UpTrajectory Review

Nellie Akalp's piece in CPA Practice Advisor argues that accounting firms looking to grow should stop measuring themselves by headcount or service-menu breadth and instead get disciplined about distinguishing work that genuinely requires a CPA's judgment from work that doesn't. The context here matters: compliance work — entity formations, annual reports, registered agent duties, franchise tax filings — has historically been treated as a reliable, if low-margin, anchor service at small and mid-sized firms. Akalp's contention is that the anchor has become a drag, and that the firms pulling ahead are the ones redesigning how that work gets done rather than simply hiring more people to do it.

For a small-firm owner or solo practitioner, this is not an abstract staffing question — it is a margin question. Compliance work is deadline-driven, repetitive, and increasingly price-pressured by software platforms and low-cost online providers. If you are billing hours for work a client can get done for $99 through a formation service, you are competing on price in a market you cannot win. The piece's framing suggests that the answer is not to drop compliance work but to change its delivery model, so the firm keeps the client relationship and the recurring revenue without burning senior staff hours on tasks that don't require a CPA license.

What is genuinely useful here is the emphasis on discernment rather than automation for its own sake. The accounting trade press has spent years telling firms to 'leverage technology,' often without distinguishing between tasks that software handles well and tasks where a professional's judgment is the actual product. Akalp's framing — recognize which work requires your expertise — is a more honest filter. Where we would push back slightly is on the implication that this discernment is straightforward. In practice, the boundary between 'routine' and 'expert' work shifts constantly, and firms that offshore or automate the wrong tasks can damage client trust in ways that are hard to recover.

The second-order effects cut in a few directions. Clients who currently pay a firm $400 for an annual report filing may not care who processes it, but they will notice if the price drops or if errors creep in. Junior staff and paraprofessionals face the sharpest displacement: the compliance work that once trained new hires is exactly the work being systematized or outsourced, which raises a real pipeline question for the profession. On the flip side, firms that get this right free up their most experienced people for advisory work — cash-flow planning, entity structuring, tax strategy — which is where both margins and client loyalty actually live.

The practical move for a firm owner is to audit last quarter's compliance engagements and honestly tag which tasks required licensed judgment and which were process execution. That exercise almost always reveals hours that can be restructured, delegated, or handed to a specialized provider without any loss of quality. Watch whether the major practice-management platforms start building more native compliance tooling, and whether state filing requirements shift in ways that further commoditize the work. The firms that treat compliance as a relationship anchor rather than a revenue center will be the ones with the capacity to sell the work that actually requires them.

Takeaway: Audit your compliance engagements to separate judgment work from process work, then restructure or delegate the latter before it erodes your margins.