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How Florida CPAs Beat Back a Bill That Would Have Erased Their Own Licensing Board

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Shelly Weir stood in the rotunda of the Florida Capitol building. The House floor was on one side, the Senate floor on the other. The clock was ticking toward midnight on the final day of the legislative session. Shelly was physically pulling senators off the floor while CPAs across the state called and texted lawmakers. These were college roommates, siblings, fellow churchgoers, basically anyone with a personal connection to a senior member of the Senate.

Around her, realtors, engineers, and harbor pilots were lined up too, all fighting for their professional lives inside the same 550-page bill. “If there’s one lifeboat,” she recalls thinking, “I’m getting on it. Good luck to you people.”

That was the scene at the end of Florida’s legislative session, and it shows just how close the CPA license came to being dismantled.

On this episode of the Earmark Podcast, host Blake Oliver sits down with Shelly, president and CEO of the Florida Institute of CPAs (FICPA), for her first live interview about a two-year battle most of the profession has never heard about. The legislation she and her team fought would have eliminated Florida’s Board of Accountancy, wiped out continuing education requirements, and paved the way to eliminate licensure education requirements.

FICPA beat it twice.

What’s remarkable is how they won. The strongest defense wasn’t digging in, or what Shelly calls “the agent of no.” It was showing up as the efficiency experts CPAs claim to be. By combining a hard-nosed commerce argument with a genuine willingness to modernize the profession’s outdated rules, FICPA turned an existential threat into an opportunity to reform accounting on its own terms.

The 550-Page Threat That Almost Changed Everything

To understand what FICPA faced, you need to know how Florida makes laws. The state legislature meets for just 60 days a year. As Shelly puts it, “for 60 days, it’s fast and furious. That’s when you get bills passed, or you don’t.”

The warning signs had been there for years. “Anytime you have a piece of legislation that is this significant, there are normally signals it’s coming,” Shelly explained. “There are chess pieces that get put onto the chess board.” She’d been talking to her board and national entities about the threat for years before the bill actually dropped.

When it finally arrived in early April 2025, about halfway through the legislative session, it was a 550-page “behemoth,” in Shelly’s words. Accountants weren’t alone in this fight. The bill included architects, engineers, veterinarians, realtors, and harbor pilots (which, Shelly notes, are “really important in Florida”). The bill bundled them together with a single goal of eliminating their regulatory boards.

For CPAs, that meant three devastating changes. First, the Board of Accountancy would be gone. Second, all continuing education requirements would disappear. Third, it would clear the path toward eliminating licensure education requirements. “Everything we’ve spent the last few years talking about relative to 120- and 150-hours would go away,” Shelly explained. Instead, licenses would be awarded based only on work experience or on passing an exam.

The bundling of professions frustrated Shelly. “Respectfully, hairdressers are not the same thing as a CPA or an engineer.”

FICPA saw two distinct dangers. The immediate threat was breaking Florida’s mobility infrastructure. That’s the system that lets CPAs work seamlessly across state lines. That would cause damage “on day one.” The long-term danger was even worse. The license would either be eliminated or become “so degraded that it carried very little value.”

Why Lawmakers Wanted to Kill Professional Licensing

Shelly’s insight is crucial for understanding how FICPA fought back. Deregulation, she stresses, is bipartisan.

In red-leaning Florida, it’s about free-market enterprise. Republicans believe licensure creates too many barriers, too much red tape, and too much government interference. They want consumers to have more freedom of choice. They want more people to move to Florida and find work easily. They want more businesses to relocate there.

In blue and purple states, Democrats frame it as an issue of access and equity. If barriers are too high, they limit opportunities for disadvantaged groups. But the common thread between the two parties is the workforce. Everyone wants more people working and more businesses thriving.

“If you can take your CPA hat off for a moment, which I know is hard to do, you can understand where they were coming from,” Shelly said. She even acknowledges that “not all deregulation is bad and scary and ugly. There are a lot of deregulation proposals that, frankly, our profession and our license would be highly supportive of. We don’t want to be a barrier to entry. We’re the champions of efficiency.”

This particular bill, however, was “the most extreme version the profession had seen.”

After surviving the 2025 session by the skin of their teeth, FICPA had only a couple of months before facing the same threat again in 2026. They had to beat it twice, back-to-back.

The Two-Pronged Strategy That Saved the License

The bill moved at lightning speed. “From the time the bill was introduced until it passed the House floor was 18 days,” Shelly recalled. “It flew through three different committees, went to the House floor for a vote, and then got sent over to the Senate.”

FICPA knew early that the Senate would be their battlefield.

The resources they marshaled were impressive. Nine registered lobbyists worked the FICPA account, which included four in-house staff members (including Shelly herself) and an external firm they’d partnered with for 25 years. Two public affairs firms shaped their message in political trade journals. Voter polling projects studied constituent opinions. Members wrote letters, made calls, and traveled to Tallahassee.

But the smartest tactic was personal. FICPA hunted through its membership to find CPAs with genuine relationships with legislators. “We found college roommates, sisters, people that went to church together, anything you can imagine,” Shelly said. Why? “Hearing from a lobbyist is very different than hearing from, say, your own CPA on this issue.”

With these resources deployed, FICPA ran two strategies simultaneously.

First came the commerce argument. Florida’s system of mobility and practice privileges creates open borders for CPA work across state lines. It puts choice in consumers’ hands, which is exactly what deregulation advocates claim to want. So FICPA flipped the script. Pass this bill, and you don’t reduce red tape; you create it. “Florida’s going to be at a disadvantage,” they told lawmakers. “That’s not what you want.”

The argument “landed really, really well” and came up repeatedly in committee hearings.

The second strategy separated FICPA from every other profession in the bill. Instead of just defending the status quo, they modernized their own rules before the fight even started. “We asked ourselves before the bill even dropped: where and how can we, as a license, be more efficient while still upholding the integrity of our license and protecting the public?”

They examined everything from reciprocity and mobility to the licensure processes and introduced their own legislation to streamline it all.

Take reciprocity as an example. Currently, a CPA from another state must complete about nine steps to get licensed in Florida, including having their college transcript reviewed for specific courses. Shelly asked, “If they have a license in good standing from a board of accountancy that has a regulatory board, do we need to look under the hood and go through all of these different steps?”

Cutting that red tape “only helps people get to work easier and faster and lowers barriers,” which is exactly what legislators wanted, achieved on the profession’s terms.

Playing Offense and Defense at the Same Time

Shelly has a perfect analogy for what FICPA had to do. In Top Gun: Maverick, the pilots play “dogfight football” by running offense and defense simultaneously and trying to score while blocking linebackers coming after them. “That is the definition of what we’ve been doing over the past 12 months,” she said.

The key was avoiding becoming “the agent of no.” As Shelly explained, “I never want a legislator to see us walk in the door and be like, ‘Oh my God, here come the CPAs again, they’re going to complain about X, Y and Z.'”

Instead, the profession leaned into its identity as efficiency experts.

The Pathways initiative became powerful proof. The bill’s supporters argued that students learn more on the job than in the classroom, so why require education at all? FICPA didn’t have to argue theoretically. The profession had already created a work-experience pathway to licensure. It was a nationwide modernization effort states had rallied behind together.

FICPA could tell senators: we agree there should be freedom of choice, and here’s a pathway that prioritizes work experience. “It’s not an or, it’s an and. Let’s work together.”

That framing “landed very, very well” because it met lawmakers’ goals while protecting the system of commerce and the license’s integrity.

What made the difference was posture. FICPA was “the only profession in this particular bill that had taken a moment to self-reflect and taken a moment to modernize.” They were the only ones offering both sides a win.

The Midnight Drama and What’s Coming Next

Despite all the strategy, the fight came down to that single agonizing day, and it was the toughest of Shelly’s career. In Florida, any bill not passed by midnight on the session’s 60th day automatically dies.

On the final day of the 2025 session, with the House having already passed the bill, FICPA was “hanging on for dear life to prevent it from passing in the Senate.”

Standing in the Capitol rotunda, Shelly orchestrated a desperate defense. “We were literally physically pulling senators off the floor and just doing everything we could. I had every single CPA that personally knew one of the senior members of the Senate calling and texting and just physically pulling them aside.”

She credits Senator Joe Gruters, who is himself a CPA, as a crucial ally in that final stretch. Shelly calls him “the staunchest advocate for the profession.” The outcome stayed uncertain until the very end. The session ran “all the way to midnight,” and FICPA didn’t know they were safe until late in the evening.

But surviving twice doesn’t mean it’s over. “I do not think the issue of deregulation is going away. Absolutely not,” Shelly said.

Florida faces an election year with a new governor, speaker of the House, and Senate president coming. It’s “an all new deck of cards,” as Shelly puts it. She expects licensing reform task forces, reduction requirements, and especially the CPE issue to resurface in Florida and other states.

The CPE fight shows exactly what’s at stake. Shelly’s concern wasn’t that lawmakers wanted to examine continuing education. It was that they went straight to elimination. “They weren’t talking about modernization. They wanted to get rid of it altogether.”

FICPA isn’t opposed to CPE reform. “I think there’s a lot that we can do to modernize it, to make sure that the purpose of it is to make a more competent CPA,” Shelly said. But she insists any change must happen collectively across states, just like Pathways, so it doesn’t break the system of commerce.

Whether the board-elimination proposal itself returns is harder to predict. Fresh lawmakers create what Shelly calls “an amazing opportunity” to find common ground before a bill ever gets filed. But she won’t count it out. “That idea has been planted, and it’s landed. There are a lot of people who are still interested in that.”

The Playbook Every State Society Needs

FICPA’s survival story offers lessons that reach far beyond Florida. When faced with a bill that treated a CPA license as no more important than a cosmetology certificate, the instinct to dig in and fight everything would have been understandable and probably fatal.

What actually worked was the opposite. By combining a commerce argument that addressed lawmakers’ concerns with genuine reform of reciprocity and licensure rules, FICPA found common ground while still protecting the public and the integrity of the license.

The profession wins by acting like the efficiency experts CPAs tell their clients they are.

Deregulation is bipartisan and gaining momentum nationwide. Every CPA, EA, and bookkeeper has a stake in whether the license keeps its value. State societies stand on the front lines when these bills drop.

As Shelly put it, “pressure is a privilege.” The profession’s willingness to be efficiency experts rather than agents of “no” may determine whether the license survives the next wave.

This is Shelly’s first and only live interview on a two-year battle that barely made the national press. To hear the full strategy, the midnight drama, and her warnings in her own words, listen to the complete episode on the Earmark Podcast.

Accountants Rush to Adopt AI While Ignoring the Security Risks That Come With It

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Nearly nine out of ten accountants using AI report positive returns. But another statistic is more troubling. Over half of accounting firms have experienced data breaches recently, yet fewer than half have guidelines for how AI handles sensitive financial data. The productivity gains are real, but so are the risks we’re ignoring.

Blake Oliver, host of the Earmark Podcast, recently sat down with David Jani, Senior Content Analyst at Capterra, to unpack Capterra’s 2026 Accounting Software Trends report. The survey of 500 U.S. accounting managers shows the profession has moved beyond testing AI and into territory where the gap between adoption speed and security readiness is becoming dangerous.

 

The Productivity Gains Are Real (With a Catch)

AI in accounting has crossed from experiment to standard practice. More than half of accountants now use AI in their accounting software, and it appears across all company sizes, not just enterprises with big tech budgets. As David noted, “We’ve gone beyond the point of it being companies testing the water with this stuff.”

The most common uses for AI are chatbots and AI assistants, followed by data entry automation and fraud detection. AI is also making headway in predictive analytics, cash flow forecasting, smart invoicing, and bank reconciliation. David described it as “a coalescence around analytics and process-driven tasks.”

The 89% positive ROI figure comes from two main benefits. Half of respondents cite productivity gains, and nearly as many report reduced errors. So firms see real time savings and quality improvements.

But 48% of accountants manually check every single AI output. Not spot-checking, but checking everything. And about a third catch errors in their AI outputs more than half the time.

How do you square 89% positive ROI with error rates that high? David’s practical take is AI is “creating some gains in some areas, creating some extra work in others,” but the net result stays positive. Even when you add review time, firms come out ahead. But he cautioned, “It’s important that businesses still keep a close eye on the ROI of these situations and confirm it is delivering those gains.”

Meanwhile, plenty of work remains manual. More than half of respondents still handle financial reporting through spreadsheets or manual processes. Accounts payable and receivable, billing, invoicing, and payroll are all heavily manual. And yes, 51% of accountants still use Excel or Google Sheets for financial data. As Blake observed, spreadsheets have survived 40 years and aren’t going anywhere soon.

The Security Gap No One’s Taking Seriously

While firms celebrate productivity wins, the security picture is alarming, and almost nobody seems concerned enough to act.

Consider 52% of accounting managers surveyed have experienced a data breach in the last two years. That’s more than half. While David doesn’t have data linking these directly to AI, what he found about AI and sensitive data should worry every firm leader.

“Most companies don’t have clear guidelines on how they use AI tools with sensitive data,” David revealed. Fewer than half (49%) have guidelines for employee and payroll information. Coverage of bank reconciliation and customer billing data is even lower.

The perception gap is striking. Nearly half view AI cybersecurity risk as “minor,” another 12% as “insignificant,” and only 3% as “critical.” This might be “why so many people don’t have guidelines. Unfortunately, they just don’t perceive the risks at play,” David said.

Blake painted a scenario that’s probably happening now. Someone uploads payroll reports into free ChatGPT, where the terms of service may allow the vendor to train on that data. “We really need to step up,” he said.

The risks go deeper. Blake raised the issue of prompt injection, which involves hidden text in documents that manipulates AI agents into leaking data or changing payment information. It’s sophisticated and hard to defend against. As David acknowledged, “It’s a very new and rather sophisticated way of extracting information from a company. We still don’t really know enough about it.”

David didn’t sugarcoat his advice. “Guidelines around this don’t seem like much, and obviously, everyone is rushing to get AI tools. But it’s a huge risk factor we need to address.”

AI Is Raising the Bar

If AI makes accountants more productive, you’d expect fewer jobs. But the data tells a different story, and it came as a surprise to David.

“Despite a lot of reports predicting the end of accountants, it’s not really what we found,” he said. Companies are adopting AI, but “it’s not necessarily affecting hiring decisions in the same way. A lot of companies are actually more focused on upskilling.”

Blake offered a historical perspective. The same panic hit when VisiCalc and Excel arrived 40 years ago, yet accounting jobs grew. When cloud computing transformed the industry, client accounting services didn’t shrink. Instead, it’s grown year over year for a decade.

The talent shortage persists, with 73% of firms reporting trouble with retention and hiring. The hardest roles to fill are mid-career positions. About a third struggle to find financial analysts, with specialized accountants (tax and cost accounting) close behind.

The paradox is AI actually increases the need for experienced professionals. Someone must review those AI outputs that are wrong half the time. Someone must understand the AI well enough to catch mistakes. Someone must manage the security implications. All that requires judgment and experience, and that’s exactly what’s hardest to hire right now.

The data backs this up. Upskilling existing staff is the dominant strategy at 40%, double the 21% using AI to fill staffing gaps. Traditional hiring sits at 31%, with graduate programs at 23%. The profession is betting on people, not automation, to solve its workforce problem.

Looking Ahead: Challenges and Choices

What keeps accountants up at night? Budgeting and forecasting in an uncertain economy tops the list, followed by figuring out how to use AI effectively. As David put it, firms are trying to understand AI “in a way that makes sense.”

David has specific advice for where firms should invest their AI dollars. Map investments to your particular needs rather than chasing trends. For general guidance, he pointed to data entry automation and predictive modeling tools, especially cash flow forecasting and analysis dashboards, as areas delivering the most value.

When asked to predict what might change by the 2027 survey, David hopes to see more firms with updated security guidelines. “I think as these tools become more mature, more people will update their guidelines, especially for handling sensitive data like payroll and cash flow,” he said.

A Gap Between Speed and Safety

The Capterra data shows the profession is getting AI both right and dangerously wrong. The 89% positive ROI is genuine. Firms are saving time and reducing errors, even after factoring in review burdens. But that headline obscures the fact that over half have experienced breaches, fewer than half have AI data guidelines, and most dismiss the cybersecurity risk as minor, even with threats like prompt injection that the profession barely understands.

AI isn’t solving the talent crisis either. It’s raising the bar for what accountants need to know, making experienced reviewers more critical while the mid-career talent shortage intensifies.

Firms must build guardrails, write guidelines, and invest in upskilling their people to successfully work alongside technology that’s powerful but imperfect.

Want to dig deeper into these findings? Listen to Blake’s full conversation with David on the Earmark Podcast, and earn free NASBA CPE while you’re at it. 

Why Most Accounting AI Will Hit an Auditability Wall

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Every day, another AI agent promises to revolutionize accounting. But there’s a fundamental problem most tech companies don’t understand: AI accounting will hit what FloQast CEO Mike Whitmire calls “the auditability wall.”

While Silicon Valley churns out press releases about AI agents that can handle complex accounting tasks, a reality check awaits. In this episode of the Earmark Podcast, host Blake Oliver sits down with Mike Whitmire, founder and CEO of FloQast, to explore why accounting AI is fundamentally different from AI in other business functions. Rather than getting swept up in the AI marketing frenzy, FloQast stepped back to solve the core problem: how to harness AI’s power while maintaining complete audit trails and human oversight.

As Whitmire warns, “A series of companies will come out with AI agents that can do a lot of this work fairly accurately. Then they hit this auditability wall, and it creates a big problem for companies trying to scale.”

The Auditability Problem That’s Breaking Accounting AI

Unlike other business functions where AI mistakes can be shrugged off, accounting operates under rules most tech companies don’t understand. When a sales AI messes up a lead, the stakes are minimal. But in accounting, every transaction must be traceable, every decision documented, and every process capable of withstanding regulatory scrutiny.

This creates a fundamental conflict between how most AI systems work and what accounting requires. “AI is really about automating work, and agents are doing non-deterministic work,” Whitmire explains. “So that becomes a little scary when you’re thinking about auditability.” Most AI systems function as “black boxes.” They can produce results, but they can’t explain their decision-making process in the detailed, step-by-step manner that auditors and regulators demand.

The problem is about to hit the industry hard. When AI systems can’t provide proper documentation and audit trails, auditors are forced to recreate all the work, defeating the entire purpose of automation.

Rather than getting swept up in the AI marketing that dominates press releases from major ERP vendors, FloQast took a different approach. “We tried to avoid the noise and think about how AI should be applied to accounting,” Whitmire says. They started with their experience as former auditors and accountants, asking: How do you combine AI automation with traditional software code and human oversight to create something that actually works?

The answer required rethinking the entire approach to accounting AI, leading to a solution that preserves audit trails and human oversight while still delivering efficiency gains.

FloQast Transform: Building AI Auditors Can Actually Trust

Rather than chase the latest AI trends, FloQast built something different: an AI system that auditors can actually work with. The FloQast Transform product harnesses AI’s power while maintaining the audit trails financial reporting demands.

The approach is simple: let accountants describe their processes in plain English, then use that narrative to generate automated scripts and complete audit documentation. “You build your agents,” Whitmire explains. “You chat with the product and explain your process in pretty extreme detail.”

As accountants describe their workflow step by step, the system populates what looks like a familiar Excel workbook. “This Excel workbook will ultimately be the audit evidence,” Whitmire notes. This isn’t just a user interface choice. It’s a deliberate design decision to ensure every AI-driven process produces the documentation auditors expect to see.

Take FloQast’s benefit allocation journal entry example. The process starts with integrating with UKG Payroll to pull down employee data. The accountant describes each step: “integrate with UKG,” then “pull down information around names, dollar amounts, state,” then “populate column A with this, populate column B with this, and bold and make the header gray because that’s the format I like.”

The system combines different types of automation. For routine tasks, it generates deterministic code that produces consistent results every time. But when the AI encounters something new, like when FloQast hired its first Kentucky employee, it doesn’t guess. Instead, “it surfaces the question to the reviewer of that work,” Whitmire explains. The accountant can approve the change, and going forward, Kentucky will be handled properly.

This approach changes the accountant’s role. Instead of being the preparer who manually processes transactions, they become the reviewer who oversees AI agents and approves exceptions. “Our goal is to empower accountants to automate the really repetitive, rote part of this job. Elevate them into the reviewer of the more complicated work that the agent’s now doing,” Whitmire says.

The system preserves every prompt sent to the AI, every output generated, and every decision made. When auditors come knocking, they can trace exactly how each transaction was processed and where humans intervened. It’s the kind of comprehensive audit trail that makes regulatory compliance possible while still delivering efficiency gains.

Beyond transaction processing, FloQast applies AI to other areas like variance analysis. When account balances trigger materiality thresholds, the system analyzes the biggest transactions causing the change and drafts explanations. “It’s like balance went up because of boom, boom, boom, boom, boom,” Whitmire says. “It’s not these wonderful essays on how things change. It’s like a list of transactions.”

The Future of Accounting: Cyborgs, Not Replacements

The auditability challenge yields a surprising conclusion: rather than replacing accountants, AI will transform their role in ways that could solve the profession’s biggest problems. But this transformation requires rethinking what it means to be an accountant.

Whitmire envisions accountants becoming “accounting transformation information managers,” professionals who combine accounting knowledge with software engineering capabilities. “It will be much more like the merging of an accountant with a software engineer,” he explains. “So you have the accounting knowledge, supplemented by software engineering tools like FloQast, where they can take their accounting knowledge, use our product, and automate their work.”

This isn’t just about learning new software. It’s about fundamentally changing the structure of accounting work. Instead of spending hours manually processing transactions, accountants would deploy AI agents to handle routine work so they can focus on reviewing exceptions, making judgment calls, and ensuring compliance.

The career implications depend on where you are professionally. For younger professionals, Whitmire recommends “Get really good at technology, learn these tools as they come out, and continue to learn about accounting. You’re going to be a very, very valuable employee going forward.” For experienced professionals, “You need to be really great at reviewing the work. Continue to be really great leaders, and run great organizations.”

This evolution could address the profession’s talent shortage. By making accountants more productive and the work more intellectually engaging, AI could help attract and retain talent. “My hope is that it does a really good job of plugging the talent gap we talk about so much,” Whitmire notes.

But there’s a learning concern. Whitmire worries about newer professionals who might skip foundational manual work and jump straight to reviewing AI-generated results. “I feel like the old man saying this, but I did learn a lot doing the work manually and struggling through it,” he admits. He recalls learning about jet lease accounting by struggling through contracts and GAAP guidance—work that an AI could now handle instantly.

The solution may require restructuring how accountants learn their craft. Perhaps starting in accounting roles where they do manual work before moving into audit, rather than the current model, where most start as auditors reviewing work they’ve never performed.

As Oliver puts it, “I would rather manage AIs than manage people.” It reflects both the appeal and reality of this AI-augmented future. Managing AI agents eliminates many interpersonal challenges while allowing professionals to focus on technical and analytical work.

The accounting profession is heading toward becoming a hybrid of human judgment and AI automation. The question is whether professionals and firms will adapt quickly enough to thrive.

Regulatory Changes on the Horizon

The discussion also touched on significant regulatory changes that could reshape the profession. There are efforts in Congress to eliminate the Public Company Accounting Oversight Board (PCAOB) and transfer its responsibilities back to the SEC without additional funding, effectively ending independent audit oversight.

“When I was at EY, we were always scared of a PCAOB audit. So it was a thing that drove behavior,” Whitmire reflects. The fear-based incentive improved audit quality, even if the overall effectiveness is debatable.

Without the PCAOB, the industry would likely return to peer review, where accounting firms review each other’s work. As Oliver notes, “You’re not so afraid of your buddies reviewing your work.” That’s the same dynamic that led to audit failures before the Sarbanes-Oxley Act.

This regulatory uncertainty adds another layer of complexity to the AI transformation. Firms implementing AI systems need to consider current audit requirements and how oversight might change in the coming years.

The Path Forward: Auditability as Competitive Advantage

The accounting profession’s rigid requirement for auditability is often seen as a weakness. But it may become its greatest competitive advantage in the AI revolution. While tech companies rush to market with AI agents that promise to automate everything, firms that understand and embrace the auditability challenge will build sustainable, scalable solutions.

FloQast Transform demonstrates that the future isn’t about choosing between human judgment and AI automation. It’s about creating systems where they work together seamlessly. By preserving audit trails, maintaining human oversight for exceptions, and generating documentation that auditors can use, they’ve solved the fundamental problem that will likely sink many AI accounting startups.

For accounting professionals, this is a career evolution opportunity. The future belongs to those who combine accounting expertise with technology capabilities. These professionals will be empowered by AI to focus on higher-level analysis, judgment calls, and strategic work. The professionals who master these systems now will find themselves in increasingly valuable positions as the technology matures.

To hear the complete conversation about FloQast’s approach to accounting AI, including detailed technical examples and Whitmire’s predictions for the profession’s future, listen to the full episode above.

How Smart Small Businesses Turn Economic Headwinds into Competitive Advantages

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Small businesses are navigating a unique economic moment in 2025. They’re still serving customers and meeting market demands, but they’re doing it while managing changing costs and ongoing policy uncertainty. Despite these challenges, they’re not shutting down or laying people off. Instead, they’re finding creative ways to adapt.

Nicholas Tremper, senior economist at Gusto, shared this insight in a recent Earmark Podcast episode. Tremper tracks data from hundreds of thousands of small businesses through Gusto’s platform, so he has a unique view into how small businesses respond to today’s economic challenges.

The picture Tremper paints is more complex than the headlines suggest. While businesses face real pressures from tariffs, labor shortages, and economic uncertainty, many thrive by combining two essential strategies: utilizing AI to boost productivity and offering more appealing benefits to attract workers. For accounting professionals, this creates new opportunities to become strategic advisors rather than just compliance providers.

Economic Headwinds Create Planning Challenges

In the current economic environment, several interconnected challenges reshape how small businesses operate. Tariffs have reached a weighted average of about 18% across all imports—a significant jump from single digits in previous years. While this level is manageable for most businesses, the bigger problem is uncertainty.

“Small businesses don’t necessarily know how to think about what their costs will be three or six months from now,” Tremper explains. This uncertainty affects everything from inventory planning to contract bidding. For example, if you’re a retailer trying to stock up for the holidays or a contractor giving price estimates months in advance, not knowing future costs makes planning nearly impossible.

The labor market adds another layer of complexity. Unemployment sits at a relatively low 4.3%, but the July jobs report showed weakness with only 73,000 jobs added versus 100,000 expected. More concerning was the massive downward revision of 258,000 jobs from previous estimates for May and June. (Updated numbers released after the show was recorded are +22,000 jobs for August.)

This reflects what Tremper calls an economy that’s “idling”—staying in place rather than growing or contracting. Businesses aren’t laying people off, but they’re not hiring aggressively either. The combination of an aging population and tighter immigration policies creates structural labor shortages, especially in construction and hospitality sectors that traditionally relied on both groups.

These pressures force businesses to delay growth plans. As Tremper puts it, “You may not be able to work on that fourth development. You may have to stop at the three.” When you can’t reliably access more labor, expansion is much more complicated.

Entrepreneurship Boom Continues Despite Challenges

Despite these headwinds, there’s been an entrepreneurship renaissance in the United States. The number of new business applications skyrocketed during the summer of 2020, and as of June 2025, new businesses were still 57% higher than June 2019 levels.

The resilience of small business formation helps explain why the economy has remained relatively stable. “One of the reasons that the economy has been so resilient is because these new businesses have been bringing creative ideas to market,” Tremper notes.

What’s particularly interesting is who’s starting these businesses. For the first time, almost half of new businesses were started by women, compared to 30% in 2019. There’s also been an increase in businesses started by nonwhite entrepreneurs, showing entrepreneurship is spreading across demographics.

These new business owners face similar challenges regardless of their background. When asked about their top three challenges, they consistently mention cash flow, time management, and acquiring customers and employees. At least two of these are areas where accountants can provide significant value.

AI Boosts Productivity Without Replacing Workers

Here’s a statistic that might surprise you: 95% of small businesses using AI aren’t cutting their workforce. Instead, they’re making their existing employees more productive. This contradicts the common narrative that AI inevitably leads to job losses.

The productivity gains are substantial. According to Gusto’s research, 80% of small businesses using AI report productivity increases of 20% or more. But the key insight isn’t just that AI works; it’s how it works.

“Rather than an AI doing somebody’s job, what the person’s doing is they’re like, I’m the expert and you’re going to be a teammate to help me accomplish this quickly,” Tremper explains.

Businesses use AI for routine tasks like summarizing information and conducting market research—the necessary work that doesn’t require deep expertise. Meanwhile, humans focus on applying their knowledge, making judgment calls, and building client relationships.

This approach creates an unexpected benefit in hiring. Businesses that allow employees to use AI report 45% less difficulty finding new workers. It turns out people want to work for companies that give them tools to focus on meaningful work instead of tedious tasks.

The most successful AI implementations happen when businesses develop clear plans about when to use human expertise versus when to leverage AI for efficiency. This strategic approach creates a cycle where better tools lead to more satisfied employees, which makes companies more attractive to potential hires.

Benefits Become Essential for Talent Competition

While AI tackles productivity, smart businesses simultaneously invest in benefits to attract and retain workers. In today’s tight labor market, benefits are competitive necessities.

Offering healthcare benefits increases employee retention by 40% in the first year. Retirement plans show similar effects. What’s interesting is that half of the businesses offering retirement benefits don’t do any company matching. They get significant retention benefits just by offering the benefit.

This creates opportunities for businesses willing to think strategically about their total compensation packages. While competitors focus solely on wages—an expensive and difficult race to win—smart businesses create comprehensive value propositions that extend beyond the paycheck.

For accountants, a communication gap represents a missed opportunity. Fifty percent of small businesses don’t know if their accountant offers benefits guidance, and two-thirds of those simply never thought to ask. When small businesses receive benefits guidance from their accountants, 60% say it influences their benefit decisions. For businesses under two years old, that number jumps to 85%.

Accountants as Strategic Partners

This economic environment creates new opportunities for accounting professionals to evolve beyond traditional compliance work. The share of businesses reporting productivity gains from their accountants has jumped dramatically—from 52% in 2021 to two-thirds in 2025.

“Small businesses view their accountants as business partners. These aren’t number crunchers. These are people who are actively helping me figure out what I’m going to do next,” Tremper explains.

Businesses navigating today’s challenges need more than bookkeeping and tax prep. They need guidance on cash flow analysis, scenario planning, and strategic decision-making. When small businesses can’t predict their costs or easily access more labor, having an advisor who can help them model different scenarios is invaluable.

Cash flow, time management, and hiring are all areas where accountants can provide significant value. Whether it’s helping a client switch to upfront billing to improve cash flow or advising on benefits strategies to attract workers, these services directly address the problems keeping business owners up at night.

Interest rates remaining higher than business owners would like make this financial guidance even more critical. As Tremper notes, “It’s so important to really understand the return on investment on those borrowing costs.” Businesses need help evaluating whether investments will generate enough return to justify higher borrowing costs.

Cautious Optimism for Small Business Future

Despite the challenges, Tremper remains optimistic about small businesses’ prospects based on their track record of resilience. Over the past five years, small businesses have navigated a pandemic, an inflation crisis with rates hitting 8-9%, a major labor market reshuffling, and now uncertain tariff policies. Through it all, more people keep choosing to start businesses.

“They’ve got this grit, this creativity,” Tremper observes. “These things make me most optimistic about small businesses.”

The economic fundamentals, while softening, aren’t collapsing. Consumer spending continues to increase, albeit more slowly. People are choosier about purchases, but demand hasn’t fallen off a cliff. This provides a foundation for businesses that can adapt to changing conditions.

The businesses succeeding in this environment understand that sustainable competitive advantage comes from combining cutting-edge tools with meaningful employee value propositions. They’re not choosing between technology and people; they’re investing in both simultaneously and strategically to create resilience against future uncertainty. By maximizing productivity per employee and creating strong retention through benefits and culture, these businesses position themselves to weather whatever economic storms may come.

For accounting professionals, this transformation represents a challenge and an opportunity. Clients need more strategic guidance than ever, and they’re willing to pay for and value that guidance in ways they haven’t before. The firms that master this new approach can build sustainable competitive advantages that compound over time.

Listen to the full conversation with Nich Tremper to discover specific strategies for advising your clients through this period of transformation and learn how to position your practice as an indispensable strategic partner in their success.

80% of Businesses Overpay Property Taxes by 20%: Here’s How to Fix It

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What if I told you that your business could be overpaying millions in property taxes? It’s not just possible—it’s probable, according to property tax expert Josh Malancuk, President of JM Tax Advocates. In a recent episode of the Earmark podcast, Josh, drawing on his 28 years of experience in the field, reveals a startling statistic: about 80% of the commercial properties his firm evaluates are overvalued by 20% or more.

Uncovering these overpayments isn’t as simple as glancing at a tax bill. It requires an approach that most businesses—and even many tax professionals—overlook. “Most of the time, county and state assessors are kind of flying blind with their assessments, which is why we see about 80% of the time, large commercial properties are overvalued by 20%,” Josh explains.

During the podcast, Josh outlined the flaws of commercial property assessments, explained the property tax appeal process, and shared a real-world case study in which his firm slashed a $25 million assessment down to $9 million, saving the client over seven figures in taxes.

The Hidden Flaws in Commercial Property Assessment

The stark differences between residential and commercial property assessments create a perfect storm for overvaluation. For residential properties, assessors have a wealth of comparable sales data. Josh explains, “With certain property types, like a home, you’re going to have lots and lots of sales, probably sales right across the street, so it’s relatively easy to predict what your home value should be on a per-bedroom or per-square-foot basis.”

Commercial properties, however, present a unique challenge. Consider a 1,000,000-square-foot manufacturing facility in a small town. Josh says, “You’re lucky to see sales of any sort within three years.” This scarcity of comparable sales data forces assessors to rely on mass appraisal models.

As Josh describes, these models are “a one-size-fits-all” approach. They are typically based on reproduction cost or construction cost trends, with little consideration for the specific characteristics and market conditions of individual properties.

Josh’s firm uses comprehensive databases and sophisticated market analysis to combat these inaccuracies. They expand their search for comparable transactions to a regional or even national level, mirroring what a typical market participant would consider when evaluating a property.

The capability gap is significant. Josh notes, “99% of the time your county and your state assessors do not have that same capability.”

Navigating the Property Tax Appeal Process

Discovering an overvaluation is just the first step. Navigating the appeal process requires careful attention to varying deadlines and jurisdictional rules. Josh explains, “Each jurisdiction has its own period to appeal the property assessment. So once you get the notice, the appeal deadline can be as short as ten days or 30 days, or there may be no notice at all.”

The appeal process can involve multiple stages, from informal discussions with the assessor to county board hearings and, in some cases, escalating to state-level appeals or litigation. Each step requires a deep understanding of procedural rules to avoid disqualification.

Successful appeals rely on customized analysis, taking into account factors such as:

  • Age and condition of the property
  • Size and layout
  • Specific use and any functional obsolescence
  • Land size and characteristics
  • Truly comparable properties in the area or region

“Once we figure out the best approach, we build our market data and bring that into an organized message to the assessor to basically support our contention that the market value is different than their assessment,” Josh says.

Case Study: Uncovering Millions in Savings for a Food Processing Plant

Picture a sprawling food processing plant, its buildings a patchwork of structures dating back to the early 1900s. Josh’s team tackled this real case, starting with a staggering $25 million assessment and a tax bill of around $1 million annually.

Their approach? A month-long deep dive into every nook and cranny of the facility. “I spent about a month hiking around this manufacturing plant, discovering all of the nuances and all of the ages and the sizes and ceiling heights and the like.”

Donning hard hats, safety glasses, and brightly colored vests, the team pored over dusty blueprints, traced the facility’s tangled construction history, and scrutinized every square foot of the million-plus square-foot complex.

Their approach unearthed a treasure trove of assessment inaccuracies:

  • Entire sections of demolished buildings are still being taxed.
  • Incorrectly recorded ages of structures.
  • Outdated layouts and obsolete features are impacting market value.

The result? “We filed a protest, and in the end, we took that assessment down from $25 million to $9 million,” Josh proudly states. “It ended up saving the company seven digits over the years that we appealed.”

Impressed by the millions saved, the client entrusted Josh’s firm with reviewing their properties across an entire state—some 30 additional sites.

Unlocking Hidden Value in Property Tax Assessments

This examination of the intricacies of property tax assessment reveals a surprising truth: significant savings are hiding in plain sight, waiting to be uncovered by those willing to look closely enough.

Let’s recap the key insights:

  1. Mass appraisal models often lead to widespread overvaluation of commercial properties.
  2. Customized, property-by-property evaluation can reveal substantial inaccuracies.
  3. Navigating the appeal process requires expertise and attention to detail.
  4. On-site inspections can lead to millions in savings.

For businesses, these insights represent an opportunity to free up capital for growth and innovation. For tax professionals, it’s a chance to deliver immense value to your clients, potentially saving them millions of dollars.

Some jurisdictions even allow for retroactive relief, potentially multiplying the savings across previous tax years.

To gain even more insights that could revolutionize how you approach property tax assessments, listen to the full Earmark podcast episode featuring Josh Malancuk. 

Then ask yourself: How much-hidden value might be lurking in your property tax assessments? The answer could be worth millions. Isn’t it time you took a closer look?