5 Biggest Accounting Challenges for Accounting Firms in 2024

Recently updated on July 31st, 2024 at 05:24 am

We have ushered in 2024 with caution and measured optimism, well aware of the accounting challenges that lie ahead.

“Every day in life there are challenges; whether you’re an accountant, a race car driver or whatever you do.” – Justin Allgaier

Accounting challenges continue to snowball. Keeping up with the constantly evolving accounting landscape imposes significant concerns. Moreover, the pressing demand for accountants is growing and constantly exposing challenges of delivering accurate and reliable financial insights to the clients.

Having said this, here’re the top five challenges that accounting firms face today and need to vouch for ways to overcome and excel in 2024.

Top 5 Challenges That Accountants Face Today

1. Shrinking Supply of Seasoned Staff

I believe that one of the biggest challenges is the decreasing number of candidates seeking to become CPAs
— Ken Bishop, president and CEO, National Association of State Boards of Accountancy

What’s happening in the accounting world? It’s not great, but a souring reality. Accounting firms are constantly struggling to hire talented staffs. In 2021, there was a 17% drop in employed accountants and auditors according to a Bloomberg Tax Analysis.

Moreover, between 2021 and 2031, on average, about 136,400 openings for accountants and auditors are projected each year, according to the U.S. Bureau of Labor Statistics’s (BLS) occupational outlook handbook.

With fewer entrants, high attrition rate, and growing demand, staffing shortage and talent crunch is significantly high. Thanks to increasing resignation due to low morale and early retirement, the remaining accountants need to work for long hours leading to fatigue and eventually causing burnout and inefficiency.

2. Not Having Enough Bandwidth

Bandwidth bottlenecks are not new for accounting firms, especially for small & medium size businesses.

As you know, accountants have to handle work meticulously. They need to find ways to increase output without sacrificing quality and accuracy. The obvious solution is hiring qualified team members to help scale your accounting practice. However, the war of talented staff is a burning issue. Accounting firms struggle in finding seasoned staff and accessing expertise, despite investments on hiring, training, and infrastructure.

Also, the workload is not consistent. During the peak tax season, there’s a sudden uptick in the workload, and post peak, workload drops. Hence, newly hired accountants become redundant, adding to the resource cost.

3. Tough to Secure or Retain Top Talent

“The talent drain”, especially in advisory is extremely concerning. Advisory consists of individuals with unique and deep skill sets. These individuals are in short supply and high demand. This continues to create obstacles as firms continue to build out and expand advisory practices”

— Jim Bourke, managing director, advisory services, Withum Smith + Brown

Accountants are leaving jobs in record numbers. Securing the Next Gen of accountants won’t be a piece of cake. So, why is employee turnover in accounting industry so high?

Well, the major reasons of the Great Resignation are growing pressure and disturbed work-life, resulting in burnout. Accounting firms have to balance getting efficient work from the staff while creating positive work environment and minimizing the burden to retain top talent.

Now, accounting firms are offering stay bonuses, record raises, promotions, and other perks to secure seasoned staff, which increases operational overheads. They are going above and beyond their financial budget to hold and retain top talent.

According to Deloitte, 82% of big employers are saying that they are struggling in finding finance talent.

4. Keep Up with Constant Transformation

“We live in an age of disruptive technology and breakthrough innovation practices. Instead of shying away from these newfangled force multipliers, we should embrace them as opportunities to add value for our clients. The enhanced interconnectivity of our services will enable us to take a multidisciplinary approach and deliver a full spectrum of client solutions.”

– Mr Frankie Chia, Managing Partner & International Liaison Partner, BDO LLP

The constant transformation in accounting practices leads to substantial pressure on the accounting firms to keep pace with emerging market standards. After all, if you miss, you will be out of the race. And for keeping up and staying ahead of the innovation curve, you require staff with particular skill sets.

Of course, many accounting firms struggle in finding new talent having the right set of skills. Also, it impacts your operational overheads. On the other hand, upskilling your existing workforce shifts their focus from billable work and core business objectives.

5. Provide Value Beyond Compliance

It goes without saying that accounting firms strive to take their clients’ business to the next level. For this, they need to build powerful advisory capabilities to provide value beyond compliance and traditional accounting. This may include effectively analyzing data, monitoring trends, recognizing opportunities & improving business performance.

It’s only possible when you simplify and automate mundane, time-consuming accounting tasks, freeing your core team to refocus on high-value advisory tasks, and thereby providing the value that your clients are looking for.

So how long will accountants be in this situation? Will things settle down or challenges of accountants continue? Well … yes, simplify and automate redundant accounting tasks with PathQuest Scale.

PathQuest Scale supplements accountants so that you overcome the pressing challenges. It helps take your accounting practices to the next level.

Moreover, you get end-to-end accounting solutions to boost business performance and gain better control. All in all, PathQuest Scale empowers accounting firms with advisory capabilities to make a real difference. To resolve your accounting challenges, contact us.

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Published on: 13 January 2023

Author

John Bugh

John Bugh is Chief Revenue Officer for PathQuest, responsible for the strategic direction, planning, vision, growth, and performance of the company’s marketing, branding, and revenue streams.

As a seasoned professional with over 35 years of experience in executive sales, marketing, and operational leadership, John has worked to build high-performing leadership-teams that have a demonstrated track record of accelerating growth, increasing revenue, establishing sustainability, and improving profitability.

He is an avid life-long fan of the NY Yankees and loves to snow ski with his family whenever he has the opportunity!