Accounting and finance functions are under more pressure than ever. From evolving technology to workforce gaps, today’s leaders are juggling growing complexity with shrinking resources. At Axia, we’ve seen these challenges play out across businesses of all sizes — and we know there’s a better way.

Here are some of the top challenges finance teams are facing, and why so many are rethinking how their departments are structured.

1. Worsening Talent Shortages

The numbers tell the story:

• A Wall Street Journal analysis of BLS data found that 300,000 U.S. accountants and auditors left their jobs in 2019–2021 (≈17% decline), 
• There is a 10% decline in the U.S. accountant workforce from 2019 to 2024, reflecting retirements and a shrinking pipeline (Reuters news-side analysis drawing on BLS data).
•  The pipeline of candidates is decreasing with a 33% decline in candidates taking the CPA exam from 2016 to 2022, while 75% of CPAs are at retirement age per .
• 43% of companies are hiring for new roles and 51% are struggling to backfill existing ones per Robert Half.

With fewer qualified candidates entering the profession and baby boomers retiring, the pipeline simply isn’t keeping up. This talent crunch creates skill gaps that hinder productivity and limit innovation. 

2. Skill Gaps

At Axia when we speak with hiring managers, we often hear the same thing: they are looking for accountants who can solve problems, communicate and use technology effectively. Yet those skill sets are not common in accounting and finance departments. Instead, we see static skills sets, and in many companies, teams working in silos performing the same tasks the same way for many years. In fact, per McKinsey research, “Most companies worldwide—87 percent—are aware that they either already have a skills gap, or will have one within a few years” (McKinsey Week in Charts (Jan 27, 2021). There are many reasons for this; there may have been little or no impetus to change, many companies invest little in training and development and employees have not kept up with repaid advances in technology.  The outcome is that many accountants are not well prepared for current and future demands.

3. Keeping Up with Technology

Technology is evolving rapidly — and so is the demand for digital finance. Yet we see generally low adoption of new technology in accounting and finance. Instead, most teams are:

• Overwhelmed by outdated fragmented, incompatible systems,
• Not fully utilizing capabilities of existing ERP systems,
• Lacking automation in core processes.

As a result, accounting departments still spend a significant amount of their time moving information from one system to another, taking information from various sources, combining and reconciling it for input into journal entries or other input.

3. Expanding Expectations – Doing More With less

Stakeholders expect finance and accounting to not only close the books on time while complying with accounting, tax and regulatory rules but also providing real-time insights and strategic analysis that drive increased value to the organization. At the same time, accounting and finance functions are under increasing cost pressures, expected to do more with less.

4. Process Inefficiencies and Institutional Knowledge Gaps

Many organizations still rely on informal or ad hoc processes. Workarounds, manual tasks, and institutional knowledge held by a few key individuals all lead to:

• Delays in closing the books
• Errors and inconsistencies
• Year-end crunches before audits

This lack of standardization is a risk — and it’s holding teams back from becoming strategic partners to the business.

Moving Forward with Automation, Continuous Improvement and Accounting Outsourcing

As expectations grow and resources tighten, many finance leaders are realizing they need to do more with less. That’s where Automation, Continuous Improvement and Accounting Outsourcing can offer real leverage — developing and acquiring the right skills, processes, and technologies to meet today’s demands without overextending internal teams.

People & Skill Sets

Leadership sets the tone by shifting the mindset to continuous improvement and collaboration, setting expectations and building trust. Skills should be assessed against current and expected needs; investments in training and development can help address skill gaps with technology and processes while providing growth opportunities, helping to retain key team members. 

Automation

Our methodology for achieving higher levels of automation involves the following steps:

• Platform: If your company is running on outdated or fragmented systems, implementing a modern cloud-based platform at least for the financials can create the foundation for more automated accounting.
• Leveraging existing systems: Next, we want to make sure we are getting the most out of our existing systems, which may involve unlocking unused features or optimizing processes to match the workflow and capabilities of the system.
• Best tool for the job: Many tools designed around the needs of accounting department to handle for example the payment cycle, taxes, consolidation and reporting, managing the close process and reconciliations, to name a few, are available on the market that can turn what was a messy, time-consuming processes into a controlled, efficient process.
• Artificial Intelligence (AI) holds tremendous potential for accountants and is expected to completely reshape the profession. Generative AI enables significant time savings performing research, analysis, reconciliations and a myriad of other tasks. It is not an “out of the box” solution however, it is up to accountants to figure out how to deploy AI, and as a consequence, we see little adoption of it today. We also see that even though many systems already in use deploy AI, it is not used by accounting teams yet. Agentic AI, which can handle a process start to finish is starting to come on the market. 

Continuous Improvement

Improvements in accounting require solving many process and technology challenges. There no silver bullets. Establishing a continuous improvement process is the best way to achieve incremental progress over time while building a collaborative, problem solving culture.

Deploying Accounting Outsourcing

Accounting as a Service, also known as accounting outsourcing, is a strategy that effectively addresses many of the top challenges facing accounting and finance leaders today:

• Accountant shortage and skill gaps: Accounting Outsourcing provides access to the global talent pool addressing resource and skill gaps with the resources and skills needed when needed. Many firms can provide a complete set of skills from basic bookkeeping to fractional controllership and CFO. Partnering with a capable firm also provides access to experienced advisory services around M&A, technical accounting, taxes and FP&A.
• Automation: Many accounting firms deploy state of the art, best of breed systems utilizing AI to maximize automation; in fact, it is critical for them to be efficient and cost effective. Deploying an accounting as a service firm can “fast-track” your journey to a more automated function. Some firms partner with ERP providers enabling companies to obtain use of a license at a relatively low cost.
• Doing more with less: Accounting Outsourcing reduces costs through automation, best practice processes and access to lower cost resources in the global talent pool. Companies find access to analysts skilled with AI, Business Intelligence systems who can develop insightful and timely reporting driving improved business results.

 

With accounting and finance functions are under more pressure than ever, leaders should evaluate how automation, continuous improvement and Accounting Outsourcing can address many of these challenges. 

 ➡️ Ready to modernize your finance function? Contact Axia to explore how outsourced accounting can help.