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Crisis in the Accountancy Business

December 18, 2023

The rising issue in the world of accounting.

Likely unbeknownst to many, there has been a severe crisis in the field of accountancy following the recent pandemic. During the years that are now commonly referred to simply as ‘COVID’ over 20 percent of accountants abandoned their profession. Indeed, within my own firm we lost half of our staff between 2020 and 2023. The reasons for this are numerous and many were in place well before they were expedited by the events of COVID. Unsurprisingly in such a demanding field of work there has always been high levels of pressure married with consequent time-demands. It is not uncommon for accountants to work hundred-hour weeks during the tax season.


Furthermore, the financial remuneration for doing so does not match that of other professions which require an equally great time commitment. In addition to this, those who form a part of the younger generation including accountants have a different understanding of what a good work-life balance should look like when compared to older generations. Given that the professional demands placed on accountants have actually increased generationally, our chosen career path naturally does not meet this expectation. This is a trend that only appears to be worsening with time and technological advancements. I myself have worked in excess of 800 days without a single day off.

 

Taking all this into consideration, it is hardly surprising that those 20 percent of accountants decided to pursue alternative careers. A lack of accountants is a huge issue which should concern not only business owners but also society at large. Without accountants, there is no one to calculate and collect taxes or ensure the seamless running of the stock market. Throughout this month's series of blogs, I will explain how existing issues in the field of accountancy were accentuated by the tragic events of COVID before moving in subsequent months to share my solution to save this vital profession.

Is this Income?

August 3, 2024
One of the biggest questions pertaining to the PPP loans was, ‘If forgiven, will these loans be counted as income?’

PPP FAQ's

August 2, 2024
You're not the only one confused about what this means...

Four Million Loans

August 1, 2024
Within weeks of the government announcing the PPP loans, millions of these loans were processed with hundreds of billions of dollars consequently being distributed across the US.

Payroll Protection Program

July 31, 2024
"The scheme of PPP Loans."

Accounting Terminology

July 30, 2024
Changes to the lives of accountants were not just limited to having to work from home and reconsider our use of office space.

Office Issues

July 29, 2024
It was not only the working environment of organizations such as the IRS that experienced severe disruption in the midst of the pandemic.

Destined to Fail

July 28, 2024
Why the tax profession needs help.

Ton of Bricks

January 11, 2024
During COVID, there was an unprecedented boom in unemployment. Millions were laid off in California alone, leaving our state’s severely understaffed unemployment offices totally overrun. They did not have the facilities, nor the means in many cases, to answer the panicked questions that were pouring in by the boatload. This left many confused, newly unemployed people taking the next logical step (at least in their minds) to getting answers. As we exist and work in the financial world and these issues were monetary, millions turned to their accountants seeking guidance. However, accountants are not trained in the field of unemployment assistance and thus do not know how to file unemployment claims. Therefore, we were faced with another tidal wave of questions for which we had no answers. And yet, it did not end there. Our clients sought to provide help to their friends who would usually file their own taxes. As they could no longer get through to the IRS, clients of ours offered to forward any questions to us their accountants. The same occurred in situations where children had been unable to get in contact with their own accountants and so their parents brought another set of questions to us. Much like the California unemployment offices, we were continually inundated with sets of questions that we really did not have the time nor the resources to provide answers to. Furthermore, these questions were not only external, as the tax season had been extended to July 15, accountants within our own firm and others began to present their bosses with inquiries relating to the hard earned vacation that they would usually take at the end of April. Rightfully so, this vacation period is eagerly anticipated every year and now it was becoming clear that it would not proceed as usual. Employees wanted to know if they should bother making plans, whether their bosses would grant them time off and if it would even be possible to travel. The questions did not stop and yet, there was so much more to come.

Extended Tax Filing Deadline

January 11, 2024
For those involved in tax preparation, COVID managed to send society into a global shutdown at the most inconvenient time possible (not to say that there is a convenient time for a global shutdown), a month prior to tax day. Therefore, one could be forgiven for imagining that an extended tax filing deadline would have helped to alleviate some of the pressure placed on accountants and tax preparers. However the decision by the federal government to extend the tax filing deadline to July 15 also extended the deadline to pay any taxes owed to that date. Therefore, while many people felt a sense of relief around this extension, as it gave them a little extra time to get their affairs in order, for those of us tasked with preparing said taxes it provided an extended, three month headache. We were faced with another set of questions and an accompanying bombardment of phone calls. The yearly filing date was extended, but what about F-Bars (foreign taxes)? What about quarterly tax estimates that are normally due in June? Will those be extended as well? However, we were faced with an even more pressing question. Because federal tax deadlines were extended, did this mean that state tax deadlines were also to be extended? This was another seemingly unanswerable question as most state tax offices did not know themselves, nor were they in the office to answer our calls. Eighty hour work weeks seemed a pleasant, distant memory as I began undertaking hundred hour weeks to deal with all the added demands that kept piling up. In summary, our profession was hit with a ton of bricks. We continued to be provided with new pieces of tax altering legislation which each individually required hours of work to understand their intent and effect. At the best of times, a new piece of legislation would require roughly twenty-five extra hours of work. Over the course of a few days, we were hit with over a hundred new laws that affected taxes, tax filing and more. All of which needed immediate answers for our affected clients.

The IRS Closing

January 11, 2024
Amidst the chaos that was COVID, just like all other offices and sectors across the US, the Internal Revenue Service (IRS) was forced to close their doors and send employees to work from home. At this time, they cited that they would return to an in-person system of work when it was safe to do so. Consequently, the organization had to make significant changes to every aspect of their operations. This was especially awkward and burdensome for us as accountants due to the fact that it fell right in the middle of tax filing season. All of the IRS submission processing centers were forced to close and as such the organization stopped taking paper tax returns. And so, who did those millions throughout the US who did not know where to send their returns call … Their Accountants! The IRS closed down their taxpayer assistance lines leaving citizens unable to call the IRS and ask questions about their taxes. And so, who did these millions with questions call … Their Accountants! During this time period, the IRS accrued in excess of sixteen-million paper tax returns which needed to be filed. Conversely, their in-person workforce dropped from eighty-one thousand to a measly three thousand. This number would go on to drop as low as one thousand employees who were working full weeks in the office. Whilst the remaining eighty thousand employees were still working, this was from home, without the necessary resources, all whilst home-schooling their children (something that most everyone is unqualified to do). The chaos and confusion that ensued had to go somewhere and the next logical place for clients to try and get answers was (you guessed it) from their accountants. During this time, my clients were calling me so fast that I could barely hang-up my phone before it would ring again. This was an image that was mirrored across the accountancy profession.
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