The Strategic Advantages of Outsourced Accounting Services

The accounting profession is at a critical juncture. If you’ve noticed a decline in qualified candidates or CPAs applying for open positions at your company, you’re not alone. Accounting careers have experienced a steady downward trend for the past several years as evidenced by:

• A 33% drop in first-time CPA candidates from 2016 to 2021
• The lowest amount of CPA test takers in 2022 since 2006

Several factors are leading to a shortage of qualified professionals. This talent gap presents a significant challenge for organizations, jeopardizing their ability to manage financial operations and run back-office accounting functions.

The Declining Accounting Workforce: Understanding the Current Trends

The accounting profession, once considered a stable and reliable career path, faces a relatively new shift: a declining workforce. The decline may be occurring due to a few reasons.

Significant Education Requirements

First, the industry sees the 150-hour requirement for the CPA license as a barrier to entry. Potential applicants weigh the opportunity cost of the additional time and financial investment to acquire the extra hours required. Many candidates are deterred by the prospect of taking on student loans or delaying their entry into the workforce.

Salary Disparity

In addition, accounting roles trail other finance and technology jobs in salary. This creates a perception that accounting careers are less lucrative, despite the valuable skillset accountants provide. When graduates see potentially higher starting salaries and more flexibility in other fields, accounting might lose its appeal.

Work-Life Balance Concerns

Accountants have a reputation for long hours and demanding deadlines. This work-life imbalance can deter younger generations who prioritize a healthy balance between work and personal life. Other fields might offer more flexible schedules or remote work options, which appeal to potential recruits.

A combination of these three factors has more potential accountants shifting their majors and career focus.

How the Accounting Talent Gap Impacts Organizations

Companies of all sizes need to investigate and understand this trend. The decline of accounting professionals has critical business impacts and knowledge of this pattern will ensure your company can better prepare for your future accounting team hiring needs.

With roughly 75% of all American Institute of Certified Public Accountants (AICPA) members close to retirement age, the candidate pool for qualified accountants is reducing. Because of the decline in accounting talent, organizations must prepare for challenges during the hiring process such as:

• Positions take longer to fill: Whether you currently have high turnover rates or not, you must be aware that filling accounting positions could take longer than anticipated and be costly.
• A rise in compensation and training needs: You may need to increase your salary to entice skilled accountants/CPAs to apply to your company. Additionally, you can expect to invest in robust training for a candidate who isn’t at the desired skill or experience level.
• Delayed hiring leads to increased workload: You may also find that it takes time to find the right fit for the team. The time between a departure and a new hire could burden other current team members to complete the extra work, increasing the chance of burnout.

There are many reasons to be aware of this issue so that you can adequately prepare for a potential departure or expansion of the accounting department.

Solutions to the Shortage of Accounting Staff

The current accounting talent shortage presents a challenge for many organizations. Filling open positions can be time-consuming and expensive, and relying solely on external recruitment might not be the most effective long-term strategy. Fortunately, there are several solutions to consider for this ongoing challenge:

1. Invest in your people: One solution to this issue is to invest in your current accounting team to ensure employee retention. By prioritizing employee satisfaction, you can build a positive work environment that encourages your existing accounting team to stay.
2. Automate processes with technology: Alternatively, companies can look to technology to help reduce day-to-day activities and increase efficiency. Increased effectiveness allows your team to accomplish more with the same resources, potentially reducing the need for additional accountant headcount.
3. Partner with an Outsourced Accounting Solutions (OAS) provider: A third solution is securing accounting support from a third-party, such as an OAS group. OAS providers offer access to a pool of experienced accounting professionals who can handle specific tasks or your entire accounting function.

Each of these solutions comes with its own challenges; however, choosing outside help eliminates employee retention and technology concerns.

Why Outsource Accounting Services?

By partnering with an OAS group, companies can gain several advantages:

• Reduced turnover risk: Outsourced accounting services lessen the impact of untimely turnover within your company. Turnover can happen for many reasons and negatively impact a team. Using outsourced accounting services takes that burden off the company and puts it on the accounting group to ensure consistent accounting coverage.
• Access to technology and expertise: OAS providers often invest in the latest accounting software and technologies. They offer guidance and expertise on what tools suit your needs, saving you time and money on research and implementation.
• Highly skilled accountants: Finding skilled accountants with relevant industry experience is challenging. An OAS group that specializes in a multitude of industries can aid in the core accounting, accounting processes/controls, and high-level Chief Financial Officer (CFO) guidance. They ensure quality work tailored to the nuances of your industry.

How Wolf Can Help

As we monitor this downward trend of new accountants and CPAs along with the issues it presents to companies, Wolf & Company offers comprehensive outsourced accounting services. No matter your accounting gaps, whether they involve core accounting, compliance, or advisory needs, the Outsourced Accounting Solutions team at Wolf can help. Our expert CPAs will provide you with the highly skilled accounting work necessary for your company to succeed – contact our team to get started.