Top Challenges For Accounting Firms In Australia
Most accounting industry challenges in Australia come back to the same equation: more compliance work, fewer experienced people to do it, and clients who expect faster answers than they did five years ago.
The top issues for accounting firms in Australia fall into seven areas, and the pressure shows up differently depending on the size of the practice. A sole practitioner feels it as a personal workload problem. A five-partner firm feels it as turnaround, write-offs and staff churn. But the underlying causes are shared, and so are most of the responses.
Here’s the short version of the challenges facing accounting firms in Australia before we get into the detail:
| Challenge | What it costs your firm | What firms are doing about it |
|---|---|---|
| Talent shortage | Longer hiring cycles, senior staff doing junior work, capped growth | Redesigning roles, widening pathways, adding offshore capacity |
| AI and technology | Paying for tools nobody uses, or falling behind on efficiency | Choosing tools for specific jobs, training staff, keeping human review |
| Regulatory change | Unbillable hours spent monitoring, interpreting and updating processes | Assigning ownership, standardising workpapers, planning early |
| Client expectations | Fee pressure, scope creep, clients shopping around | Clear scope, proactive contact, moving up the value chain |
| Remote and hybrid teams | Weak supervision, slower development of juniors, culture drift | Written expectations, visible workflow, structured review |
| Cyber risk | Breach costs, notification obligations, reputational damage | MFA, patching, staff training, vendor due diligence |
| Capacity pressure | Errors, missed deadlines, burnout, lost clients | Workflow standardisation, automation, offshore support |
Why Is Australia Facing An Accountant And Talent Shortage?
The shortage is formally recognised. Tax accountants and external auditors were listed on the 2025 Occupation Shortage List, and CA ANZ has recommended that general accountants, taxation accountants and external auditors all be rated in national shortage for 2026. Jobs and Skills Australia had not released the 2026 list as of early October. CA ANZ has identified external auditors as in shortage for five years running and tax accountants for three.
Its member survey found undersupply or severe undersupply across general accountants, taxation accountants, external audit and internal audit roles, with the main reason given for unfilled vacancies being a lack of experienced professionals.
The time it takes to fill a role tells the same story. CA ANZ’s member survey found external auditors took the longest to fill, at an average of 113 days, with general accountants at 79 days and tax accountants at 77 days. That’s a full lodgement season with a hole in your team.
Three forces sit behind it. The graduate pipeline has thinned, as fewer students choose accounting and fewer choose public practice when they do. Experienced accountants are retiring or moving into commercial roles with better hours. And the firms that can pay most, including the Big Four and large corporates, take first pick, which leaves suburban and regional practices competing for whoever is left.
Part of the problem is what the job looks like from the outside. A graduate weighing up public practice against a corporate finance role sees long hours in busy seasons, repetitive compliance work and a progression path measured in years. Firms that have had recruitment success tend to be the ones that changed the offer: genuine flexibility, exposure to client work early, a clear path to the next level, and less time on data entry.
Our article on the accountant shortage in Australia covers the causes and the hiring response in more detail. The practical point for this article is that recruitment alone can’t close the gap, because every firm is fishing in the same shrinking pond.
How Are AI, Automation And Technology Challenging Accounting Firms?
AI has moved quickly from novelty to normal. A survey of accounting and audit leaders reported that 68 per cent of Australian firms have embedded or piloted AI in their accounting and audit strategy, with the main barriers being a lack of technical talent, cost of implementation and regulatory uncertainty.
Your clients are moving more slowly. CPA Australia’s business technology research found that just 22 per cent of Australian businesses had adopted AI to a moderate or significant extent, compared with 41 per cent across other markets surveyed, and a third had never used it. That gap is an opportunity, because firms that understand the tools can advise on them.
The real challenge isn’t whether to adopt. It’s adopting without creating new problems:
- Tools without a job to do. Software bought because it was impressive, then abandoned once the trial ends.
- Integration. New software that doesn’t talk to your ledger or practice management system creates double handling.
- Review risk. AI-generated workpapers and client summaries still need a qualified person checking them. Professional judgement isn’t delegable.
- Data and confidentiality. Client data entered into public tools is a confidentiality problem, not just a technology preference.
- Training time. Staff need hours to learn new systems, and those hours come out of billable time.
The firms doing this well start with a specific job, such as document collection, bank coding or workpaper preparation, prove it works on one service line, then roll it out. They also write down what staff may and may not put into AI tools.
How Are Regulatory, Tax And Compliance Changes Affecting Accounting Firms?
Compliance change is constant, but the past two years have been heavier than usual.
Payday super changed how employers pay superannuation, the AML/CTF regime was extended to accountants and other professional services from 1 July 2026, and the Tax Practitioners Board gained stronger sanctions powers on 1 October 2026 under changes to the Tax Agent Services Act, first consulted on in 2025.
Each of those lands on firms twice: once as an internal obligation, and again as client work that has to be explained, scoped and often absorbed.
The cost is mostly invisible because it isn’t billed. Someone has to read the guidance, work out what it means for your client base, update templates and engagement letters, brief the team, then answer the client emails that follow. In a small practice, that someone is usually a partner.
A few habits make it manageable. Give regulatory change an owner, so one person tracks ATO, TPB and professional body updates and reports back at a set time each month rather than everyone half-watching. Standardise your workpapers, because when a rule changes you then update one template instead of 40 files. Scope new obligations as work rather than favours: if a change means real hours, it belongs in the engagement letter and the fee. And move early on dates you can see coming, so a known deadline doesn’t land in the same fortnight as the lodgement peak.
How Are Changing Client Demands And Buyer Behaviour Affecting Accounting Firms?
Clients arrive with more information and less patience than they used to. They’ve asked a chatbot before they’ve asked you, their software has produced a report they half understand, and they expect a reply in a day rather than a week.
They also compare. Cloud accounting has made it easy to see what other providers charge and switch when the relationship feels transactional. At the same time, many clients are dealing with their own cost pressure, which shows up in your firm as fee resistance, later payment and more questions for the same fee.
The practices handling this well have changed a few things. They contact clients before clients contact them, and a short quarterly check-in heads off most of the “why didn’t you tell me” conversations.
Those practices are also explicit about scope, saying what’s included, what isn’t, and what an extra piece of work costs before doing it. They bill advisory work as its own service, so forecasting, structuring and cash flow support carry a fee rather than being thrown in with the tax return. And they explain what sits behind the compliance work, because clients who can see the review, the checks and the judgement involved argue about price far less often.
How Can Firms Manage Remote, Flexible And Hybrid Workforces?
Most firms now offer flexible or hybrid work because they have to. Candidates ask about it in the first interview, and a practice that says no stops making the shortlist.
Supervision is what gets harder. Every file still carries a partner’s name, so someone has to see the work before it goes out, and that is more difficult when the person who prepared it is at home on a Thursday.
Juniors feel it most. A question that would have been answered across a desk in ten seconds now waits in a queue. Work in progress is harder to see. And new staff pick up less of the unwritten reasoning that used to come from sitting near someone senior.
What works is mostly structure. Write the expectations down, covering core hours, response times, office days and how urgent work gets flagged, so nobody is guessing. Make the workflow visible, because if job status lives in someone’s head, distributed work will fail, and this is where practice management software earns its keep.
Build review points into the middle of a job rather than the end, so juniors get feedback while it still means something. And keep security tight, since home networks, personal devices and shared logins are where flexible work quietly turns into a data risk.
Why Is Cybersecurity And Data Protection A Growing Challenge For Accounting Firms?
Accounting firms hold exactly what attackers want: tax file numbers, bank details, identity documents, payroll files and financial statements for dozens or hundreds of entities, usually behind smaller defences than a bank.
The volume of incidents keeps climbing. The OAIC received 1,205 data breach notifications in the 2025 calendar year, the highest annual total since the scheme began in 2018 and an 8 per cent increase on the previous year, with cyber hacking the primary cause.
Most incidents aren’t sophisticated. They come from a staff member clicking a convincing invoice, a password reused across systems, an unpatched server, or a third-party tool with access nobody reviewed.
The basics still do most of the work:
- Multi-factor authentication on email, practice software and remote access, without exceptions for partners.
- Patching and updates on a schedule, including the software you forgot you were running.
- Staff training on phishing and payment redirection, repeated often enough to stick.
- Backups you’ve actually restored from, plus a written incident response plan with who calls whom.
- Vendor due diligence. Every provider with access to client data, from your document portal to an outsourcing partner, is part of your risk profile.
That last point deserves a word, because it’s often treated as a reason to avoid outsourcing. Handled properly, it works the other way. A provider that works inside your systems, applies its own access controls and signs confidentiality agreements can give you more control over client data than an under-resourced internal setup does. The test is the same one you’d apply to any vendor: what certifications do they hold, who can see the data, and what happens to it when the engagement ends.
How Can Accounting Firms Manage Workloads, Deadlines And Capacity Pressure?
Capacity pressure is where all the other accounting firm challenges show up. Work concentrates around BAS quarters and the lodgement program, staff are already stretched, and the extra client you signed in March is now an extra file in October.
Of all the problems facing accounting firms in Australia, this is the one that compounds fastest. Left alone, it gets expensive. Errors go up, review time blows out, deadlines slip, and good people leave for a job with fewer 7pm finishes. Asking the team to absorb it for one more season is not a plan, it’s a deferral.
What actually shifts the load:
- Forecast the peak. Map jobs by due date and hours needed, not by whoever asks loudest.
- Standardise the repeatable work. Same checklist, same workpapers, same order, every time. It makes review faster and delegation safer.
- Automate the mechanical steps. Bank feeds, document collection, reminders and data extraction.
- Split production from judgement. Preparation, reconciliation and workpaper assembly can be done by someone else. Review, advice and client conversations stay with you.
- Move preparation offshore. A qualified team working inside your own systems takes on bookkeeping, workpapers and returns as ongoing work, which frees your own people for review and advice rather than production.
That last point is what took one Perth sole practitioner from missing lodgement deadlines to taking on new clients. Nothing about the work changed. What changed was who did the preparation and what he did with the time it freed up.
Does Accounting Still Have A Future In Australia?
Yes, but the shape of the work is changing. Data entry, coding and basic reconciliation are being automated. Interpretation, judgement, regulatory knowledge and client trust aren’t, and demand for those is rising as the compliance load grows.
We’ve covered this in detail in our article on AI, smartsourcing and the future of accounting in Australia. The likely picture is a smaller amount of manual work inside firms, more automation, more distributed teams, and more revenue from advisory.
Software is taking over more of the compliance work, and clients will expect the price to follow. If compliance is all a firm sells, there is nothing to make up the difference. Firms that use that work to understand the client have advice to sell on the back of it, and advice is still priced on judgement rather than hours.
The skill mix shifts too. Technical ability stays essential, but the accountants who do well combine it with the ability to explain, to use the tools, and to manage a client relationship that a piece of software can’t replicate.
Can Outsourcing Help Accounting Firms Overcome Capacity And Staffing Problems?
For process-driven work, yes. Bookkeeping, payroll processing, BAS preparation, workpapers, year-end financials, tax returns and SMSF compliance can sit with an external team, with review and sign-off staying in your firm.
It helps most with three of the accounting industry issues in Australia covered above. It adds capacity without a local hire you may not be able to make. It gives repeatable work a consistent, review-ready standard. And it frees your qualified staff for the advisory work clients will actually pay more for.
It isn’t a cure-all, though, and it’s worth being honest about that. Outsourcing still takes management time, a clear brief and a review process. Poor-quality work costs more to fix than it saves. And your obligations don’t transfer: supervision, client confidentiality and the quality of the final product stay with your firm.
Before choosing a provider, check:
- Who does the work, what qualifications they hold and how much Australian experience they have.
- Who reviews it before it reaches you, and how many stages that review has.
- Where client data lives, who can access it, and what security certifications the provider holds.
- How communication works, including query turnaround and who your contact is.
- What the exit looks like, including notice periods, exit fees and handover of files.
A Toowoomba firm led by a partner with exacting standards is a good test case. He’d tried offshore providers before and spent more time correcting the work than doing it himself. What changed was the review process behind the work, not the idea of outsourcing. For a fuller breakdown of models, costs and risks, read our guide to outsourced accounting services.
Capacity is the challenge behind most of the others. Send us one job, a BAS, a set of workpapers or one tax return, and see what review-ready work looks like before you commit to anything.
