The CPA Shortage in Nashville, TN: Examining Its Extensive Effects

Nashville, TN, like many areas across the nation, is experiencing a significant shortage of Certified Public Accountants (CPAs), a challenge magnified by demographic shifts, professional evolution, and a complex regulatory landscape. This shortage not only strains the industry but also deeply impacts the clients relying on these essential services.

A Growing Concern

Data from the American Institute of CPAs (AICPA) highlights a distressing trend: a national decline in CPA exam candidates, including a roughly 5% decrease in test-takers between 2019 and 2020. Nashville's dynamic economy, thriving in sectors such as entertainment, healthcare, and technology, exacerbates the demand for qualified CPAs. Despite projections indicating a need for growth in the accounting and auditing sector, the supply of new CPAs falls short.

Broad Implications for Businesses and Individuals

The CPA shortage significantly affects both businesses and individuals, influencing financial planning, tax planning & compliance, as well as regulatory adherence. One of the most concerning developments amid this shortage is CPAs having to make the difficult decision to drop long-standing clients due to limited capacity. It’s impacts are far-reaching:

• Challenges with Banks and Financing: The need for small businesses to provide reviewed or audited financial statements for loans becomes a greater hurdle with fewer CPAs available, leading to increased costs and delays that can stifle business growth.
• Compliance and State Regulation Issues: State mandates requiring periodic financial reviews or specific audits are harder to fulfill on time, exposing businesses to potential compliance penalties.
• Tax Filing and Planning Delays: The cornerstone services of tax planning and filing are now fraught with longer wait times and rising fees, disrupting personal and business financial management.
• Inability to Serve Legacy Clients: Perhaps one of the most direct impacts on individuals is the tough reality of CPAs having to drop long-standing clients. This unprecedented step stems from an overwhelming workload and the need to prioritize services, leaving many loyal clients in search of new accountants during a time of general scarcity.
• Advisory Service Limitations: The advisory role CPAs play in financial decisions and strategy is crucial, yet with fewer professionals available, this guidance is becoming increasingly hard to access, compounding the historical issue of firms’ outsized compliance workload leaving little capacity for these services.

The Ripple Effect on the Economy

The ramifications of the CPA shortage reach beyond the immediate sphere of accounting and financial services, impacting the economic fabric of communities. Small businesses unable to expedite financial reviews for loans may delay expansions, indirectly affecting job creation and economic dynamism. Similarly, the financial uncertainties caused by delays in filing tax returns and a lack of financial & tax advisory can influence broader consumer spending trends.

Conclusion

In summary, the CPA shortage in Nashville, TN, and beyond represents a significant challenge with widespread effects on businesses, individuals, and the economy at large. As we navigate this landscape, it's essential to recognize the indispensable role of CPAs and the need for solutions to ensure the profession can meet the demands of a rapidly evolving financial and regulatory environment. And, perhaps now more than ever, it’s a gentle reminder to extend a bit of extra gratitude (and patience) to your CPA—after all, in a world of financial complexities, they're working harder than ever to keep the numbers (and stress levels) in check.

About Dark Horse CPAs

Dark Horse CPAs provides integrated tax, accounting, and CFO services to small businesses and individuals across the U.S. The firm was founded to save small businesses (and their owners) from subpar accounting and tax services and subpar client experiences. These small businesses are Dark Horses among their larger and more well-known competition. Being a Dark Horse CPA means advocating for small businesses by bringing them the tax strategies and accounting insights previously reserved for big business. Get a quote today.