As they support SMEs and the self-employed, what can accountants do to look after their own businesses during COVID-19?
24th Apr 2020
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How Accountants can look after themselves in this crisis
As we write, accountants are in the thick of it, helping their clients access much-needed support from Government-backed initiatives designed to lessen the impact of the COVID-19 crisis.
For example, so far, we know that around two-thirds of UK companies plan to furlough at least some staff because of coronavirus, with 80% of their wages being covered by the Government, up to £2,500 per employee. And in a recent survey of Capium Customers, over 70% have either had to furlough staff or will be looking to furlough in the coming weeks.
That’s a higher take-up than the Treasury expected and the scheme will therefore cost more than planned – a cost we’ll all be paying back for years to come, perhaps from as soon as Autumn Budget 2020.
What’s more, on 17 April, that scheme was extended for another month, up to June, a day after it was confirmed that the lockdown would officially last until mid-May, at the earliest.
As everyone suspected, but now we know, we’re in this for the long-haul. So, even as they support SMEs and self-employed people, what can accountants do to look after their own businesses in 2020?
Those of us who were in business during the financial crisis of 2008 will remember the pattern: as their clients struggled, accountants were frantically busy, only to feel the impact themselves some months later.
Some clients pared back their spend on accountancy services, others struggled to pay bills on time and, unfortunately, many others simply went out of business.
Accountancy is more resilient than some industries in a crisis – compliance work goes on and business planning becomes more important than ever – but there are still steps you should be taking now to insulate yourself against shocks to the system.
As you’ve no doubt been advising your own clients to do, stripping out unnecessary costs is vital. The more chaotic things feel in the marketplace, the more disciplined you need to be. Your own spending is one thing you can control, with a laser-focus on break-even analysis and cashflow forecasting.
Even if it feels uncomfortable to raise it when they’re struggling and distracted, be really clear with the clients you’re supporting that you need to be paid for the work you’re doing.
Resist the urge to give away your time and knowledge for free, even if you find ways to go above and beyond within the fees you already charge.
For example, depending on your fee structure, you might or might not want to charge clients for submitting furlough pay applications on their behalf via the government portal that launched on 20 April.
Chase up invoices regularly and agree payment plans with clients who might be finding it difficult.
Flexibility and sensitivity are good but your practice needs to pay its way, too.
Most importantly, make sure you dedicate time to understanding and communicating the latest guidance on furlough schemes, working tax credits, business rate relief, self-employment income support and government-backed loans.
Making sure your clients make the most of the support available is the best way to keep them buoyant and ensure your income in the long term.
Capium cloud payroll software makes administering statutory sick pay and furloughing easy, from just £1.80 per client. Book a demo to get started and cut the cord on paying extra for staff user licences.