The shortage of talent in the CPA industry is not surprising news to anyone who has been in the industry for very long. Fewer and fewer accounting majors are pursuing the CPA path in favor of career paths in other fields such as technology. When faced with this dilemma, CPA practices have two options; adapt and evolve to attract and retain talent or do nothing and fall behind.
People are the most important part of any CPA practice, whether it be employees or clients. Both of these groups are negatively affected by the shortage of qualified CPAs entering the workforce. So, what solutions are available to help current staff who are overwhelmed with heavy workloads and clients who face longer wait times?
Many CPA practice owners have found that technology implementation has lessened the strain on their practices. The goal is not to replace current staff, but to enable them to be more productive while enjoying a better work-life balance. The data supports the benefits of technology for even smaller practices. The 2024 Accounting Firm Technology Survey found that practices using connected, cloud-based accounting technology earn 39% more revenue per employee.
One of the biggest benefits offered by technology is the amount of time it can save. When you and your team automate previously time-consuming tasks, you can use more of your day to focus on higher-value work. That can lead to substantial increases in margins. In addition, you’ll be able to respond to client requests more quickly, while improving your operating efficiency ratio. The American Institute of Certified Public Accountants (AICPA) offers many resources focused on automation for the industry.
Automation also improves your ability to make decisions and issue recommendations to clients. Using technology to leverage and analyze today's wealth of data can improve both your access to insight and your confidence in applying that insight to client needs. That makes you a more valuable strategic partner as your clients pursue growth opportunities.
There are several types of technology that can help CPAs master heavy workloads and increase efficiency. Artificial Intelligence (AI) can handle complex tasks like anomaly detection in financial data, fraud identification, and even generating basic reports. Machine learning can automate routine processes and improve decision-making. Cloud-based accounting platforms allow for real-time data access and collaboration, making it easier for geographically dispersed teams to work together. This can be especially helpful for attracting remote talent.
Implementing any significant change in your firm can lead to resistance from employees and clients. However, there are steps you can take to mitigate the resistance and help ensure smooth adoption of the technology. The most important key is communication. Clearly share the reasons for adopting the technology, the expected benefits, and how it aligns with the practice’s long-term goals. If you can help your team and clients understand that the technology will help relieve their challenges caused by the talent shortage, they will be more likely to accept the changes.
The second key to navigating the change is managing the productivity dip. Equipping your team with new technology is a smart move, but the initial learning curve can lead to a dip in productivity. Here's how you can navigate this period and ensure a smooth transition:
By implementing these strategies, CPAs can successfully navigate the learning curve associated with new technology, minimizing the impact on productivity while setting the stage for future success. The initial investment in training will be offset by the long-term gains in efficiency, accuracy, and client satisfaction.
Accounting professionals have long faced the dilemma of whether to invest in innovations, whether that was new adding machines for clerks a century ago or bringing AI capabilities to today's practices. However, a tech-driven approach offers numerous advantages: automation streamlines workflows, reducing errors and boosting productivity, allowing CPAs to focus on understanding client needs and providing tailored advice. Additionally, a tech-savvy workplace attracts and retains top talent, particularly millennials and Gen Z who are accustomed to using technology in their work. By continuing to adapt your practice to changes in automation, you'll protect client relationships and their most important assets.
By strategically using technology, CPAs can not only navigate the talent shortage but also create a thriving, future-proof practice. Embrace the change, leverage the power of tech, and watch your firm rise to new heights.
Disclaimer: Please note, Oak Street Funding does not provide legal or tax advice. This blog is for informational purposes only. It is not a statement of fact or recommendation, does not constitute an offer for a loan, professional or legal or tax advice or legal opinion and should not be used as a substitute for obtaining valuation services or professional, legal or tax advice.