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Mastering Labor Challenges Can Drive Growth for CPA Firms

Published

7 months ago

April 10, 2024

Let’s face it, the accounting profession has developed a bad reputation – toiling through long hours chained to a desk, crunching numbers, deciphering archaic tax codes and grinding out tedious tasks, all for lower starting pay and heavy licensing requirements.

The sector is at an inflection point with staffing challenges – one that offers both risk and opportunity. Competitive firms looking to seize that opportunity need to modernize their approach to investing in both technology and staff development to enable professionals at all levels of the firm to elevate how they serve clients and dive into their professional purpose as accountants.

A look at the (frightening) numbers

There are two sides to the talent supply problem – accountants are leaving the profession at alarming rates and new graduates aren’t choosing to study accounting. The number of graduates in the U.S. receiving Bachelor’s and Master’s degrees in accounting has dropped 17% over the past six years to roughly 66,000 in 2022 compared to 80,000 in 2016, according to the AICPA 2023 Trends Report.

Compounding the problem is the increased demand for accountants. The U.S. Bureau of Labor Statistics estimates employment of accountants and auditors to grow by about 4% each year through 2032, with an annual number of job openings expected to be about 126,500. This is mostly driven by those leaving the profession because of retirements, career changes and other reasons. The results are profound: more than 99% of the top CPA firm leaders in the US said they can’t adequately fill their staffing needs domestically.

A new generation of workers

Newly minted graduates also may have different expectations of work than their predecessors. In fact, by 2030 Gen Z will make up 30% of the workforce. Gen Z is the first generation of true digital natives who grew up with smartphones and access to the Internet.

Each generation has its expectations about what professional life should look like and Gen Z is not different. Flexibility and a healthy balance between work and personal life are key with 73% of Gen Z wanting permanent flexible work alternatives. They want to spend less time on monotonous work and instead access the technology, automations, and resources to become a trusted business advisor and make work easier and more fulfilling.

The solution

Changing the industry’s perception isn’t easy, yet firms can leverage technology to adapt to the changing landscape and embrace a new way of working. This evolution in thought will help firms meet recruiting challenges, aid in retention, and drive growth.

Firms don’t often consider technology investments as connected to HR or culture and most view it as a cost that should be kept to a minimum. By investing in technology, firms will increase flexibility, and upskill their staff in meaningful ways – creating an innovative culture in the firm that leads to opportunities for differentiation and success in talent management.

Capitalize on Technology

One significant implication of having less staff is that firms need to do more with less. Investments in software help to modernize the workplace, heighten productivity, and enable firms to stay competitive.

Consider the steps many firms took between completing a tax return for their client and eFiling. Accountants must manually create PDFs from the tax forms and send them via email to their client. The client then prints, signs, scans, and returns the form to the accountant. Once received, the forms need to be filed in a local drive or file share, the status at each step needs to be manually tracked, and only then can the accountant eFile the return.

Technology solves this problem by enabling a same-day turnaround for a process that took multiple days. A firm using an integrated suite (ideally in the cloud) can simply publish the return and consent forms directly to a secure client portal. The client then reviews information and electronically signs the consent form which is filed automatically in the firm’s document repository. Each step is automatically tracked, and sometimes, the return is automatically eFiled. Once filed, a bill is automatically generated and sent electronically to the client who can in turn pay almost immediately. This software is commercially available and hardly ground-breaking, yet many firms haven’t made this basic investment.

Invest in People

Access to technology alone isn’t going to solve the talent drought. When it comes to retaining talent, firms need to reframe their perspective toward professional development. This means building employees’ skillsets through technology and encouraging mentorship opportunities from senior staff. Firms that prioritize education and training are more likely to see increased efficiency and productivity. Establishing a safe environment where newer staff can ask questions of senior staff gives young accountants the chance to grow and more experienced members the chance to give back.

Bottom line: Invest to grow

Rather than viewing the accounting labor shortage as a crisis, I would argue that it represents an opportunity to transform the profession. Investing in technology, creating a culture of development, fostering work-life balance, and promoting collaboration and teamwork will drive firms into the future, where customers are better served and the accounting profession instills passion among its employees.

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Dean Sonderegger is Senior Vice President and General Manager, Canada and Research & Learning of Wolters Kluwer Tax and Accounting North America. He’s responsible for accelerating Wolters Kluwer’s vision and strategy, with a particular focus on the rapid development of advanced digital products and services to enhance customers’ efficiencies and workflow. Previously, Sonderegger served as Senior Vice President and General Manager of Legal Markets Group and Innovation for Wolters Kluwer Legal & Regulatory US.

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RightTool Wins 2024 Accountant Bracket Challenge

Published

7 months ago

April 12, 2024

Business Finance News

QuickBooks automation tool RightTool is the champion of the 2024 Accountant Bracket Challenge, presented by Accounting High, as the 3 seed defeated 1 seed CPA Jason Staats, host of the Jason Daily podcast, by a score of 355 votes to 110 votes in the final.

“To everybody in the RightTool Facebook community and all the RightTool users, all of you came together and helped us get the most votes, so I wanted to thank you guys for being the best community in the industry, in my opinion,” said Hector Garcia, CPA, co-founder of RightTool, during the championship final show, which was streamed by Accounting High on YouTube and LinkedIn earlier this afternoon.

RightTool joins accounting and bookkeeping app Uncat as winners of the ABC Tournament. In the inaugural Accountant Bracket Challenge last year, Uncat defeated Staats 339-190 in the championship match.

“I think what we’ve learned is … machines win,” Staats said about his consecutive losses in the tournament final. “We thought that would be down the road, but it’s happening.”

A grand total of 36,831 votes were cast during the three-week tournament.

“This has been so much fun. It only works if other people participate and pay attention and have fun, so thank you to the 1,806 ‘students’ who participated,” said Scott Scarano, an accounting firm owner who founded Accounting High, a community for forward-thinking accountants.

He added that the tournament will return next year, with some tweaks to make it better.

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Tesla to Launch RoboTaxi on August 8

Published

7 months ago

April 12, 2024

Business Finance News

Dana Hull
Bloomberg News
(TNS)

Tesla Inc. plans to unveil its long-promised robotaxi later this year as the electric carmaker struggles with weak sales and competition from cheap Chinese EVs.

Chief Executive Officer Elon Musk posted Friday on X, his social media site, that Tesla’s robotaxi will be unveiled on Aug. 8.

Shares gained as much as 5.1% in postmarket trading in New York. Tesla’s stock has fallen 34% this year through Friday’s close. Shortly before Musk posted the news about the robotaxi, he lost the title of third-richest person in the works to Mark Zuckerberg, CEO of Meta Platforms Inc.

A fully autonomous vehicle, pitched to investors in 2019, has long been key to Tesla’s lofty valuation. In recent weeks, Tesla has rolled out the latest version of the driver-assistance software that it markets as FSD, or Full Self-Driving, to consumers.

The company has said that its next-generation vehicle platform will include both a cheaper car and a dedicated robotaxi. Though the company has teased both, it has yet to unveil prototypes of either. Musk’s Friday tweet indicates that the robotaxi is taking priority over the cheaper car, though both will be designed on the same platform.

Reuters reported earlier Friday that the carmaker had called off plans for the less-expensive vehicle and was shifting more resources toward trying to bring a robotaxi to market. Musk responded by saying “Reuters is lying,” without offering specifics.

Tesla also produced 46,561 more vehicles than it delivered in the first quarter, which has forced it to slash prices. U.S. consumers have been turning away from more expensive EVs in favor of hybrid models, causing many manufacturers to rethink pushes to electrify their fleets.

Splashy product announcements by Musk have always been a key part of Tesla’s ability to gin up enthusiasm among customers and investors without spending on traditional advertising. They don’t always work: the company unveiled the Cybertruck to enormous fanfare in November 2019, but production was delayed for years and the ramp up of that vehicle has been slow.

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(With assistance from Catherine Larkin.)

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Retail Sales and Wages Grew in March

Published

7 months ago

April 12, 2024

Business Finance News

Retail sales grew at a steady pace in March, according to the CNBC/NRF Retail Monitor, powered by Affinity Solutions, released today by the National Retail Federation.

“As inflation for goods levels off, March’s data demonstrates steady spending by value-focused consumers who continue to benefit from a strong labor market and real wage gains,” NRF President and CEO Matthew Shay said. “In this highly competitive market, retailers are having to keep prices as low as possible to meet the demand of consumers looking to stretch their family budgets.”

Total retail sales, excluding automobiles and gasoline, were up 0.36% seasonally adjusted month over month and up 2.72% unadjusted year over year in March, according to the Retail Monitor. That compared with increases of 0.4% month over month and 2.7% year over year in February, based on the first 28 days in February.

The Retail Monitor calculation of core retail sales – excluding restaurants in addition to automobiles and gasoline – was up 0.23% month over month and up 2.92% year over year in March. That compared with increases of 0.27% month over month and 2.99% year over year in February, based on the first 28 days in February.

For the first quarter, total retail sales were up 2.65% year over year and core sales were up 3.12%.

This is the sixth month that the Retail Monitor, which was launched in November, has provided data on monthly retail sales. Unlike survey-based numbers collected by the Census Bureau, the Retail Monitor uses actual, anonymized credit and debit card purchase data compiled by Affinity Solutions and does not need to be revised monthly or annually.

March sales were up in six out of nine retail categories on a yearly basis, led by online sales, sporting goods stores and health and personal care stores, and up in five categories on a monthly basis. Specifics from key sectors include:

Online and other non-store sales were up 2.48% month over month seasonally adjusted and up 15.47% year over year unadjusted.
Sporting goods, hobby, music and book stores were up 0.86% month over month seasonally adjusted and up 8.33% year over year unadjusted.
Health and personal care stores were up 0.03% month over month seasonally adjusted and up 4.5% year over year unadjusted.
Grocery and beverage stores were up 1.17% month over month and up 4.22% year over year unadjusted.
General merchandise stores were up 0.13% month over month seasonally adjusted and up 3.38% year over year unadjusted.
Clothing and accessories stores were down 0.01% month over month and up 2.13% year over year unadjusted.
Building and garden supply stores were down 2.13% month over month and down 3.97% year over year unadjusted.
Furniture and home furnishings stores were down 1.46% month over month seasonally adjusted and down 5.28% year over year unadjusted.
Electronics and appliance stores were down 2.27% month over month seasonally adjusted and down 5.92% year over year unadjusted.

To learn more, visit nrf.com/nrf/cnbc-retail-monitor.

As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.