The challenges CPA firms face get published as one long list, and that is what makes the list useless. Some items on it are conditions you did not create and cannot change this year. The rest are results of decisions your own firm made, and those are the ones that move. Sort your list into those two piles before you plan anything, because only one pile pays back a year of effort.
The Two Kinds of Challenges CPA Firms Face
A constraint is a condition set outside your firm: the supply of experienced staff, the pace of the tax code, what your market will pay. You can plan around a constraint. You cannot move one this year. A design problem is an outcome your own decisions produce: what you charge, what you agreed to deliver, who reviews the work, when it arrives, who owns the practice next. Those move as fast as you decide.
The profession shares a headline and not much else. In the AICPA Private Companies Practice Section's 2026 CPA Firm Top Issues Survey, changes in technology and the rising adoption of AI ranked in the top two for five of the six firm sizes, with firms of between two and 10 employees the exception at third (Journal of Accountancy). The 629 participants responded online between April 20 and May 22.
What ranked first is where the agreement stops. Tax law complexity ranked first among solo practitioners and firms with up to 10 employees, hiring experienced staff ranked first for the group with between 11 and 30 workers, next-gen firm leadership development ranked first between 31 and 100, and tech adoption ranked just ahead of changes in technology and AI between 101 and 500 employees, with that order reversed above 500 (Journal of Accountancy).
Read the gradient as an instruction rather than a ranking. What sits at the top of your list is largely a function of where your firm sits, so the useful question is not which challenge is biggest in the profession. It is which of yours your own decisions are producing.
How to Tell Which Pile Your Pain Belongs In
Three checks separate them, and none of them needs new data collection.
Remove the constraint on paper. Assume the outside condition vanishes tomorrow, then ask whether the pain goes with it. If salaries stopped rising tonight and your realized fee still would not cover the work, salary inflation was never your problem. Price was.
Watch what recurs on a calendar you control. A difficulty that reappears every April, after the constraint behind it was removed, is a design problem wearing an industry costume. The hire arrived, the season still broke, so the shape of the work is doing it.
Look at the spread inside your own size band. In the 2025 National MAP Survey, firms with $750,000 to $1.5 million in net client fees, the survey's term for firm revenue, reported median net remaining per partner of $233,563, while the band's top performers reached $382,345 (2025 National MAP Survey Executive Summary). Net remaining is net client fees minus expenses before partner compensation comes out, and top performers are the quarter of firms ranking highest on exactly that measure. Same band, same profession, and a gap that wide is not explained by the market both firms sit in.
Where the Familiar Challenges Already Have Answers
Eight items on the standard list already have a settled treatment.
The accountant shortage is real, and the measurable part of it sits in the route into the profession rather than in any national count of empty desks, which is what the accountant shortage reads off the licensure pipeline. Whether that national trend explains your own open seat is a separate and local question that your hiring records already answer, and the accounting talent shortage runs those checks. Burnout is measured on a person, but the research points at the job, so accountant burnout works through the firm decisions that produce it. Capacity fails because the plan gets built on annual hours while the work arrives inside a short season, which is why capacity planning counts by week and by role instead.
New revenue has only a few real sources, and the useful question is which one your firm can move this year, which is the order growth strategy works out. Security duties attach to the work you do rather than to the size of your firm, and cybersecurity for CPA firms sets out what the FTC Safeguards Rule then requires in writing. The risks that decide whether outsourcing works sit on your side of the desk rather than the vendor's, starting with the duties that never transfer, and outsourcing challenges names the decision each one forces. If the next seat you open is whichever one just went empty, you have a replacement habit rather than a plan, and hiring strategy sets the seat list and the order.
The rest of the list has no settled answer waiting.
Partner Succession and Ownership Transition
For most firms, succession is not a plan document. It is one person. In the 2025 National MAP Survey the median responding firm had 2 equity owners and 2 CPAs, and 64% of respondents had been in business 21 or more years (2025 National MAP Survey Executive Summary). That is a long-established client base with almost nobody to hand it to.
The pressure registers first in firms just large enough to have a bench. Next-gen firm leadership development ranked as the top issue for firms with between 31 and 100 employees in the 2026 CPA Firm Top Issues Survey (Journal of Accountancy).
The transition itself is regulated, and more narrowly than most partners expect. A tax return preparer, unless they count as a preparer solely because they provide auxiliary services, a group that includes tax software developers and Authorized IRS e-file Providers, may compile and maintain a separate list containing solely items of tax return information. The permissible items are the names, mailing addresses, email addresses, phone numbers, taxpayer entity classification and income tax return form number of taxpayers whose returns that preparer has prepared or processed. Under section 301.7216-2(n), the compiler may not transfer that list, or any part of it, to any other person unless the transfer takes place in conjunction with the sale or other disposition of the compiler's tax return preparation business.
Due diligence before a proposed sale counts as being in conjunction with that sale and does not itself constitute a transfer, provided it is conducted pursuant to a written agreement that requires confidentiality of the tax return information disclosed and expressly prohibits further disclosure or use for any purpose other than that related to the purchase of the business (section 301.7216-2(n)). A buyer who acquires the list then falls under that same paragraph with respect to it. So the confidentiality agreement is not deal hygiene. It is the thing that keeps a conversation with a potential buyer from being a prohibited transfer.
The other half of succession is the half nobody schedules. Section 301.7216-2(r) permits disclosure of tax return information, in the event of the incapacity or death of a tax return preparer, for the purpose of assisting the preparer or his legal representative, or the representative of a deceased preparer's estate, in operating the business. Anyone receiving tax return information under that paragraph is a tax return preparer for purposes of sections 7216(a) and 6713(a), which is worth knowing before you name someone in a continuity arrangement.
Partner ages are a constraint. Whether a second licensee is being trained inside the firm, whether the buy-in is priced so a younger partner can fund it, and whether an incapacity arrangement exists in writing are design, and all three are decidable this quarter. Who may own a CPA firm is a separate limit, set by your own state's version of the Uniform Accountancy Act, and that limit and the outside-sale market are both covered in growth strategy.
Fee Pressure Against a Payroll That Moves Faster
Fee pressure usually gets described as clients resisting increases. The number that matters is the gap between what an hour of your firm's time earns and what it costs.
In the 2025 National MAP Survey, the median net hourly billing rate rose 6.9% over two years to $170 from $159, while over the same two years median compensation rose 15% to $99,000 for managers with 6 to 7 years of experience and 11% to $77,364 for senior associates with 4 to 5 years (2025 National MAP Survey Executive Summary). Price moved slower than the pay of the people doing the work.
The gap is wider one grade below the manager. The average hourly billing rate for senior associates rose 3% over those same two years, to $155, while the manager rate rose 10% to $198, against pay rises of 11% and 15% (2025 National MAP Survey). Senior associates do most of the preparation on most files, so the gap shows up in the margin on ordinary work rather than on the unusual engagement.
Over a longer window the picture reads better. The gains in the net hourly billing rate add up to $33 per hour over four years, a 24% rise since fiscal year 2020 (2025 National MAP Survey). A firm that has not moved its rate in that period has been absorbing the difference quietly.
How firms charge is changing, slowly. Hourly billing was still used by 63% of firms and a per-tax-form fee by 40%, while value billing at 30% was up five percentage points since 2022 and fixed pricing at 29% was up four points (2025 National MAP Survey). Among top performers the shift runs faster. Their use of fixed pricing had risen 18.4% since the previous survey, and they are more likely to require up-front deposits and retainers on services.
That matters because a pricing model decides whether a raise granted in November is funded by March. Realization, the share of the standard value of your time you actually collect, is the number that says whether a price is holding, and reading it against utilization is its own exercise.
The salary market is a constraint. Your rate, your billing model and your client mix are not.
Scope Creep and the Expectations That Feed It
Scope creep looks like good service while it is happening. A client asks for something small, someone helpful does it, and the engagement quietly becomes work the letter never described.
The liability record shows how far the paperwork lags. In 2024, 56% of tax claims asserted against CPA firms in the AICPA Professional Liability Insurance Program lacked an engagement letter related to the service underlying the claim (Journal of Accountancy). That figure comes from the CNA claim database behind the program, so it describes claims that were actually asserted rather than intentions reported in a survey.
An engagement letter earns its keep when it defines the scope of the service, the responsibilities on each side, the deliverables, any risk allocation and the fee. In one of the client disputes reported from that program, the letter the firm's tax software produced did none of those things, which left the firm with no written statement of what it was engaged to do (Journal of Accountancy). When scope changes, and on a live engagement it often does, the change belongs in a new letter or a written amendment before the work starts.
The objection to that is fair. Turning a small favor into a change order feels like a way to lose a client you have served for a decade. The workable version is to do the favor and paper it, so the record stays accurate even when you are being generous. What you cannot do is let the file and the letter describe two different engagements.
Nothing about scope is set outside your firm. It is the purest design item on the list, and the cheapest to fix.
The Pace of Regulatory Change, Counted as Workload
Every rule costs a firm twice: the work it creates, and the decisions it forces. The second cost is charged whether or not the rule survives.
Beneficial ownership information reporting under the Corporate Transparency Act is the clean example. An interim final rule in March 2025 removed the reporting requirement for US companies and US persons, and in August 2026 FinCEN issued a final rule making that permanent, adopting the exemptions set out in the interim rule and providing that information previously reported by US persons will be deleted. Foreign entities that are reporting companies still report beneficial ownership information for foreign individuals (Journal of Accountancy).
A firm that stood up a filing service for that regime, trained people on it and answered a season of client questions has paid for a requirement that no longer applies to its US clients. Nothing about that decision was unreasonable when it was made, which is the point. The expensive part of regulatory churn is rarely the reading. It is the commitment.
The pace is a constraint. When you commit is not. A rule still in flux can get a named review date and one person who owns watching it, rather than a build. A rule with a statutory deadline gets the build, because waiting on that one is not a plan. Telling those two apart is the actual skill, and it is a judgment your firm makes rather than one the calendar makes for you.
Technology and AI, Priced as a Decision Rather Than a Tool
Firms are not short of confidence about technology. In the 2025 National MAP Survey, 94% of firms planned to raise overall tech spending by up to 20% over the prior year, 35% had no specific budget for AI and automation, 61% said they had raised fees to factor in higher technology investments, and 40% said they had not worked out how to track efficiencies from technology advances (2025 National MAP Survey Executive Summary). Together those describe spending that is reaching client invoices faster than its benefit is being measured.
The decision that gets skipped is what the freed hour is for. Among the two thirds of firms with plans for freed-up capacity, 45% would reduce hours to improve work-life balance, 40% would provide more advisory or consulting services, 39% would expand client load without adding staff, and 20% would offer new services or niche specialization (2025 National MAP Survey). Those are four different firms. A tool bought without choosing one of them hands the time back to whoever happens to be idle.
The firms furthest along treat it as posture before procurement. Among top performers, 37% considered themselves proactive in their approach to AI and automation adoption, against 24% of respondents overall (2025 National MAP Survey). Whether the answer to a capacity gap is software or people is a separate question, and the comparison between AI and offshore capacity works it through.
Sort Your List Before You Work It
Write your firm's challenges in two columns. The left column holds what the market set: the supply of experienced staff, the pace of the tax code, what clients in your area will pay. Plan around those and stop budgeting energy to change them. The right column holds what your firm decided: the rate, the scope, the billing model, who reviews, who owns the practice next, and what a freed hour is for. That column is this year's work.
Then take one item from the right column, name the number that would move if you fixed it, and set the date you will read that number. One decision, measured, beats a list of ten discussed.
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