Navigating the Accounting Talent Shortage: Strategies for Business Growth and Efficiency

In today's fast-paced business world, leaders are facing a dual challenge: maintaining and expanding revenue streams while contending with a growing shortage of skilled accountants. As of May 2023, more than 300,000 accountants and auditors have left their positions in the past two years alone, constituting a 17% decline in employed accountants and auditors compared to 2019. This talent gap is placing immense pressure on organizations to find innovative ways to manage their financial functions efficiently.
 
The accounting shortage has left businesses of all sizes and industries grappling with a pressing question: how do you meet your financial obligations, ensure compliance, and drive growth when the expertise you need is in short supply?
 
Embracing Outsourcing as a Solution
Companies of all sizes are increasingly turning to outsourcing as a strategic solution to bridge the gap. And this isn't exclusive to accounting functions - in fact according to research by Jump Cloud, 88% percent of surveyed enterprises say they currently use an MSP or are considering one. By outsourcing accounting functions specifically, businesses open the door to a variety of benefits beyond alleviating the immediate staffing shortage.
 
Outsourcing firms offer not only a team of experienced professionals who are well-versed in the latest accounting standards and technologies, but also savings on salaries, benefits, and overhead costs for the business, significantly impacting their bottom line. Outsourcing also allows businesses to flexibly adjust their accounting support to match their evolving needs.
 

1. Increased Cost-Savings: Outsourcing accounting can often be more cost-effective than hiring and maintaining in-house accounting staff. According to an analysis from Kreischer Miller, companies can expect average savings of at least 20% when they outsource their accounting needs. By outsourcing, businesses can reduce expenses related to salaries, benefits, training, office space, and technology infrastructure.

2. Access to Expert Advisors: By outsourcing accounting services, businesses have the ability to work hand-in-hand with experienced and skilled accountants who specialize in various aspects of financial management. Outsourcing can provide access to a broader range of expertise and industry knowledge – often leading  to improved accuracy in financial reporting, compliance with regulations, and better financial decision-making for the business. 

3. Greater Flexibility: Outsourcing also allows businesses to flexibly adjust their accounting support to match their evolving needs. Whether you need to expand your financial team during busy periods or scale down during slower times, outsourcing allows for this flexibility without the challenges of hiring, training, or laying off in-house staff.

 

4. Ability to Prioritize Core Functions: By outsourcing accounting functions, businesses can free up valuable time and resources that can be redirected towards core business activities. According to Deloitte, 65% of businesses said outsourcing helps them focus on these functions. This allows companies to concentrate on their primary goals without navigating the intricacies of accounting.

 

5. Access to Advanced Technology and Tools: Outsourcing firms often invest in state-of-the-art accounting software and technologies to improve efficiency and accuracy. When you outsource, your business can benefit from access to these advanced tools without the upfront costs and ongoing maintenance expenses. This can lead to improved financial reporting, data analysis, and overall financial management.

 
While outsourcing accounting functions can offer significant advantages, it's important to assess whether it's the right fit for your specific business. Not all organizations are created equal, and what works for one may not work for another.
 
How to Analyze If  Outsourcing is Right for Your Business
 
In today's business landscape, the decision to outsource certain functions has become a strategic choice for many organizations seeking to optimize their operations. However, determining whether outsourcing is the right fit for your business requires an evaluation of various factors:
 

1. Consider the scale and complexity of your accounting needs. Outsourcing tends to be most effective for small to medium-sized businesses that may not require a full in-house accounting department. If your financial operations are relatively straightforward, outsourcing can be a cost-effective option. However, if your business is large and involves highly complex financial transactions, you may still need an in-house team to handle day-to-day operations and strategic financial planning, with outsourcing playing a complementary role for specific tasks.

 

2. Consider how outsourcing fits into your overall business strategy. Does it allow your internal team to focus on more strategic initiatives? Does it enable you to scale more rapidly or enter new markets? Businesses should strategically utilize outsourcing so that it is supporting your broader objectives.

 

3. Ensure that your service is compliant with industry regulations. Depending on your industry, there may be specific regulations and compliance requirements governing financial data. It's crucial to choose an outsourcing partner well-versed in your industry's regulations to avoid potential legal and regulatory issues.

 
From the scale and complexity of accounting needs to alignment with broader business strategy and compliance with industry regulations, each aspect plays a pivotal role in determining if outsourcing can contribute to your business's growth and financial success. By carefully considering these factors, you can make an informed decision that will ultimately contribute to your business's growth and financial success.
 
Maintaining Growth Through The Talent Shortage
 
Amidst the challenging shortage of accounting talent, businesses have an opportunity for strategic growth. Whether it's outsourcing, using automation and AI, or supporting your current accounting team, what's important is being flexible and forward-thinking.
 
The problems caused by the talent shortage are real, but there are practical solutions. By carefully evaluating your business's unique needs and matching them with these new approaches, you not only handle the shortage but also prepare for a future of sustainable growth, cost-effectiveness, and financial strength. In this ever-changing environment, your ability to adapt and succeed depends on your willingness to embrace change and set a course toward a brighter financial future.
 

_{Justin Smith is the Chief Financial Officer of LeaseQuery, where he brings extensive experience in advising companies, boards, and shareholders on M&A, equity raises, and debt financings.}