It’s no secret that the tax and accounting industry is dealing with a shortage of accountants and tax professionals. Finding qualified staff has been a shared struggle for firms of all sizes in recent years.
The reality is that more tax professionals are exiting the profession than entering it. The number of unique candidates taking the CPA exam has plummeted by one-third since 2016, according to the American Institute of CPAs (AICPA) 2021 Trends report.
Despite these challenging circumstances, firms are finding ways to adapt. Advancements in technology have made it possible to replace time-consuming tasks with automation and Artificial Intelligence (AI). Outsource options have expanded and flexible work models have transformed the labor market.
Your firm can combat staffing constraints with these three proven strategies.
3 proven strategies to overcome the accounting labor shortage
3. Expand your hiring search and stay competitive with remote/hybrid options
Remote and hybrid work are still growing rapidly. In December 2021, Ladders predicted that 25% of all professional jobs in North America would be remote by the end of 2022. That number hit 23% at the end of the first quarter. Experienced professionals are targeting this flexibility in their job search, and employers are listening.
The success of remote work has reimagined how corporate work gets done, as well as where the work takes place.PricewaterhouseCoopers (PwC) US Remote Work SurveyJanuary 2021
The pandemic may have been the catalyst, but the continued popularity of remote work is proof of its success. Only 6% of employers and employees considered their shift to remote work unsuccessful, according to the January 2021 survey by PwC. Remote options are no longer about adapting to circumstances, but about staying competitive in the hiring market.
Remote options also widen your talent pool beyond the local office. Expanding your search to include candidates from all over the country increases your chances of finding the right hire.
2. Outsource preparation to third-party professionals
Instead of adding full-time employees, many firms are finding it more cost effective to contract third parties for assistance. In recent years, the market for outsourced preparation services has expanded to combat the growing shortage of in-house accountants. “Partial outsourcing,” where third-party vendors handle the busywork and pass skilled labor to in-house employees, has also grown in popularity.
Ernie Villany, Founder and Head CPA of Boulder Valley CPAs, shared his firm’s outsourcing story with CPA Practice Advisor in February 2022. With a significant staffing shortage and busy season approaching, Ernie quickly embraced outsourcing as one solution to continue meeting his clients’ expectations.
I onboarded a new partner in April and gained access to a 450+ person team who could manage the 70% of our workload that consisted of repetitive tasks such as data entry and the proper preparation of form submissions. I quickly found that this overseas team performed this type of work flawlessly.Ernie Villany, CPA Practice Advisor, February 2022
Outsource vendors prepare returns as an extension of your firm. They use the same tax software and follow any special notes or instructions you provide. Their team will collaborate back and forth on each return until your firm is ready to sign off on review.
Since outsourcing demand is on the rise, many service providers fill their capacity months ahead of the deadline. If your firm is considering outsourcing, it’s important to research and contact vendors far in advance.
See how two of the industry’s most popular outsource vendors compare.
1. Automate data entry and workpaper organization
The most effective antidote to the accounting labor shortage is automation. When there is less to do, you need less peoplepower, and software will always cost less than salaries.
Scan-and-populate solutions automatically extract data from standard documents and populate it into your tax software. Most products also bookmark and organize tax workpapers into a standardized index. Advances in AI are making these solutions more accurate than humans. With less labor involved in your 1040 workflow, your firm can process more returns without adding staff.
The quality of a scan-and-populate solution depends on how many documents and fields it automates. SurePrep’s 1040SCAN recognizes 4–7 times as many document types as the alternatives, making it the most productive 1040 automation on the market. It’s also the only solution that uses AI to auto-verify OCR data.
Review 1040SCAN’s full document coverage list to gauge how much manual entry your firm could automate.
The shortage in accounting talent means it’s critical to retain staff
Even if your firm isn’t looking to add staff, the industrywide accountant shortage makes it equally important to keep the accountants you currently have. Peak season burnout is part of the reason why many tax professionals are leaving the profession. No one chose a career path in accounting to work overtime inputting data. Unskilled labor is as demoralizing as it is time-consuming. The time spent on manual data entry and binder organization could be spent concentrating on skill-based work.
One added benefit of modernizing your 1040 workflow is that top talent will be more inclined to join and stay at your firm. What does your firm’s current workflow look like? Are your accountants stressed? Leveraging automation, outsourcing, and remote/hybrid work can improve your chances of keeping your team for years to come.