Introduction
Traditionally, accounting work in the USA has been the forte of U.S. accounting professionals. However, the USA is currently facing a massive accounting talent shortage. Over the last few years, a staggering 17% of the CPA workforce in the United States has left the profession, according to a report by The Wall Street Journal.
Over 300,000 qualified accountants resigned, retired early, or moved to other careers between 2019 and 2021 alone. This highlights a growing disparity between the number of available positions and the number of competent professionals. Furthermore, this shortage is affecting businesses across various industries and is projected to worsen in the coming years.
As a result, accounting firms outsourcing to India are becoming an increasingly viable solution to bridge this widening gap and continue to scale their operations.
What are the key factors contributing to the shortage?
Several factors contribute to the shortage of accountants in the USA. The foremost reasons are mentioned below:
- Fewer Entrants: The number of students pursuing accounting degrees and certifications is decreasing. This is leading to a decrease in the number of entrants into the profession.
- Ageing Workforce: A large number of experienced accountants are nearing retirement, creating a significant void. The existing workforce is ageing, and a void is being created that isn’t being filled by younger professionals.
- Increased Complexity: Today, businesses face more complex regulatory environments, greater scrutiny of environmental, social, and governance (ESG) issues, and a need for enhanced analytical skills. This places an increased stress on existing accountants and a greater demand for highly qualified accounting professionals.
- Less Appealing: Many younger professionals are perceiving accounting as a less appealing career path. They are being deterred by requirements such as rigid licensing, demanding workloads, and a perceived lack of innovation. Compared to this, they believe that other career paths offer more appealing options.
- Competition from Other Industries: Other fields, especially those in technology and finance, are offering more attractive compensation and career advancement opportunities, which have been steadily drawing talent away from the accounting field.
This shortage is one of the core reasons many accounting firms outsourcing to India are now able to meet operational needs more effectively.
What is the impact of the current accountant shortage on CPA firms and U.S. businesses?
The current accounting shortage is crippling businesses in the USA. Here are some scenarios which depict the troublesome state of affairs:
- Businesses are experiencing delays in tax filings, audits, financial reporting, and other critical accounting functions due to the staffing shortage.
- There is increased workload for existing staff, which means that fewer accountants in the profession are having to shoulder a heavier workload. This is leading to burnout and decreased job satisfaction.
- Additionally, they are being required to offer higher salaries and benefits to retain qualified candidates. This potentially increases their operating expenses and also increases the risk of errors in financial reporting, as well as the potential for fraudulent activities.
- The accounting shortage is also hindering the adoption of new technologies as people are less adaptive to new changes, such as AI and automation. These technologies are crucial for improving efficiency and productivity in accounting.
To address these problems, a growing number of accounting firms outsourcing to India are gaining access to skilled talent and modernizing processes more cost-effectively.
Key Benefits of Outsourcing to India:
U.S firms have found a way to address talent shortages hindering their business and scale their operations efficiently. U.S. firms now rely on India’s large pool of skilled accounting professionals to handle increased workloads, manage seasonal peaks, and focus on core competencies. In this way, U.S. firms reduce costs and operational burden.
Let us now examine some of the key advantages that U.S. firms gain by navigating talent shortages and outsourcing to India.
Significant Cost Efficiency: Lower labor costs in India enable U.S. firms to reduce expenses while maintaining high-quality service delivery. At KMK, our services ensure accurate, secure, and scalable bookkeeping tailored to your specific needs, resulting in cost savings of over 50%.
Scalability: By outsourcing to India, US firms gain access to a flexible workforce that can be scaled up or down based on business needs. This is particularly during busy seasons or for specific projects. KMK gives U.S. firms a flexible team that can grow or shrink as needed—perfect for busy seasons or short-term projects.
Access to Experienced Talent: India offers a deep talent pool of accounting professionals, including Chartered Accountants with expertise across various domains. With KMK, you get skilled Indian accountants, including Chartered Accountants, who bring deep expertise across accounting and tax services.
Faster Turnarounds with Time Zone Advantage: The time difference between India and the U.S. allows for overnight progress, enabling more rapid turnaround and 24-hour workflow continuity. Specifically, at KMK, we work from 4:30 am EST to 1:30 pm EST, so considerable overlap exists between the time zones in India and the USA. Our response time to emails and other queries is generally less than 24 hours.
Refocus on Strategic Priorities: By outsourcing routine tasks, firms can redirect internal resources toward client relationships, business development, and core strategic initiatives. KMK takes care of your routine accounting work, so your team can spend more time building client relationships and growing your business.
By leveraging these advantages, accounting firms outsourcing to India can maintain service quality while reducing internal stress.
How KMK Associates Can Help
KMK Associates works closely with accounting firms outsourcing to India, offering full-service support to U.S. CPA firms looking to overcome hiring challenges. From bookkeeping and tax preparation to payroll and advisory services, our skilled professionals help you manage peak seasons, reduce costs, and operate with greater agility, without compromising compliance or quality.
Conclusion
The accounting talent gap in the U.S. isn’t going away anytime soon. However, there is a practical and scalable way forward. For many, outsourcing to India by accounting firms has become the most efficient way to maintain continuity, cut overheads, and focus on growth. Still exploring your options? KMK Associates is ready to support your firm with reliable, expert-led outsourced solutions tailored to your needs.
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