As the world struggles to throw off the Coronavirus pandemic’s ripple effects, accountants have faced their challenges concerning adapting to remote work and maintaining their client base. A test of the ability of businesses to continue to operate will come, as they begin to function with reduced support measures.
As per a DMP survey, COVID-19 is predicted to have a negative impact on the sales of UK businesses – an average probability of 71%. Even though this impact will be temporary, it will cause a decrease in the overall revenues and profitability of businesses.
Back in April, it was reported that 59% of UK businesses are not confident about surviving the pandemic. The situation is tougher on small to mid-sized accounting practices as their resources are more limited as compared to larger firms.
Moreover, the UK tax season is approaching as inexorably as ever, which means that accountants need to start prepping for self-assessment tax deadline. Here is how accountants can rethink their business model and prepare to serve their clients optimally in the new normal:
1. Analyse the effect of the lockdown
First off, you should take a step back and analyse the effect of the lockdown on your clients. Which industries have been the worst hit? Which ones have witnessed increased demand during the lockdown? How have their buying patterns changed? Which financial assets are the most (or least) popular now? What are sales channels your clients looking to invest in?
All of these will help you to plan how you, as an accountant, can best serve them. One way to look at this is to have a long-term vision of what you would like to be doing as an accounting firm, and work backwards from there.
2. Consider long-term investments in your business
While it might seem counterintuitive to make extra investments now, there are several anticipated industry trends that it is good to prepare for. The prevalence of digital communication means that most tasks and client interactions will be happening online, which makes a robust CRM and a smart practice management system necessary.
One should also invest in robust technologies to support remote work and business continuity. In addition, having efficient accounting software and tools that can handle complex tasks will help accountants work from home with ease.
You can even take the extra step of investing in home offices for your team members so that everyone embraces the new normal readily. You must also make necessary changes to improve the wellbeing of the workplace.
3. Prepare for increased demand
One way to prepare for new incoming clients is to invest in substantial customer experience. Invest in both software and skilled team members who can connect with your clients, resolve their difficulties and educate them on new service offerings or new accounting trends they should be prepared for.
If you don’t already have social media channels for your business, now is an excellent time to set them up. As digital communication becomes the norm, quick responses and active information-sharing over social media will become not just nice-to-have but also necessary.
4. Ramp up your business development
Now more than ever, consistent business development efforts are crucial. This is where industry research comes in handy – the more you are up-to-date on how different industries are performing, the more efficiently you can reach out to companies that are struggling with their accounting and bookkeeping or need help with tax planning.
Have a strategy in place for the nature and channel of communications, ask your existing clients for referrals and keep following up on the people you do connect with.
5. Introduce new sales channels
Adding to #4, if your existing accounts and avenues of business are not enough, plan for and introduce new revenue channels. Here are some ideas to consider:
1. Act as a business coach or growth advisor
Many businesses may be struggling to figure out their next move in the wake of the pandemic. As their accountant, you can also act as their mentor or business advisor. Review their financials, cash flows and industry benchmarks to make sure everything is up-to-date and advise them on costs they can save, payment terms they can negotiate and claims they can apply for.
You can also review their supply chain, test their business model and check resilience and offer suggestions on whether they can modify their product/service line and whether they can downsize any activities or even think of diversifications. E.g. Change business model to online, introduce DIY products/services
2. Advise on financial products
Many accountants have already had to become emergency workers as businesses have rushed them for advice on which loans to apply for and which government grants are best for them. You can take this a step ahead and start advising both individuals and businesses on which financial products to buy and sell.
For instance, those who have lost jobs in the pandemic may need to mortgage their property or withdraw their money from the stocks or bonds they hold. Others may wish to take out new insurance policies or apply for pensions or loans from the government.
Businesses will also need help with choosing grants they are eligible for or selling fixed assets to get some ready cash. As a financial products advisor, you can guide them through all of these.
3. Develop a niche market
If you have been working as a generalist so far, now might be a good time to specialise in one niche. Different industries will face different kinds of challenges as they get back on their feet. As a niche accountant specialising in, say, retail accounting or NGO accounting, you can acquaint yourself thoroughly with the needs of your chosen industry and give them tailored inputs.
4. Work with SMEs
Small businesses are likely to have been particularly hard-hit by the crisis. Many of them may be in survival mode and facing the prospect of bankruptcy. As an SME-focused accountant, you can help them with solutions like applying for financial aid, building extra financial reserves and implementing office-wide pay cuts if needed.
Besides, advise them on when laying off employees might be the only option while suggesting alternative ways to stay financially viable. Broad-scale layoffs may lead to resentment within the team and also cause the loss of valuable skill sets, which is why SMEs should be guided carefully on this front
5. Expand overseas
This might sound difficult now when cross-border commerce is profoundly impacted. However, now it is, in fact, an excellent time to form relations with new businesses abroad. By offering timely and personalised advice to companies that might not be getting such services in their own country, you can acquire new clients that will continue to be your long-term accounts once things get back to normal.
If you are looking to streamline your operations and focus on the activities and clients that bring in the highest returns, outsourcing is a good option. Routine tasks such as bookkeeping, payroll and tax filing can be carried out efficiently by outsourcing partners who specialise in those services. It is also a cheaper option than maintaining full-time employees who do the same things but at a higher cost.
7. Use scenario analysis
Businesses of all sizes need to make critical decisions about how they will reopen, whether they will operate at full capacity, what changes in capacity could imply for their supply chain, how to forecast demand and so on.
As an accountant, you can help them set up contingency plans for significant changes they may need to implement. These can include the use of historical data to predict trends, introducing new or supplementary services to meet changes in demand (such as online ordering for restaurants), choosing and getting accustomed to digital tools to allow for contactless service and so on.
summing it up
As they say, when the going gets tough, the tough get going. These tips mentioned above will help you not only respond to the ongoing effects of COVID-19 but also prepare a blueprint for more efficient operations in the long-term, tax season or not, including the scenario where another pandemic or significant catastrophe strikes.
If you want to need support from an accounting outsourcing expert, please ring us at 020 3475 3537 for a free consultation or fill the contact us form.