Why Is Accounting Still Like This

The Intelligent Ledger — Paul Peterson

On Saturday I checked in on one of our best tax partners. Mid-30s, three kids, the kind of person you build a firm around. I asked how this season compared to last year. In my head I was certain she’d say better. We’ve invested real money in software and workflow tools over the past several years.

She told me the compression feels worse, not better. And then almost as an aside, that she knows it’s temporary.

She wasn’t complaining, but rather just stating it as fact. That’s what got me.

The Equation Is Broken

I’ve been asking myself all weekend how it’s still like this. We’ve been investing in this profession for years. The answer is in the numbers.

The federal tax code was 1.4 million words in 1955. It’s over 10 million today. Americans spend nearly 8 billion hours a year on tax compliance, and that number grew by more than a billion hours in a single year. Right now approximately 19 million individual returns are sitting on extension. Meanwhile 340,000 accountants left the profession during COVID, a 17% drop in the total workforce. Enrollment has been falling for years.

Demand up. Supply down.

And the tools we were sold during that stretch? Honestly, a lot of them were just crap. For decades the software sold to accounting professionals demanded that you learn it rather than making you better at your job. You didn’t adopt tools that elevated your thinking. You became fluent in their quirks, their menus, their workarounds. You mastered the software. The software didn’t work for you. The intelligence was never in the tool. It was always in us. And we spent most of our time feeding these systems our expertise rather than applying it.

This wasn’t for lack of trying. Botkeeper raised close to $90 million trying to solve this problem. They were genuine pioneers, founded in 2015 before most people were even talking about AI in accounting. They built something real. By the end of last year their platform could autonomously reconcile accounts and code over 80% of transactions with 98% accuracy. They were two months away from launching a voice-activated assistant when they shut down in February. The technology got there. The business couldn’t survive long enough to see it.

That’s not a failure of vision. That’s how hard this problem actually is.

This Isn’t Just Our Problem

And it doesn’t stay inside the firm. Her clients feel it too.

Think about what this looks like for a typical business owner. Their S-corp can’t close its books by March 15 so it files an extension. Every partner and shareholder downstream now can’t file their individual return. They need to make an estimated tax payment but they don’t actually know what they owe yet so they guess. Distributions get held. A retirement contribution deadline passes with incomplete information. For the ones whose Medicare premiums or ACA coverage depend on prior-year income it doesn’t stop there either.

Nobody in that chain did anything wrong. The accountant worked throughout the weekend. The return got filed. The system just doesn’t have enough people or tools to process the complexity being asked of it.

What Private Equity Got Wrong

Here’s what makes me most frustrated. At the exact moment the profession needed to invest in its people and double down on the mission, most of the industry went the other direction.

Private equity moved into accounting in a big way over the past several years. Valuations went up, outgoing partners did well. I understand the business logic. But watch what happened when PE moved into hospitals and you start to see a pattern worth paying attention to.

Studies found that after PE acquired hospitals, patient complications went up 25%. Hospital assets declined by nearly a quarter in just the first two years after acquisition, while non-PE hospitals were growing theirs. Prices went up. Staffing went down. Some facilities closed entirely. The model is straightforward: acquire, cut costs, sell within a few years at a profit. The financial outcome works. The mission doesn’t always survive it.

I’m not saying accounting firms are hospitals. The stakes are different. But the underlying dynamic is the same. When the dominant question becomes how do we lower the cost of delivery, the answer is almost always some version of reducing the humans who do the work. In accounting right now that answer is offshoring. I get blasted with messages about it daily. And look, I get it. Margins matter. Scalability matters.

But my partner is still telling me the compression feels worse. Moving work somewhere cheaper doesn’t fix a broken equation. It relocates it. And I’m tired of pretending otherwise.

We have said no to PE money. I want to be direct about that. Wiss is independent and we intend to stay that way. Our partners are young, energetic, and genuinely excited about where this profession is going. Nobody here is looking for a golden parachute. We have too much pride in what we’re building and frankly too much left to prove. The firms that cash out now and hand the keys to someone whose primary obligation is to a returns target are making a bet I’m not willing to make with our people or our clients.

The firms that are going to win the next decade are not the ones who figured out how to deliver the same thing for less. They’re the ones who figured out how to deliver something fundamentally better. That requires staying in the game long enough to actually build it.

What I Believe Is Coming

I believe AI-enabled tools, designed the right way, will actually rebalance this. Not by automating tasks but by multiplying what a skilled accountant can do. The relationship between the professional and the tool finally inverted. You bring your expertise, your judgment, your knowledge of the client. The tool amplifies it. For the first time the intelligence is actually in the tool.

But I want to be honest about what getting there requires, because there has been too much BS in this industry.

Changing workflows that run on muscle memory is hard. For a real stretch of time teams will be running two systems at once: the old way that works and the new way that isn’t quite there yet. Training on new tools on top of an already full plate. Moments where the new thing fails and the old workaround has to carry the day. That transition period has a real cost and it lands on top of already-stretched people. The firms that make it through are going to be the ones who were straight with their teams about that upfront. Not the ones who sold it as seamless.

We are approaching it in focused 30-day sprints. Learn what works, adapt, go again. Not sweeping multi-year transformations that sound impressive but that nobody can sustain.

Near. Not There.

I keep coming back to that. By the end of 2027 I believe accounting looks fundamentally different. I’m putting that on the record.

But that’s not where we are today. The people living through April are in the gap between the model we’re leaving and the one we haven’t finished building. Every tool we are building at Wiss Labs has to answer one question: does this actually change the experience for the people carrying the load? Not eventually. In a way they can feel.

Paul Peterson is CEO of Wiss & Company and co-founder of WissLabs. He writes about accounting, AI, and the future of the profession.