “better” clients get left aside.

Understandably, your more agreeable, better-paying customers will only tolerate being neglected for so long. Eventually they vote with their feet. If you’re lucky, you’ll find out in an exit interview why they left and act accordingly to stop things worsening.

But nobody wants to fine-tune their firm based on lost business. To avoid this, you need actionable data – a “VIP list” of your best clients. However, the larger your firm, the harder it is to manually gather this information. Most practices can only track their jobs and tasks, not every interaction, because they don’t have the right tools. Here’s what else you need to capture:

• Emails picked up.
• Phone calls.
• Overrunning jobs.
• Written off time.

If you don’t have that kind of data, the problem remains hidden (as a sidenote, that’s exactly why we built IRIS Firm Management. It captures the full picture of client activity, so you can see where your time is really going and protect the relationships that matter most).

FOUR: Your firm’s mindset needs to shift to compete

The industry is undergoing massive changes, and decent tech is a prerequisite to success.

Many firms are upgrading their systems. They’re finding ways to move faster, remove bottlenecks, and deliver top-tier services. As a result, what’s exceptional service today might not be tomorrow.

That means if you’re not using the latest technology and assessing what automation and AI can do you’ll lose to competitors.

85% of chartered accountants surveyed are willing to use AI (Source:Ipsos UK survey for Chartered Accountants Worldwide (2,718 respondents, 48 countries)

So, how can we adopt an AI-savvy and automation-focused mindset? That requires a certain amount of letting go of the past. It’s easy to justify a fee by struggling. It feels like work building custom spreadsheets or retyping data. In reality, however, it’s just needless stress.  

I’m a big fan of a football saying: let the ball do the work. You get up the pitch quicker passing the ball than dribbling it yourself. The same applies in practice. If your software can move data, automate a workflow, or surface an answer faster than you can manually, let it. You still did the work. You just did it smarter.

So, encourage that mentality in yourself and others. Park the busywork and spend more time with your clients. Let quality shine. Then, start thinking about how you price your expertise accordingly. That might be for value, not for time.

FIVE: There’s no long-term goal

Every practice needs a clear focus. Without it, you can’t prioritise, and if you can’t prioritise, you can’t direct your capacity where it counts. Growth, advisory, acquisitions – whatever the ambition is – it all needs capacity carved out deliberately. Without a goal shaping those decisions, your team’s time just gets absorbed by whatever lands next .

Unfortunately, many firms don’t have this structure.

Some initiatives feel like targets but are just day-to-day compliance. For example, if your aim this year is to comply with MTD, that’s not really a goal. That’s more of an adjustment to keep your head above water.

Goals, meanwhile, vary in strength. For example, one firm might have a vague goal, such as 10% growth. Another might have something much more concrete – they want to grow from 500 to 1,000 clients in three years. That second goal is much easier to think about and plan for.

Other examples include inorganic growth. For example, you might want to acquire a firm – or be acquired by one. But what type of firm are you focused on, and what is the hoped-for result of such a merger?

Ultimately, your plan should include metrics beyond profit. Success always needs to be measurable, not a tick-box exercise.

Supporting accountancy efficiency in UK firms

Visit our solutions centre to find out more about our software and services. We can help you work fast, track priorities and make the most of your workforce.

Here are three solutions that provide powerful oversight and next-level planning:

IRIS Elements for smaller firms. This is a platform for tax and accounting, with other options for practice management and AML.

IRIS Cloud Accountancy Suite for mid-sized practices is our classic accounting solution, hosted in the cloud. This is a perfect all-rounder solution for growing firms with more complex clients.

IFM Core controls the finances behind your client work. This can help you spot what is wrong with your figures in real-time, at a much deeper level than conventional time and fees solutions.