How do professions die? By having more people exiting the field than joining it.
Sometimes shrinking or dying fields are a positive sign of innovation – but other times, they’re a looming threat.
Accounting has taken an especially hard hit over the past decade… so what does that mean for small business owners? After all, accountants are critical to the success of a growing business. Let’s talk about it!
At CSI Accounting & Payroll, we’ve worked with small business accounting for nearly 60 years. We’ve witnessed the industry’s changes firsthand over the past few decades, so we can address these questions:
- Why is there a shortage of accountants?
- How does the shortage hurt businesses?
- How does CSI adapt to this shortage?
3 Reasons for the Accountant Shortage
For the past several decades (until recently), the accounting industry has been on a pedestal for job-seekers. After all, it used to mean steady work and a good paycheck. What’s changed?
This article from the Wall Street Journal shows the American Institute of CPAs’ data, citing that the number of U.S. accounting graduates dropped 7.4% in the 2021 to 2022 year, the largest drop in a single year since 1994 to 1995.
There are three main reasons for the accountant shortage:
- Stagnant salaries
- Lack of excitement
- Overworked accountants
1.) Stagnant Salaries
Industry-wide, salaries for accountants haven’t been growing at the rate they should be. A big reason for this is the increasing push to outsource cheaper bookkeeping overseas – which can have a lot of issues.
Fortunately, not every employer has fallen behind on proper pay and benefits – and some don’t offshore their services.
2.) Lack of Excitement
Accounting has a reputation for being mundane. Some people enjoy analyzing numbers, but not many.
The younger generation favors either mundane roles with very high salaries or exciting roles regardless of salary. We can’t blame them!
3.) Overworked Accountants
As older accountants retire and fewer younger ones emerge, the shortage of accountants becomes worse and worse. Some accountants see fewer accountants as a good thing – a competitive advantage. They can get better jobs, right? Not if they’re overworked.
Fewer accountants mean existing accountants can have more work on their plates. In extreme cases, this can cause them to change careers or even retire earlier.
3 Ways the Shortage Hurts Businesses
If you’re a newer small business, you may wonder what the big deal is. You can do your own accounting – at least until you really start to grow!
Here are the three main ways that the accountant shortage will hurt businesses:
- Prices will be driven up.
- Software can’t do it all.
- You may get lower-quality service.
1.) Price Increases
Don’t mistake this with typical inflation! When demand exceeds supply, prices get driven up.
All accounting services – regardless of quality – will go up in price as the number of accountants continues to decrease. (Yes, that even includes cheaper, outsourced overseas assistance. It’s white labeled, and the savings are absorbed by the business instead of passed to the client.)
2.) Software Shortfalls
Can’t find a good accountant who’s taking on new clients? Here’s an alternative: You can always keep using big-name software to do your own bookkeeping and taxes as your business grows.
However, if you’re not using it properly, it can be significantly more costly and difficult than it’s worth.
Plus, even if used correctly, you don’t get the analysis and advice that an accountant can offer!
3.) Lower-Quality Service
Not interested in doing your own accounting with software? That makes sense! After all, software has plenty of shortfalls and can take up a lot of your time. Here’s a different solution: Use lower-quality accounting firms that are taking on new clients.
They take on new clients because they have trouble retaining their current ones. Firms like this will often have poor culture, pay, and benefits, leading to worse service for you.
How CSI Adapts and Avoids the Accountant Shortage
Did you know that CSI Accounting & Payroll is always accepting new clients?
This is possible because we limit our client base to our specialty (instead of taking on a bunch of personal taxes), so we have more time to focus on our business clients. We also use tech advances to add to our service instead of trying to use them to replace accountants. Most importantly, we treat our staff well, reducing turnover and keeping our output consistent.
All of these things mean that we can always accept new clients while still ensuring a high-quality service.
No Accountant Shortage Here!
Now that you know why there’s an accountant shortage, how it hurts small businesses, and how we adapt to the shortage, are you ready to check out our monthly accounting services?
To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with CSI by clicking the image below:
