How Artificial Intelligence is Impacting the shortage of the Accounting Profession in the USA

The accounting profession is hemorrhaging talent and is at the edge of a shortage of young accounting professionals in the industry. Currently, the accounting industry is struggling to see growth as young accounting graduates aren’t gravitating toward this formerly buoyant sector. The change in perceptions regarding occupation presents an empirical risk and raises questions for the survival of accounting firms. The biggest factor that contributes to such concern is the fear among professionals about insecurity for the Job due to the rise in AI. In an intriguing plot twist, Puzzle, an accounting startup—is using AI and automation to streamline accounting and finance operations where there’s currently a talent deficit.

Reasons Behind the Accounting Shortage:

The accounting sector in the United States faces significant challenges related to both the channel of new account graduates and the retention of professionals. Endured accountants are progressively leaving the field to pursue careers in finance, Business Analysis, Accounting Automation, Human Resources, and banking, aggravating the staffing deficit caused by declining interest in counting degrees among scholars. Fewer people are taking entry into accounting degrees and as well as an increase in the retirement of existing accounting professionals leading to more open positions for longer periods.

According to the Wall Street Journal, over 300,000 U.S. accountants and adjudicators left their jobs between 2019 and 2021. The number of accountants in the U.S. has declined by 15.9 since 2019, as reported by the Bureau of Labor Statistics. Interestingly, this outpour isn’t limited to retirees; young accountants aged between 25 to 34 and mid-career professionals aged between 45 to 54 are also leaving the profession.

About 82% of workers who exited accounting in the year 2023 through Sept. 1 had at least six years of experience, up from 77% and 71% in full years 2022 and 2021 respectively, Live Data said.

There are various reasons behind such decline such as long working hours, modest pay, work-life imbalance, and the specter of automation are prompting accountants to consider non-accounting positions. Considering the talent shortage in the industry, it is inevitable to emphasize the importance of next-generation accounting software. Startups and Small-Sized companies alike can benefit from such tools, enabling them to make informed financial decisions, enhance business acumen, and scale responsibly.

How to Overcome the Challenges

Accounting firms should consider increasing the salaries of employees, embracing the company culture that can allow employees to balance work-life, arranging training sessions on new technologies and tools to enhance the confidence of aged accounting professionals, adopting automation in the accounting practices etc. This will allow them to overcome challenges and retain as well as attract new talents in the industry.

How the Puzzle is mitigating the risk

According to Forbes, Puzzle founded by Sasha Orloff, is developing a cutting-edge accounting software package specifically for startups. The goal is to create an all-encompassing financial intelligence platform that seamlessly integrates with popular fintech tools such as Stripe, Brex, and Gusto. By combining a streaming financial data platform with a general accounting ledger, Mystification enables startups to gain real-time insights into their financial health.

The mission is to empower founders and prevent business ideas from faltering due to financial mismanagement. Their AI-powered accounting software combines the strengths of QuickBooks, OpenAI, and Stripe. By automating essential tasks—such as transaction entry, reconciliation, and categorization the Puzzle minimizes human error and provides real-time financial statements tailored for technology startups.

For more information, please follow this link: https://www.forbes.com/sites/jackkelly/2024/05/17/ai-taking-over-accounting-jobs/?sh=5106a05e4ad4