The accounting sector within the U.S. is facing a shortage of professionals to handle the work, a growing frustration among many businesses who rely on accounting services, and a growing hope within the profession that technology can help alleviate the staffing problems it is facing.
In Search of Tomorrow”™s Accountants
The Association of International Certified Professional Accountants (AICPA), the professional association for the industry, has acknowledged a talent shortage in this sector and called on the reinstatement of CPA exam credits that expired since Jan. 1, 2020.
Pandemic restrictions forced the April 2020 closure of CPA Exam sites operated by Prometric, a leading provider of technology-enabled testing and assessment solutions sites. While this was happening, many universities and colleges switched their in-person instruction to online courses. While state boards of accountancy granted many CPA candidates credit extensions on the 18-month period in which candidates must complete all four parts of the CPA Exam, the total number of U.S. candidates passing their fourth and final section of the CPA Exam dipped in 2020 to below 20,000 for the first time since 2007.
“Covid was an unprecedented event that struck at a time when many professions, including accounting, were already encountering talent shortages,” said AICPA CEO of Public Accounting Sue Coffey. “Strengthening the CPA pipeline and rebuilding from disruption requires a comprehensive, collaborative effort. Consideration of this credit restoration for candidates who were on the path to CPA licensure is one important step.”
The AICPA noted that the National Association of State Boards of Accountancy (NASBA) was establishing a task force to consider a proposed reinstatement of CPA exam credits. Any proposal would need to be reviewed and considered for adoption by each state board of accountancy.
“A proposal like this could allow for the reinstatement of credit for more than 15,000 CPA candidates and re-open the door for those candidates to complete their journeys to becoming licensed CPAs,” Coffey added. “I applaud NASBA for raising this possibility and exploring it with state boards of accountancy, since a comprehensive reinstatement effort could help offset hurdles to advancement that many CPA candidates faced due to circumstances outside their control.”
Clients Getting Crunched
A new influx of accountants is being sought by businesses that rely on this profession. The newly published Capterra Accounting Shortage Survey of nearly 300 business leaders found that 64% of businesses struggled to find accounting firms to support them for this year”™s tax season. A majority (71%) of businesses outsource accounting work and 65% of them require full-time support to handle their taxes.
However, rising costs (50%) and an inability to support requests (31%) are among the top challenges for organizations using outside firms. With 93% of businesses experiencing accounting delays, over half (52%) of them have relied on software to help automate functions ”“ and 58% of business leaders planned to spend more than $10,000 on new accounting software in the next year.
“America’s accounting shortage has been plaguing accounting firms in the last few years,” says Max Lillard, senior finance analyst at Capterra, an online marketplace vendor serving as an intermediary between buyers and technology vendors within the software industry. “As talent retires and the pipeline of fresh accountants dwindles, firms have struggled to provide the services businesses need to meet their financial needs. Despite the shortage, outsourced assistance is in high demand, and companies are weighing their options with software investments and overseas work.”
A High-Tech Impact
Perhaps the answer to the accountant shortage could be found in technology?
According to the recently published Intuit QuickBooks Accountant Technology Survey, 85% of accountants predicting that technology create new interest in this career by making the work more engaging. U.S. accountants predicted they will spend an average of $15,800 on technology improvements and upgrades over the next 12 months. Nearly half of the 2,000 accountants polled for the survey said they expected to invest in and adopt automation tools (48%), artificial intelligence (AI) (48%), and blockchain technology (47%) during the next 12 months.
Current accountants have already seen a change in their duties based on technology ”“ 81% stated technology helped free their time to enable a more advisory role with their clients and a nearly identical share (80%) reported increased face-to-face time with clients thanks to technology.
As a result of this shift, 86% of accountants predicted technology will be the driving force behind expanded business. The primary benefit of accounting technology was identified as boosting revenue due to efficiency gains (41%), followed by increasing income streams (36%). Looking into the near future, the accountant respondents forecasted improved operations by using technology to better predict future business performance (38%) and understand real-time business performance (38%).
But despite the benefits cited in technology, nearly one-third of accountants (31%) said that ensuring accuracy was their biggest concern with technology. This comes as more than three in five accountants stated their clients sought increased assistance with financial management (67%), filing taxes (62%), managing staffing costs (62%), and financial forecasting (65%) during the past two years.
Intuit QuickBooks conducted its survey in January, half of respondents (54%) identifying as either employees or the owners of an accounting firm and nearly half of respondents (46%) being employed by a non-accounting business as an in-house accountant.
