Twin Cities accounting firms are tackling workforce shortages, focusing on service
Writer: Pablo Marquez
June 2025 — The Twin Cities is facing a serious accountant shortage, prompting firms and universities to reassess the profession. This local trend reflects a national decline, with a large number of accountants and auditors leaving the profession over the past decade. Since 2019, the number of accountants in the United States has dropped by 16%.
With fewer students entering accounting programs, staffing challenges are getting worse. The shortage creates major difficulties for accounting firms and the businesses they serve, particularly public companies that risk penalties without adequate auditing support. Looser regulations may be needed to help address the issue, which also threatens stakeholders like investors, regulators, and lenders who depend on audited financial reports.
In order to address the accountant shortage challenge, Minnesota recently passed legislation offering alternative pathways to becoming a certified public accountant (CPA), moving away from the traditional 150-credit-hour requirement. Starting January 1, 2026, candidates can qualify by either earning a bachelor’s degree and gaining two years of experience, or by obtaining a master’s degree with one year of experience—both still requiring passage of the CPA exam. The existing 150-hour route will remain available until June 30, 2030. This legislative change follows Minnesota’s early efforts in 2023 to reform CPA licensure and aligns the state with at least 13 others that have adopted similar measures to address workforce shortages in the profession.
To delve deeper into the trends that are currently shaping the accounting industry in the Twin Cities, Invest: met with Dane Boeckermann, principal and CEO of BGM, and Tom Johnson, partner and CEO of Mahoney CPAs and Advisors. Their insights offer a first-hand look at CPA workforce shortages, leveraging AI and technology, and the types of services driving growth, demand, and profitability for their respective firms.
Could you give us an overview of the accounting industry in the Twin Cities at the moment? Are there any key trends or market dynamics we should be aware of?
Dane Boeckermann: Our industry is seeing significant consolidation. Private equity entered our space for the first time in the last three years. Our competitors continue to sell to private equity firms and larger organizations.
Accounting firms are redefining their client base. Clients are moving from top-tier firms to lower tiers. Firms are categorizing A and B clients while pushing C and D clients downward. This creates an opportunity – large firms’ C/D clients become A/B clients for others. Firms are reassessing their ideal client base.
Our industry has faced a CPA shortage for the last several years. Hiring was extremely difficult in 2023-2024, though this is easing slightly. The market is shifting towards an employer’s market.
Tom Johnson: Workforce trends are a major concern. The pipeline of new accountants is declining, which affects both public CPA firms and private organizations. Fewer students are pursuing accounting degrees, and college enrollment in general has decreased. There is also the added challenge of the 150 credit education requirement to become a CPA, which is equivalent to a five-year degree, compared to the four years required for many other degrees. This extra year represents an additional financial burden and a delay in entering the workforce.
In Minnesota, efforts are underway to adjust this requirement, potentially reducing it to four years or introducing alternative pathways to qualify for the CPA exam. Additionally, compensation for new CPAs may not adequately reflect the extra time and cost invested in their education. Beyond these factors, the perception of accounting as a profession needs to evolve. Historically, accountants were seen as number crunchers, but the role has become much more dynamic. Today, we focus on advising clients, improving their businesses, and creating value. Our firm is actively working with colleges to communicate these changes and highlight the evolving nature of the profession.
Given your broad range of services, which of these are currently the main drivers of growth, demand, and profitability?
Boeckermann: Our growth right now is being driven by our wealth management practice. We’re seeing opportunities as clients are beginning to sell their business, creating the chance for us to manage their assets and cash after the transaction. We’re seeing growth in our M&A transaction and brokerage advisory services, as well as our fractional CFO services. As more companies start to grow and need more analytical resources but aren’t able to hire a CFO, we can help guide the financial side of their business. Additionally, we’re also seeing growth in the new tax incentive practice service line that accounting firms historically outsourced to third-party providers.
Johnson: Our advisory services have seen the most growth over the past three to four years. While compliance work, such as assurance and tax services, remains essential, advisory services go beyond that. For instance, we have a strong focus on real estate, where we advise developers on new projects. With rising interest rates and increasing operating costs, underwriting and forecasting for new developments have become more challenging. We help ensure these projects are viable.
Another growing area is outsourced CFO and accounting functions. Many small to medium-sized businesses struggle to fill CFO positions due to the accounting shortage. We step in to provide these services, offering insights into their financials and helping them improve their operations. Advisory services, in general, are moving toward analyzing data rather than entering it. This shift aligns with technological advancements, such as AI, which automates data entry. As a result, our staff are trained to interpret and utilize data right from the start of their careers.
How is the firm leveraging technology and innovation in the accounting industry?
Boeckermann: We are spending time talking about AI, as is everybody else. We’ve looked at all the AI initiatives that we could do in-house to continue to accelerate the timing of tax work. That’s where the offshoring comes into play, where we can use that team to help with the preparation of the tax work. AI and offshoring will make that a much more efficient process for clients, especially around tax deadlines. We’re using tools like AI note takers to speed up the process of moving information to other service providers inside the organization. The key is, in our organization, you have one lead relationship, but then you have service providers in specific areas. If people can’t attend all meetings now with some of the AI tools, we’re able to move that information much more fluid to each person versus doing a follow-up discussion. We’re continuing to find ways in AI to automate some of our processes internally. Lastly, we’re also looking at possibly providing AI services for clients, helping consult them on how to utilize it inside of their business. We’re not quite there yet, but it is something we’re focused on in 2025.
Johnson: Technology is an exciting topic because there are endless solutions and new startups emerging. We are continuously filtering through these options and implementing new tools. For example, we have integrated AI to help our assurance teams analyze data. We are also using Power BI and have implemented new audit software. These technological advancements help us provide better services to our clients. On the client-facing side, we offer platforms and portals that include electronic signatures, making the process more convenient. With fewer clients visiting our offices, the majority of interactions now occur remotely; however, we still like to get out and see everyone in person. Everything is digital, and we focus on ensuring that the technology we provide is user-friendly and efficient for our clients.
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