CFOs turn to AI amid accountant shortage—but experienced talent is still needed

Good morning. The ongoing shortage of accountants and CPAs is top of mind for CFOs. And it’s leading to big transformations in how companies are conducting their finance operations.

“The struggle is real,” Jenn Ryu, CFO at RGP, a global consulting firm, told me of the shortage. “I'm personally experiencing it.”

Experienced accountants are retiring and students aren’t racing to major in accounting despite plentiful job openings. Accounting is certainly a demanding career, Ryu said. Some recent graduates are joining accounting firms where they’re working a lot of overtime, she said. “Gen Z is looking for more balance,” Ryu added.

A recent analysis by Bloomberg based on data from the U.S. Bureau of Labor Statistics finds there are 340,000 fewer accountants than five years ago, leaving the number of accountants and auditors employed in the U.S. at approximately 1.6 million.

The significant talent acquisition and retention challenges in the accounting profession are likely to continue throughout 2024, including staffing shortages, according to the AICPA. To address this, the AICPA formed the National Pipeline Advisory Group (NPAG) in July 2023. NPAG consists of accounting professionals, state CPA societies, academics, and regulators. They're charged with developing a profession-wide strategy for increasing the number of accountants and CPAs. A final report is scheduled to be released this summer.

Ryu shared with me new RGP data that finds 43% of financial decision-makers said their organization is investing more in end-to-end automated accounting processes and AI tools to counter the accountant shortage. But also in this process, companies are replacing a lot of the mundane, manual work that accountants have to do, which in turn could attract more young professionals into the field, she said.

However, Ryu notes that she’s also seeing a shortage of mid-to-high-level accountants, “I don't think that AI is going to replace them,” she said. “I still think that highly skilled accountants are still needed to provide context and to make judgment calls.”

RGP’s survey, which polled 213 CFOs and finance leaders at the director level or above at U.S. companies earning from $50 million to more than $500 million in revenue, also found that 31% said they are using more consulting talent to transform their finance function. That involves building “the best of both worlds” by creating a finance team that uses technology for mundane practices but also upskills its accountants for a more strategic focus on complex work, she explained.

The future accountant will be charged with understanding what’s happening in the business and contributing to the company’s strategy. “We're looking for more well-rounded accountants,” Ryu said. “And accountants with better communication and storytelling skills as well.”

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com