Challenges of business advisory in the era of Covid-19
Business owners have always viewed accountants as their most trusted advisers, which means they have had to face massive challenges over the past two months, writes Sage’s Chris Downing.
Making Tax Digital (MTD) showed us that when business owners encountered difficulties with new regulations and the software they needed to comply, they called their accountants. The disruption and need to interpret legislation we’re seeing from Covid-19 is like MTD, but ten times compounded.
We’re going through a huge period of legislative change and uncertainty and accountants are playing a central ground as businesses ask for help.
Practitioners are having to do this from home, without the direct support of office staff to back them up. Many firms have experience with flexible working and operating from home, but are now doing it on a different scale.
With a customer base of 14,000 accountants serving close to 1m businesses, Sage is acutely aware of their priorities at this time:
- Reassuring clients and helping them obtain financial assistance
- Understanding and deciphering the application of new legislation
- Sharing tools to make it easier to work from home.
Good accountants anticipate what’s going to happen and like to understand the detail. But in the current crisis, many practitioners have packed a year’s client contact into a couple of weeks. And a lot of them have been sharing knowledge that isn’t fee-generating.
At the same time, the day job hasn’t stopped and practitioners need to think about and plan their normal activities for this time of year: VAT returns, P11Ds, annual accounts and the next round of individual tax returns.
We all know those tasks will be coming back into play. If and when normal office life starts again, the Covid-19 outbreak will push a lot of this work into the traditionally quiet summer months. Accountants will need to deliver nine months’ worth of work in six. With more work to deliver in less time, we expect to see accounting practices embark on a renewed practice efficiency drive over the next 9-18 months.
Nor are accountants immune from the cashflow pressures their clients are experiencing. Direct debits have been cancelled and practices may be operating under tighter working capital constraints and trying to manage the impact their own cashflows.
I speak to an awful lot of accountants and business owners about how they’re going to get through the next 12 weeks and what their businesses are going to look like six months ahead and into the future.
Their perspectives are beginning to change from survival and cashflow management to recovery and how trade to out or the current situation.
That means getting a better understanding of the business and its critical needs so you can build in better resilience into its business model, just in case this situation or something similar occurs again.
New opportunities for efficiency
The need to work with new kinds of tools to support new, more flexible and efficient working methods is prompting businesses of all sizes to look at accounting, payroll and operational solutions they never previously thought about.
Business software developers are thinking deeply about the future too and what their current and future customers are going to need.
There are a lot of services out there, but not all of them fit the bill yet – there’s a lot of white space that could still be filled.
We’ll see further innovation in the market from all the vendors trying to serve their customer bases in ways that will help them work smarter, with multiple vendors, and free up their time. Having such a diverse landscape for bookkeeping and client management solutions is good for the software industry. It creates opportunity and drives performance as people identify new gaps in the market.
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Director of Product Management for Accountants and Bookkeepers at Sage, Chris Downing won a string of awards during his time in practice Milsted Langdon and was AccountingWEB's Practice Excellence Technology Champion in 2014.