The U.S. is facing a nationwide shortage of accountants—forcing some firms to turn away clients or go offshore to complete entry-level assignments.
- Some 300,000 accountants have quit their jobs in the past two to three years, and it is hitting firms hardest during the leadup to this tax season, The Wall Street Journal reports.
- With burnout and stress hollowing up the business, the remaining accounts in the U.S. have even higher expectations and demands placed on them—but they cannot keep up with the demand.
- Third-party contractors have begun negotiating between U.S. firms and offices in India, South Africa, and the Philippines to provide entry-level accounting work to take some of the load off of U.S. accountants.
- “[They] can pretty much do 90% to 95% of an audit. Not only are our guys going to do good work, but they are also probably going to outperform what your full-time employees are doing.” Makoshi CEO Darren Isaacs told The Journal.
Why It’s Important
The effects of the “great resignation” have hit accounting firms in the years since the beginning of the COVID-19 pandemic. Unfortunately, many firms don’t see an end to this employee shortage, saying it is unlikely to go away for the foreseeable future.
“For us to have the same number of accountants in the future, just five years from now, as we do right now is very unlikely,” New York State Society of Certified Public Accountants CEO Calvin Harris Jr. told The Journal.
This leaves firms with the choice of having to choose how to move forward. The limitations have forced some accounting firms to scale back their available services or charge exorbitant prices radically. Many are turning down new clients and falling back into consistent and dependable ones. One firm in Oklahoma used to charge $3,000 for non-profit audits but raised the price to $10,000 before turning down new offers. A rival firm is currently charging $15,000 for non-profit audits.
Abroms and Associates is a Florence, Alabama-based firm that has refused to outsource work accountants outside of the U.S., but the cost of that has meant losing clients. He told The Wall Street Journal that he’d lost $430,000 in revenues in the past three years and fears that his remaining staff is overworked and may leave. “[It] breaks my heart. It’s all we can do to keep up with our really good clients right now.”