The Accountants Guide to Dealing with a Pandemic
There’s no text book that tells accountants how they should help their clients prepare or deal with a pandemic. Despite the fact that there’s no way to fortify a business against an unexpected natural disaster, right now your clients expect you to have all the answers!
The world was blindsided by the speed and magnitude of the COVID19 crisis and while the coronavirus outbreak is first and foremost a human tragedy, it is also a global economic disaster. It hasn’t discriminated either, both big and small businesses have gone into hibernation and sadly, some won’t come out the other end. What’s already become clear is that the countries who were proactive and quickly deployed strategies like social distancing, lockdowns and travel restrictions have managed to ‘flatten the curve’ and control the outbreak. What’s also clear, the proactive accountants who have rolled up their sleeves and jumped into the trenches with their clients will emerge as big winners.
Accountants have long been regarded as the most trusted business advisors, however, they have been challenged for that mantle in recent times. As the first responders to the COVID-19 emergency, accountants have proved beyond all reasonable doubt they are still #1. They have shown great leadership and remained calm and objective despite being bombarded with calls and emails from distressed and anxious clients.
While the government was quick to release stimulus packages, your job was to drop everything, decipher the stream of announcements and then relay the message to your clients. It was a pressure cooker and it’s fair to say, JobKeeper was a relief for some but frustrating for others. The firms that were prompt in pumping out emails and newsletters were smart and the firms that delivered a COVID 19 game plan to their clients will emerge as heroes. It remains to be seen if the funds will be there to pay fair value for all these services and some of the work might prove to be an exercise in building goodwill. For the accountants who helped save a business or jobs, those clients will remain loyal forever.
It’s not business as usual and firms have had to shift their priorities. Regular compliance work has taken a back seat because it’s more important to pause and think about what your clients need right now. Having said that, real-time data is critical to make informed business decisions. They’re more worried about business survival and cash flow rather than tax returns. Some of the grants and subsidies hinge on proving a reduction in turnover so the March BAS might take centre stage not to mention the need to assist clients with cash flow forecasts, loan applications, commercial rent negotiations and assessing ATO tax payment deferrals.
Others might reach out for help regarding technology and how to work remotely. For the industries booming like manufacturers of cleaning products, supermarkets, video streaming and IT services, they might need help scaling up to handle the surge in demand and sourcing staff. Because cash flow is tight, tax planning remains a key service for all business owners. Only time will tell what the impact this all has on your workflow, billings, cash flow, future maintainable fees and practice value.
A PIVOTAL MOMENT
There are lots of stories of businesses pivoting to survive including restaurants who have successfully converted to take away meals and produced ‘isolation packs’ of frozen meals. Many accountants have also been forced to pivot and change their modus operandi. Staff are working remotely and have had to adjust to their new, temporary working environments at home.
Of course, working from home sounds like an attractive work-balance lifestyle option because there’s virtually no commute time, however, it isn’t necessarily a seamless process. Imagine an accountant sitting in your office with 3 monitors and a top of the range printer/scanner. Then, picture them at home with their kids, their partner or flat mate and the television on trying to do the same work on a laptop and a domestic all-in-one printer/scanner. Can they maintain the same level of productivity, high level of accuracy and ethical standards with all the distractions?
The future of accounting might look very different based on the success of this forced remote working ‘experiment’. It may well be the start of another industrial revolution and given staffing remains a top five issue in the profession, offering a flexible work environment might be an attractive recruitment tool. What used to be a perk in 2019 could be mainstream in 2021. It demonstrates to the team that you value and trust them. In turn, this shift might produce a domino effect with a reduced need for large office space which will have an impact on your commercial rent and overheads. Reduced travel time and a bigger investment in IT and cyber security will follow.
Face to face meetings are also off the agenda and being replaced by video meetings using new technology and tools like Zoom, Skype and Google Hangouts. Great substitutes but it also changes the dynamic of the client relationships. It might prove a challenge for your older clients and you might need to help them adjust to the new world we live in.
Let’s face it, over the last 2 decades a lot accounting firms have become ‘compliance sweatshops’ thanks to the GST tax system. Compliance and deadlines remain important but when business owners are fighting for survival they are focused on more important things like emergency government relief, cutting non-essential costs, preparing a cash flow forecast, getting rent relief, laying off staff and working through JobKeeper entitlements.
The most important pivot for these practitioners through COVID 19 was it forced them back into doing consulting and advisory work. Guiding clients through relief packages and helping them build cash flows and a game plan through to the recovery phase is what it’s all about. Of course, most of the stimulus payments are being delivered through the tax system so accountants have become an essential service and clients are again understanding their true value. We are a constant in the life of our clients in both good and bad times and now is the time to shake the term ‘tax accountant’ and be known as ‘accountants and business advisors’.
It’s been chaotic and a lot of firms are simply focused on getting through this spike. However, you need to recognise this is also a massive marketing opportunity. If you have potential new clients in your pipeline, now is the time to reach out to them. Simply ask, “How are you going.” You might just find their current accountant is buried in a backlog of work and mayday calls.
If they’re not getting the help they need then you might win some new business. They could be dissatisfied or frustrated with their current accountant who could be struggling with the transition to the home office or new technology. The lesson from this is, don’t assume everyone is under control and make sure you reach out to your A and B grade clients because other accounting firms might be circling them like sharks. Now is the time to showcase your advisory skills.
COVID-19 has brought about the worst financial crisis since the Great Depression and it arrived with little warning. There’s an interesting analogy that compares the time it takes to demolish a house (a few days) and the time it takes to build a new home (up to 12 months). It would seem as though it took a few weeks to bring the economy to a standstill but it might take years to rebuild it.
I’m very confident that the profession will come out of this stronger than ever. Accountants need to stand up as trusted business advisors and help their clients through the recovery phase and then rebuild and regrow.
You and your staff are probably working non-stop to keep abreast of the announcements, updates and legislation. It’s been relentless as have been the client calls and emails. You’ve probably been forced to make changes in your workplace and smaller firms have felt the full force of the storm because they don’t have the time or resources produce newsletters, webinars and then push it all out on social media channels. Remember, in lockdown people are living online craving information and solutions. If you need help in this area we invite you to contact us.
Finally, the most important piece of advice I can give accountants right now is, stay healthy so you can help your clients. It’s not easy to eat right, drink lots of water, find time to exercise and get plenty of sleep when your clients are screaming for help. However, this situation is akin to a plane crash where the engine has cut out and the economy is in a tailspin. Clients see you as their pilot in this emergency so you and your crew need to secure your oxygen masks first before you can help them.
There is no guarantee that this will just ‘end’ or that another crisis isn’t around the corner. While we all desperately hope that things will get back to ‘normal’ soon, one thing is for sure, the new ‘normal’ will look very different.