Recession rollercoaster not over for accountancy practices

The economy may be heading into the second phase of a ‘double dip’ recession, so now is the time for practices to brace themselves and prepare their clients, argues Mark Lloydbottom.

I recall the occasion I met the challenge set by my son to sit with him on the big dipper. The ride started slowly before gathering pace and then my heart raced as I saw the track ahead disappear. As we headedtoward the precipice I could hear screams so piercing my ears reverberated as we plummeted earthward. I was starting to recover from the terror only to discover we were going to repeat the experience within a few seconds.

This is what the recession has been like for many people. The effect has been painful, but maybe its course is not yet complete and the next dips could be even bigger. Everyone was quick to herald the end of a recession based on one quarter’s GDP, which is curious as the recession was only official after two successive quarters of negative growth. The UK economy remains heavily sedated with bank bailouts, quantitative easing of £200bn, low interest rates and few signs of recovery in key industries such as construction.

I have often commented that we really only have two commodities to sell - time and expertise. I am sure you recall how you and your team worked last month to complete the 2009 tax returns and so your time (aka chargeable time) for the month of January may well be greater than many of the ensuring months. As we face, at best, a slow recovery or at worst an economy that is heading for a further big dip how should you respond?

Recognising that the purpose of the business is to meet the needs of clients (profit is an outcome that results from that pursuit), here are two steps you need to take to help you direct clients to avoid the big dipper and recession-proof their businesses:

First - get paid!
One of the biggest obstacles to giving clients further help is the reality that money is owed. Certainly clients are aware of any outstanding debt and this acts as an inhibitor to seeking further advice. Your awareness of the indebtedness is further increased by work in progress.

Create more time to meet with clients
How much time did you spend with clients last year? Develop a plan to meet with clients more regularly. What makes you a great accountant isn’t the completion of a tax return or a timely audit, it is the advice you give and the trust and confidence your client has in your abilities.

Next time we will look at what has to be done to enable you to spend more time with your clients.

Mark Lloydbottom is practice development editor for AccountingWEB.co.uk.