Many articles in the press have documented the talent shortage in public accounting. The Wall Street Journal headline from October of 2023 says it all: “Why No One’s Going Into Accounting.” While this shortage has been felt most acutely for many years by public accounting firms who are trying to hire staff, it is important to realize that this shortage is also now being felt by businesses and others who use the services of CPA firms. 

Another outcome of the talent shortage is that it comes at a time when the younger baby boomers are seeking to leave the profession. There simply are not enough experienced staff members to take over the ownership and leadership positions that are being vacated. Consolidation of public accounting firms has been occurring at a rapid pace. In early 2025, it was estimated that there were some 85,000 CPA firms in the US, not including solo practitioners. By comparison, in 2015 it is estimated that there were over 90,000 CPA firms.   

How is this talent shortage affecting businesses, individuals, nonprofits, and other entities that are using the services of a CPA firm? Here are some observations that we have made over the past few years:

·      Audits and other assurance services for businesses, nonprofits, government – The talent shortage has caused some firms to exit providing assurance services completely (assurance services are audits, reviews, and compilations of financial statements). There are simply fewer audit firms and fewer auditors. Audit firms have naturally been making choices, opting to work on the assurance projects that make the best use of their limited staff. Audits and other assurance work that is not as profitable, organizations with substandard accounting records, and organizations with payment challenges are much more challenged to find an audit firm that is willing to invest its resources with them. Fees for all types of assurance services have increased as well.

·      Tax work for individuals – the talent shortage is one thing that is limiting the CPAs who do individual income taxes, but the other factor is that the generations that follow the baby boomers are, in general, less willing to work the long and arduous tax season hours that were once a norm in the industry. Fewer hours are being worked fewer returns are being completed. Firms are having to pick and choose which individual tax clients to keep and, as you might imagine, the work that is most likely to be kept is the most profitable work. Almost all firms are increasing the minimum amount that is charged to prepare an individual income tax return. In the Chicago area, it is not uncommon for larger local CPA firms (not just the regional, national or international firms) to have a minimum of $2,000 to $3,000 for an individual income tax return. 

·      Tax work for businesses – similar to the challenges identified above for individual taxes, businesses are also seeing the effects of the talent shortage and limited capacity of CPA firms. Prices are going up and CPA firms are being much more selective about the work that they do. Smaller clients are being let go, as are unprofitable clients and clients who have substandard business accounting records. CPA firms are less and less likely to tolerate slow payments for their services – if it occurs, the client will likely not be invited back the following year.

·      Accounting services for businesses – with limited staff available, CPA firms are going to naturally choose to work on projects that make the best use of their staff’s time. The businesses that continue to be served will be those businesses that take their responsibilities for internal recordkeeping seriously. Increasingly, CPA firms are used to outsource key elements of a client’s accounting process on a monthly or quarterly basis. Without that kind of regular oversight and service during the course of the year, the business’s recordkeeping will quickly deteriorate and become substandard, leading to greater demands on the CPA firm’s staff after the end of the year, when time is the most valuable. 

So those are the problems – what actions can individuals or businesses take in this challenging environment? Here are some things that can be done that will increase the likelihood that an individual’s or business’s relationship with their CPA firm will continue:

1.    Do not provide your information to the CPA firm at the last minute. The days when a client could take advantage of pushing their professional to the very last day of a deadline are going, going, gone. Clients who procrastinate are at the top of the list to jettison as CPA firms struggle to allocate talent to projects.

2.    Be willing to pay on a timely basis for services rendered. A fee or fee range should be understood upfront, so there should be no surprises when it comes to billing. Assuming that there are no mitigating circumstances, do not negotiate for the simple sake of trying to get a discount. Time spent invoicing, negotiating, and collecting are looked at as sunk costs by CPA firms. When choices must be made, a firm will choose not to work with a client who is going to demand more time and energy during the invoicing process.

3.    Be timely, thorough, and accurate in responses to questions posed by your professionals. Delays and inaccuracies cause projects to stretch out beyond the budgeted timeframe and quickly erode profitability for the CPA firm. Provide the documentation that is requested in the manner that is requested – most of the time now, it is expected that documentation will be provided by pdf attachment or secure uploads. 

4.    Businesses need to keep good, contemporaneous accounting records. If the business lacks the internal talent or does not have the time to invest, discuss this with the CPA firm. A solution might be to bring in a 3^rd party to provide basic accounting services, or the CPA firm might be able to offer an internal solution to improve the quality and timeliness of the recordkeeping. Take the suggestions and recommendations made your CPA firm to heart; those suggestions are likely key to keeping your business organized and viable from an accounting perspective.

5.    Businesses should consider engaging their CPA firm to provide monthly or quarterly oversight or supervision of the internal accounting process. Not only do these ongoing services shorten the cycle after the end of the year when a CPA firm’s resources are under the most pressure, but these services have the extra benefit of keeping the CPA firm informed as to the business’ financial successes or challenges, and allows the CPA firm to interact and provide insights to management on a much more timely basis.

6.    Individuals need to also maintain their tax records and documents in an organized fashion, and provide those to the CPA firm in the manner prescribed. CPA firms will have little patience for clients who drop off a box of poorly organized records, or clients who needlessly delay and lengthen the preparation cycle. 

7.    This should go without saying, but treat all of the staff members of the CPA firm with respect, whether dealing with a administrative person, a paraprofessional, or a CPA.

As the managing partner of Dowell Group, our firm is not immune to these macro challenges in the industry. Given the challenge with staffing shortages, we have had to become more selective about the clients we accept and the projects we undertake. Staffing shortages also result in salary escalation, and our fees have increased across the board as well. 

Those challenges notwithstanding, we have always staffed our firm at a level that allows our professionals to put in a reasonable level of extra time in our busiest cycles, but to also have a work-life balance that is critical to clear thinking and quality output and retaining staff. Our staff turnover is well below industry and area averages as a result, and our clients reap the benefits of our stable staffing. To give deeper context to the term "stable staffing," it is key to professional services firms because it means that trained and experienced staff can be counted on to deliver.  Like all CPA firms, we have to be more selective in the projects we accept, but Dowell Group continues to have the capacity to take on good work for good clients, whether it is audit or accounting work for businesses, or tax work for individuals, trusts, and estates.  Because of our staff stability, Dowell Group is uniquely postioned to take advantage of key opportunities as good business clients, individuals, and trusts & estates look for new homes for the CPA services they need.   

I had an experience several years ago with a business prospect that we were just onboarding as a client. At the end of the proposal process, the client turned to me and said, “I want my business to be your best client. What does that mean? It means that my business will do its best to keep quality people involved in my business and to respect the accounting process and the need to maintain good records. It means that we will appreciate the staff who work on our account and treat them with respect. That means that your staff who work on my business will talk so positively about the experience, that the other staff members will hope that they can be assigned to my business someday. It means that Dowell Group will be paid fairly and timely for the work that they do.”

I was a bit surprised by what this new client expressed, but it left an impression. It really is a riff on the Golden Rule, treat others as you wish to be treated. I have never forgotten that encounter, and it definitely has affected how I look at and treat others.  The intended consequence is that by seeking to be my firm’s best client, my firm in turn is providing the best services possible. By the way, that client was not just putting up nice-sounding talking points – many years later, that client continues to be one of our best clients at Dowell Group, year-in and year-out. 

With the challenges that businesses, individuals, and CPA firms are facing together, striving to be the “best client,” which in turn results in the best services from the CPA firm, certainly provides a roadmap on how to navigate a path forward.