It’s no secret to most business owners that the U.S. is experiencing a certified public accountant (CPA) crisis. Businesses are having more trouble finding experts to manage their finances, and we’ve even seen cases where accounting firms dropped existing clients. The problem has left many entrepreneurs wondering when the shortage will ease and where to turn in the meantime.
The accountant shortage has been years in the making. Fewer young people are choosing to become CPAs thanks to lower salaries than many comparable careers and a persistent belief that the field is “boring.” Further, a CPA license requires more education than a typical bachelor’s degree. The American Institute of Certified Public Accountants (AICPA) reports that the number of people graduating with accounting degrees has continued to drop in recent years. In 2010, 50,000 people took the CPA exam, while in 2021, only 32,000 did.
At the same time, existing CPAs are leaving the field. AICPA reports that almost 75% of CPAs met retirement age in 2020. While many choose to extend their careers, no one can work indefinitely. The Great Resignation and choice of many baby boomers to retire since the beginning of the pandemic has accelerated the loss of CPAs and rapidly brought the issue to a head.
So, how are businesses adapting? There are no perfect solutions, but a patchwork of accommodations is helping companies stay afloat. As firms must pay more to attract CPA talent, businesses can expect to pay more for their services. Those who can’t afford to — or can’t find any CPAs accepting new business — must adjust their expectations.
As the demand for services grows, more businesses are hiring bookkeepers and junior accountants without their CPA licenses. Many entrepreneurs are also investing in software to automate as much of their accounting as possible. Further, overseas accountants are seeing business from U.S. clients boom. But experts expect the availability of even those workers to dry up soon.
There’s no quick solution to the CPA shortage. So, companies will continue to adapt, and new business solutions will likely enter the market in the following years. We’ll keep you updated on what we learn about how franchisees can adjust to this new environment.
