U.S. accountants who advise small and midsized businesses are feeling less confident this year, according to a new survey.
The 2025 Avalara Accountants Confidence Report, produced by Avalara in conjunction with CPA Trendlines, polled 623 accounting professionals and found a shift from cautious optimism to greater pessimism, thanks to various economic pressures and policy uncertainty.
Between January and April, the net sentiment among accountants swung from a positive 19% to a negative 39%. Initially, nearly half (47%) of advisors foresaw improving conditions. But by April, only 25% held this view, with nearly two-thirds (64%) expecting worsening economic environments. The shift signifies growing apprehension across Main Street accounting firms serving as advisors on tax, payroll and compliance decisions amid a backdrop of historic tariff actions, continued inflation and unpredictable tax and trade policies.
Accounting advisors pointed to the top issues impacting their clients, with 61% citing inflation, costs and pricing; 60% naming tariffs and trade impacts and uncertainty; 59% pinpointing unease around new tax legislation; 42% identifying ongoing labor supply and wage issues; and 37% citing technology and AI adoption as a priority.
“Accountants are sounding an urgent alarm,” said CPA Trendlines founder Rick Telberg in a statement Wednesday. “They’re advising SMBs to conserve cash, curb discretionary expenses, and resist taking on unnecessary debt. Amid volatility in tariffs, inflation, and complex tax legislation, SMBs face serious barriers to strategic growth and operational stability.”
According to the accountants polled, the biggest challenges facing SMBs are hiring and retaining talent (60%), keeping pace with technology (55%), and managing rising costs (52%). The added strain of tariffs has handicapped SMBs’ adaptability and agility, which is typically their key advantage over larger competitors.
Other challenges include adapting to disruption (35%), meeting evolving customer expectations (32%), and managing product costs (29%).
Accountants feel the most confidence in their professional services sector — including doctors, lawyers and other professionals — with 60% believing this sector will thrive during a downturn. Not far behind that is the technology sector, where 57% of accountants expressed confidence driven by strong demand for digital solutions and AI that boost operational efficiency and resilience. And the oil, energy and mining sectors show 39% of respondents optimistic due to recent spikes in supply and demand for these resources.
On the other hand, farming (6%), franchising (3%), and arts and entertainment (2%) are seen as the most vulnerable sectors. These sectors depend heavily on broader economic performance, and the recent tariffs have further strained their growth and output.
Firms are encouraging clients to monitor their burn rates, cut overhead and avoid unnecessary borrowing. AI and automation are also important as survival tools amid labor shortages and pricing pressure.
“This year’s survey underscores a critical moment for the SMB business sector,” said Sona Akmakjian, head of global strategic accountant partnerships at Avalara, in a statement. “Accountants are urging businesses to fortify themselves against ongoing economic turbulence by sharpening their operational focus, adopting intelligent technology, and carefully managing resources. Clients are, more than ever, relying on the accretive business acumen and advisory skills of their trusted advisor for guidance through historic headwinds and uncertainty.”
The 2025 Accountants Confidence Report can be accessed here by using the code “avlr”.
