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American taxpayers had to pay, on average, at least 20% more in taxes last year, and accountants aren’t happy about it either.
The average amount tax professionals charged new clients in 2023 was $218, up 25% from $174 in 2021, the National Association of Tax Professionals found in its 2023 Tax Report. did. Tax professionals also increased the fee for repeat customers to $205, a 22.7% increase from $167 two years ago. This is based on the most common fee structure, where clients are charged a minimum fee plus a fee depending on the complexity of the return.
Experts blame the double-digit price increase on an industry-wide PR crisis. Companies have to raise prices because they can’t find enough staff to work, and because many college students still believe that accountants sit in dark basements typing numbers into calculators. Because they can’t find staff.
read more: Tax credits and deductions: What’s the difference? Which one is better?
Mike Gillis, CPA and CEO of North Carolina-based accounting firm DMJPS, said, “Unfortunately, we as accountants have a hard time shaking off the reputation of being bad at crunching numbers.” I don’t think it’s possible,” he told Yahoo Finance. “It makes me feel a little sad because I know it’s been a great career.”
“I hope more young professionals understand.” [accounting] There are a lot of opportunities and it’s financially advantageous as it competes for students against other really cool careers like data analysis and software engineering (which have a bit more of a cool factor). ”
Feelings of inadequacy damage perception
According to the AICPA’s 2023 Trends Report, the total number of candidates earning bachelor’s degrees in accounting will decline by 7.8% from 2021 to 2022, after steadily declining by 1% to 3% annually since 2015. did. It also shows that the number of new CPA candidates in 2022 has fallen to 30,251, the lowest in 16 years.
“The number of students going on to major in accounting is decreasing. [the students] There are 10 job openings available. So there’s a lot of competition for them,” Gillis said of his company’s recruitment challenges.
The shrinking talent pipeline is impacting accounting firms across the board. According to a survey by Alliant Talent, a professional services firm that addresses the shortage of certified public accountants, more than 99% of top leaders at domestic certified public accounting firms say they are unable to find suitable talent domestically.
Meanwhile, demand for accountants is “going through the roof,” Jim Brady, CEO of alliantTALENT, told Yahoo Finance.
“Since the ’80s, the United States has had four decades of incredible economic growth,” Brady said. Expert. ”
Gillis agreed. “Our internal growth rate was about 13% last year, and we could grow much faster if we had the people in place.”
One of the main reasons is the perception of accounting and other business majors, Brady explained. Accounting jobs often lose out in attractiveness when competing with careers such as private equity investing, investment banking, and management consulting.
“It’s a really great career to compete with in the accounting profession,” Brady said.
Experienced accountants also left the field. According to data from the U.S. Bureau of Labor Statistics, 312,000 accountants and auditors left their jobs between 2019 and 2022, a decline of 16%. To combat this, accounting firms are raising salaries, offering bonuses like Deloitte’s $20,000 to $35,000 retention allowance, and adding benefits to attract and retain talent. are doing.
“We now have complete flexibility in our working hours,” Gillis said. “You can pretty much set the hours you want, and you can even work remotely. We’re just doing everything we can to be flexible and make people feel like it’s a comfortable career.”
The cost of these additional benefits has increased customer fees. Still, the demand for accounting jobs continues to outstrip the supply of talent. Gillis’ company is not currently negotiating fees.
“As salaries have increased, so have fees,” Gillis said. “If a client is not satisfied with our rates, that means they are not a good fit for us. We do not engage in negotiation or disputes over rates because that is the way it is.”
read more: What is taxable income?
Shift to foreign employees
To alleviate recruitment challenges, many small and medium-sized accounting firms are joining what many large firms have already been doing for years: partnering with overseas offices for U.S. operations. It is said that
More than three-quarters of all companies surveyed by alliantTALENT reported that they are considering, planning to hire, or already have foreign employees. This trend continues with large companies like Deloitte, a Big Four accounting firm, expected to employ more than 76,000 workers in India (known as the Deloitte USI workforce) out of 200,000 employees in the US by 2022. ) was hired.
However, the new practice is different from outsourcing, Brady noted.
Brady hires at all levels, from junior staff to senior managers and partners, to build out its international offices. “We do some of the most complex work that CPA firms do for their clients, including derivative accounting, business combinations, and going concern uncertainty. It’s part of an accounting firm,” Brady said.
“This is the first year we’re doing this,” Gillis said. “A lot of companies are already doing that, and we’re doing it. We’re going to have five full-time employees overseas.”
Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).
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