What has Covid lockdown taught accountancy firms?

//What has Covid lockdown taught accountancy firms?

What has Covid lockdown taught accountancy firms?

As lockdown eases and the country returns to some form of normality, organisations are reflecting on their reaction to the pandemic. While it has brought disruption, it has also shown how resilient many businesses are when faced with unforeseen pressures. Accountancy firms who embrace the pandemic as a learning opportunity and adapt their working practices are likely to survive the upcoming recession.

In this article, we look at the lessons accountants can take from lockdown and how they can be incorporated into a post-Covid world.

Cloud-based technology is essential

Firms who have already adopted cloud-based technology responded to the changes caused by Covid-19 more successfully than those still using traditional methods of working.

Rather than having physical servers in the office, cloud-based apps run on remote servers and are accessible through a web browser. Staff don’t have to be in the office to access information, so when the country went into lockdown, they could work from home immediately.

Accounting firms should start using cloud-based technology, if they aren’t already. There are a variety of technologies available, including online client portals, document management systems and virtual collaboration tools. Collaboration tools are particularly important for remote working. A useful tool such as Slack provides a central hub for communication and file sharing, tracks interactions and gives you an audit trail. It also allows you to make voice and video calls from inside the platform.

The benefits of cloud-based technology include:

● Access anytime on any device

● Reduced infrastructure costs

● Low ongoing costs

● Automatic back-ups and software updates

● Increased security

● Can be used on any brand of computer

Working from home is a viable alternative to the office

Accountancy firms must make technological and cultural changes to allow flexible working to become more mainstream in the future. The pandemic has shown us people can work remotely successfully.

Enforced home working, while not always ideal, has given many people the chance to redress their work/life balance. Reduced commute times allow them to spend more time with their families. Being able to work flexible hours than the usual 9 to 5 helps with childcare responsibilities. Staff are unlikely to want to lose the positive effects remote working has had on their lives.

Accountancy firms will benefit from a home/office hybrid arrangement. Rent and overheads can be cut significantly, as can the costs associated with business travel. Many trips will now be deemed as unnecessary and replaced by video conferencing instead. Firms can also offer their services to clients over more flexible hours as some employees will spread their working hours over evenings and weekends.

Firms who don’t adapt are likely to face issues retaining or recruiting top talent.

Don’t neglect business continuity and crisis planning

Perhaps the most obvious lesson to come out of the pandemic relates to business continuity and crisis planning. Accountancy firms must either create or review their business continuity plan to cover risks that may impact them in the future and build resilience. For example, how would a second wave of Covid-19 affect the business?

As discussed above, mitigating actions could involve implementing more cloud-based technology or enhancing current technology and processes. Upgrading connectivity is likely to be high on the list to allow employees to work more effectively remotely.

Accountancy is becoming more advisory

Accountancy firms are likely to have seen an uplift in requests for advisory services during lockdown. Even before the lockdown, technologies such as cloud accounting software had automated many tasks, freeing up staff to provide higher-value services.

Accountants have traditionally offered a compliance-focused service. Bookkeeping, financial reporting, ensuring their clients meet regulatory requirements and make tax submissions on time. In the future, firms will continue to offer more of the kind of services they have during lockdown, like risk management and product/service diversification. Other services accountants can offer include:

  • Strategic planning
  • Growth profitability
  • Business intelligence
  • Succession planning
  • Business valuation
  • Restructuring and rationalisation

Accountants will move away from being technical advisors and more towards being trusted partners, educating clients on different options and offering creative solutions.

Change creates opportunity

Along with chaos and devastation, Covid-19 has brought opportunities for growth and new directions for some businesses and their accountants. Many are having to diversify to survive and are turning to their accountants to help them assess risks and opportunities.

Others need help to mitigate their cash flow risks, find alternative sources of credit or apply for government funding. Accountants can position themselves as trusted business advisors and guide clients through turbulent times. They can show their long-term value and help businesses become more resilient and flexible – in short, they can help them survive.

Although Covid-19 forced accounting firms to make changes quickly, now they will have more time to implement permanent changes needed for their businesses to thrive. If you’d like to find out more about digital accountancy, call our specialist advisors today.

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