In the fast-paced world of finance and accounting, Certified Public Accountants (CPAs) and accounting firms often face a significant capacity challenge. With increased complexity in financial regulations, ever-changing tax laws, and growing client demands, firms find it challenging to balance their existing workload while keeping up with the constant flow of new clients.
Before collaborating with FInsmart Accounting, Rebecca Santiago, the co-founder of an accounting firm in South Florida, was in the toughest situation due to accountant shortages and was unable to find anybody to support clients with services such as annual business audits and preparing tax returns.
“I think the biggest challenge that we faced recently is much the same as a lot of businesses have been which is finding talent that is willing to show up to work, show up after you hire them or are willing to accept a compensation that is realistic for their skill set and what we’re trying to offer for our clients” she said.
She is not alone, according to AICPA’s 2022 PCPS CPA firm top issues survey, “Finding qualified staff (at all levels)” remains the top 5 concerts for all CPA firms irrespective of size of the firm.
In this article Finsmart Accounting – trusted by hundreds of CPAs for finance and accounting outsourcing – will explore the capacity challenge faced by US CPA and accounting firms and provide actionable strategies to overcome it successfully.
Understanding the Capacity Challenge
The capacity challenge arises when accounting firms find themselves struggling to manage their existing clients effectively and efficiently while acquiring new clients. Factors contributing to this challenge include:
- Clean up Jobs : When a firm signs up a new client most times that have to do a Clean Up Job of books of accounts for multiple years. This takes away lot of bandwidth of the existing bookkeeping staff affecting the existing bookkeeping client engagements
- Seasonal Peaks: Tax seasons, financial reporting deadlines, and regulatory compliance periods lead to a surge in workload, demanding additional resources and manpower. Most firms crumble in pressure which affects the performance of existing staff and at times you have an attrition and staff leaving you when you need them the most.
- Skills Gap: The rapidly evolving financial and accounting technology landscape requires specialized skills and technology expertise, and firms might face challenges in finding qualified professionals to handle this changes and new age technologies.
- Client Diversity: Catering to clients from various industries and sectors may require different skill sets, resulting in a need for diverse expertise.
- Client Expectations: The rising expectations of clients for personalized, real-time services can strain a firm’s capacity and resources.
- Technology Adoption: The integration of advanced technologies can sometimes lead to a steep learning curve for the workforce, affecting productivity temporarily.
Read on to discover top strategies for US CPA and accounting firms to overcome capacity challenges.
Strategies to Overcome Capacity Challenges
1. Embrace Technology and Automation
Implementing the right technology and automation tools can significantly increase the efficiency of accounting processes and reduce manual efforts. Robotic Process Automation (RPA) can handle repetitive tasks, data entry, and reconciliation, freeing up accountants to focus on higher-value services. Cloud-based accounting platforms facilitate real-time collaboration with clients, streamlining data exchange and improving communication.
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2. Invest in Continuous Training and Skill Development
To address the skills gap, accounting firms should invest in continuous training and skill development for their employees. Providing opportunities for certifications, workshops, and webinars can enhance the team’s knowledge and capabilities, enabling them to tackle complex tasks with confidence.
3. Prioritize Client Segmentation
Client segmentation involves categorizing clients based on their needs, complexity, and potential for growth. By understanding which clients require specialized services and which can be served using standardized processes, firms can allocate their resources more effectively and ensure optimal client satisfaction.
4. Outsource Non-Core Functions
Outsourcing non-core functions like bookkeeping, payroll processing, and tax preparation can alleviate the burden on the in-house team, allowing them to concentrate on strategic and advisory services. Partnering with reputable outsourcing providers can ensure quality work and timely deliverables.
Accounting Seat from Finsmart has done wonders for hundreds of accounting firms in the USA. Check out what this accounting firm has to say about us:
5. Collaboration and Teamwork
Promote a culture of collaboration and teamwork within the firm. Encourage employees to share knowledge, best practices, and insights, fostering an environment of continuous learning and improvement. Cross-functional collaboration can also help distribute workloads more evenly.
6. Optimize Project Management
Effective project management is crucial for handling multiple clients and engagements simultaneously. Implementing project management tools and methodologies can streamline workflows, improve task delegation, and ensure deadlines are met without compromising quality.
7. Scalable Business Model
Develop a scalable business model that can accommodate fluctuations in demand and client volume. Flexibility in resource allocation and service offerings allows firms to adapt quickly to changing market conditions.
Finsmart Accounting with its 15 years of outsourced accounting space uses its own proprietary framework called DPPT – Definition, Process, Precision & TAT that has been the success mantra for supporting the firms in the US so that they don’t have to scramble to hire accountants.
“Before we started with them, my partner was already telling me we can’t bring on any more new clients because we didn’t have capacity and I am not concerned about that anymore at all.” said Rebecca Santiago.
Share your thoughts
Would you like to know more about the DPPT framework or have you or your company worked with offshore accountants during the accounting talent crunch? What was the experience like? Join the conversation below or check out our recent blogs on business growth and offshore hiring:
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Maanoj is Co-founder & Director of Growth Strategy & Alliance at Finsmart Accounting. He is an Outsourcing Expert, a People Champion, and a Dynamic Leader with strong Business Strategy and Scaling-up experience. He has incubated businesses, sold & exited ventures; helped build strong enterprises in very diversified verticals like Fintech, HR & Consulting spaces in various CXO capacities over the last 20 years.
