But the demand for accounting services have also gone up, accompanied by rapid legislation changes, and heightened client expectations continue to place pressure on firms to deliver high-quality work.
After two long years, we may be wondering if the pre-pandemic days will ever return. But, rather than hope, it’s better to be prepared.
If this is to be the new normal, then firms will need to adjust accordingly. The key to meeting these challenges in order to retain talent is to set accounting professionals up for success.
Let’s dive into how dire things really are in the accounting world. Then we’ll explore how technology can address this challenge of out-of-control burnout and foster collaboration in the accounting work culture that has been missing for too long.
Burnout is everywhere
A 2021 Indeed study found that 52% of workers feel burnt out, which is up from 43% prior to the pandemic. While the reasons might vary, 80% of those respondents linked their burnout directly to the pandemic.
Accountancy is considered one of the most stressful and demanding industries to be in. An AAT study found that 90% of accounting professionals experience stress, and 43% had to take time off due solely to stress.
Only 2% reported feeling unaffected by stress in that same study.
Heightened levels of burnout is leading to increased turnover across industries worldwide. You’ve heard it referred to as The Great Resignation. Workers are feeling overwhelmed, exhausted, and unhappy with their work, and are unable to channel stress and fatigue in the usual ways due to the ongoing pandemic.
Going back to the spring of 2021, a mass exodus of American employees began to take place and has persisted. An entire year of the pandemic – lockdowns, remote work, remote schooling for kids, and other factors – were catching up with people.
But accountancy has been hit particularly hard.
Annual turnover rates in accounting firms are over 25%, significantly higher than a few years ago when it was around 17%. The demand for accounting services is steadily climbing, the amount of work remains overwhelming for most accounting professionals, and holding onto staff to manage it all is a growing challenge for firms.
Even prior to the pandemic, a recent KPMG survey found that 86% of accountants faced more challenges than they had expected that year. In the same survey, 24% of accountants reported lacking the tools they needed for the increased workload. Add to that trend, the sustained reality of remote or hybrid work, and managing burnout and turnover becomes much more complex.
Why are accountants struggling now more than ever?
The pandemic and everything it brought were certainly factors that hindered accountants. However, in recent years, substantial legislative changes to tax laws have required accounting professionals to spend more time than ever before analyzing new codes and understanding their implications for clients.
In early 2021, accountants had to get familiar with the Consolidated Appropriations Act, all 5,593 pages of it. This introduction of new laws and the unique areas they touch, with tax season right around the corner, is just one example of legislation changes that sparked a sudden increase in work for accounting professionals.
In a recent article, Ben Willis, U.S. Tax Director at Blue J, explained:
“Treasury and the IRS have never been in this position before. They’ve never had to determine congressional intent when most congressmen and congresswomen themselves couldn’t tell you what the congressional intent was. Payroll Protection Program (PPP) loan deductibility, retroactively confirmed by the Consolidated Appropriations Act, 2021 (H.R. 133), was clear evidence of that uncertainty and a reason that courts, by necessity, must follow the law as written. Double benefits have bound Congress and the IRS, through Treasury Regulations, even when those benefits were later reversed through statutory and regulatory changes. Change is the only constant in this new era.”
Also, retroactive taxes are now a very real concern, leaving tax practitioners with no certainty that their work won’t be undone by future Congressional changes.
Without being able to automate processes in situations like these, accountants are cornered.
Missing any important information can lead to serious issues for clients, and hurt the credibility of their firm. But understanding new laws perfectly takes time, which accountants don’t have much of. Accountants either end up spending all their time analyzing every detail they can and fall behind, or they do not go in depth with their analyses which poses risks for clients. Either way, stress skyrockets.
Working smarter, rather than harder with technology
There is a very good chance that how we are working now, with fully remote or hybrid models, will be the way of work moving forward.
PwC’s international tax audit and consulting firm has permanently moved to remote work anywhere in the U.S. This will affect about 40,000 employees who work in client services, including consultants, auditors, and tax professionals. Many major companies and firms are moving in a similar direction. With that, comes the inevitable, increasing integration of technology in accountancy.
Shez Hamill, a director at CaseWare, said, “Whether 2020 marks the beginning of the age of accounting automation remains to be seen, but it is definitely where accountants expect the industry to go. Most accountants recognise that technology will change their day-to-day job and that they will have to take on a new role which is more consultative and about adding value to clients.”
The nature of accounting work itself is geared to change. Many clients now look for consulting and advisory services, rather than just commoditized ones. Automation is the key to helping accountants offload traditionally manual, time-consuming work in order to provide their clients with the services they expect.
In a Journal of Accountancy article, Adam Slack, founder of Two Roads, shared some advice on dealing with burnout. He said, “Automate, automate, automate. Someone has figured out how to do big parts of your job better than you can with a piece of software. Go find it.”
That’s fairly straightforward, and we agree.
Automation is the direction that the majority of tech is headed (across industries) to help professionals be more productive and deliver greater results. There is a concern for many that automation might replace human professionals, and that accounting firms adopting automation tools at a large scale may be bad for the people who work there.
But when we look at how automation has helped in the accounting space so far, accounting professionals are simply able to perform at a higher level and meet a greater demand for their time.
Let’s look at just 3 ways technology helps.
3 ways technology can reduce accountant burnout
To tackle accountant burnout, firms need to help their accounting professionals manage their workload and work more efficiently, all with greater speed and ease.
While that might seem like a tall order to some, given how challenging the nature of accounting work is, there are many tools that help to reduce manual effort. Automation tools allow accounting professionals to optimize their overall workflow, cut down their non-billable hours, and receive structured training and mentorship.
CaseWare is a cloud-based platform for accountants that optimizes a number of different processes. Its different solutions involve automating things like producing reports, linking documents so that a change in one document is automatically reflected across other related documents, generating financial statements and more. These are ways that work becomes more efficient, and human error is drastically reduced.
Karbon is another workflow management tool that leverages automation as much as possible. There are so many manual processes that are automated and workflows that can be templated. It scales productivity without requiring teams to grow significantly by automating recurring tasks, information gathering and other activities.
Blue J Tax is a tax analysis and research tool designed to help any tax practitioner build the best insights as fast as possible. The decision finder helps you find all the relevant decisions to a tax scenario based on the factors you provide. It reduces hours of research to minutes, and validates your instincts as a practitioner. The prediction engine lets you test tax scenario outcomes with up to 90% accuracy. You can even change the factors to see which ones influence decisions the most, and how likely the opposite decision is, allowing you to quantify risk.
These are just a few examples of how automation and AI, steered by human professionals, drives higher quality results for the practitioner and client alike.
Reduced non-billable hours to provide balance
Having to write off research and analysis time is a frustrating experience. Conventional approaches to research and analysis rely on time-consuming research effort. This is a reality for any accountant, especially during busy seasons.
On average, firms only achieve an annual realization rate of 84%. 15% of the work accountants do ends up as non-billable. That’s two months worth of work out of the year! Reducing the overall hours of work and helping accountants stay within those billable limits would alleviate plenty of stress and frustration. It would keep accountants from exhausting themselves and experiencing burnout.
With tools to automate research, analysis, and any recurring task, accountants can focus on other areas of their work without stretching themselves thin. They’ll be able to build deeper insights and fortify their client’s position, spend more time advising clients, actually take on more clients, produce higher quality work, and maintain a healthier work-life balance.
Accounting professionals can also greatly reduce the amount of work that they cannot bill for at all, using their time in the most valuable and efficient way possible.
Time for training, mentorship, and collaboration
There is a growing skill gap among junior accountants and so the need for training and mentorship is higher than ever. At the same time, the reality of remote work and hybrid models continue to hinder the organic development of young accountants.
Using AI-powered tools to carry out research and analysis helps to address this issue in two ways:
- When workflows are optimized and some manual work is automated, the time for formal training and mentoring can be set aside.
- With a more structured approach to research and analysis, junior accountants learn a lot on their own since they’re able to find the right answers much faster.
Being able to coach and mentor staff within a firm is essential to retaining them, as training plays a key role in keeping people happy and confident. As well, junior accountants and talented accountants looking for a new opportunity, will both expect firms to have the latest tools available for them to succeed.
Tax practitioners long for the collaboration they once felt. Blue J’s tax diagramming solution fosters collaborative learning by offering up a virtual white board to creatively explore fact patterns, spot issues, and find solutions to problems.
By leveraging AI and cutting edge solutions for tax professionals, innovative firms are in a better position to support the next generation of accountants. Rather than feeling lost, overwhelmed or burnt out early in their careers, accountants can instead learn faster, find time to collaborate and grow to be high performers.
Look for places where you can introduce technology in your firm, or look at what some of the biggest firms are doing in order to innovate and stay ahead of the curve. There may be opportunities for you to make a leap forward and empower your own accountants.