The accountant shortage is impacting not-for-profit organizations, with far-reaching consequences for their financial management and reporting capabilities. In 2020, approximately 75% of the CPA workforce in the U.S. reached retirement age, according to the American Institute of Certified Public Accountants (AICPA). Compounding this issue, the number of students pursuing accounting degrees has been steadily declining, as reported in the AICPA 2021 Trends Report.
This shortage creates significant challenges for not-for-profits in two critical areas: Staffing internal accounting needs and preparing for annual audits and Form 990 filings.
To address these challenges, not-for-profits can take several proactive steps:
Plan ahead and document processes
- Develop succession and backup plans for all accounting personnel
- Thoroughly document all financial processes, including policies and procedures
Embrace technology and outsourcing
- Implement automation and technology to increase productivity and efficiency
- Consider outsourcing accounting functions to specialized firms
Outsourcing accounting services can be an excellent solution for not-for-profits facing staffing challenges. It offers several benefits:
- Cost-effectiveness: Outsourcing can be more economical than maintaining in-house staff, as it eliminates expenses related to hiring, training, and employee benefits.
- Continuity and expertise: Professional accounting firms can provide consistent, high-quality services without the risk of turnover or skill gaps.
- Scalability: Outsourced services can be adjusted to meet changing needs, providing flexibility for growing organizations.
- Focus on core mission: By delegating accounting tasks, not-for-profits can concentrate on their primary objectives and programs.
Assessing their accounting needs offers an opportunity for not-for-profits to reevaluate their financial management strategies. By embracing innovative solutions like outsourcing and technology adoption, organizations can navigate this crisis effectively and maintain strong financial oversight.
Client Accounting Services at CironeFriedberg continue to grow as businesses seek solutions for accounting, bookkeeping, and making informed business decisions.
Learn more about our outsourced Client Accounting Services, designed to help keep your business operating as profitably as possible with a host of outsourced services.
HAVE QUESTIONS?
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Darien) or email us at info@cironefriedberg.com.
