How accountancy firms can learn from 2020 to be ready for 2021
29th Sep 2020
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It’s around this time of year that accountants usually resurface after a well-earned summer break and start planning for next year. But this is no ordinary year, obviously, and has certainly been a learning experience.
The state of permanent emergency in place since March, and an ever-tougher market, has focused the attention of accountancy firms on how to improve revenue and productivity – on generating more income with fewer resources under difficult circumstances.
In particular, with leads thinner on the ground, it’s got many thinking about how they can unlock greater lifetime value from existing clients. That might mean increasing buy-in to services already on the table, or it could be about broadening the offer with things like outsourced payroll processing.
But now, with the Prime Minister talking about at least six further months of disruption to come, it’s time to take a breath, take stock and ask yourself some tough questions about your long-term plans.
Really, at this point, good practice management is about making sure 2021 doesn’t follow the same pattern of knee-jerk decision making that 2020 unfortunately required.
How flexible are your facilities? If you need to adapt or pivot, it should be as painless as possible, not make or break.
It’s been clear that practices which have coped and even thrived in 2020 are those which were able to respond to the changing needs of clients. Those able to reposition themselves as trusted advisers, crisis managers and expert communicators did well.
Meanwhile, many firms that rely on antiquated desktop or hybrid desktop software with steep 90-day exit clauses have had some light relief from suppliers on payment terms - but ultimately kicking the can down the road won't help in 2021. Is it time to make the leap to cloud? Painful as data migration can be, Accountants willing to try will make the gains in the long run.
Have you successfully managed your costs? If not, think about taking decisive steps right now to rein in spending and give yourself room to manoeuvre.
Arguably the very biggest lesson 2020 has taught us is that you never know what’s round the corner.
Businesses that went into this year with healthy bank balances, steady revenue streams and strong sales pipelines were obviously more resilient.
Accountants tend to be pretty good at this stuff – you’d hope so, wouldn’t you? But it’s worth reiterating the key principles.
First, keep cash outflow under constant review. Can you renegotiate your payment terms with suppliers? Are there assets you can do away with?
Secondly, maintain a rainy day buffer.
And finally, don’t neglect sales and marketing – they’re not a nice-to-have. In fact, you should be doubling down on maintaining your visibility in a competitive market, not going silent. Especially when face-to-face networking opportunities will be non-existent for the foreseeable future.
How can you ensure your employees remain engaged and have a healthy relationship with work?
After all, ensuring the wellbeing of your team amounts to ensuring the wellbeing of your business.
Between health worries, financial anxiety and the strains of working from home, your employees are already feeling under pressure. Then, on top of that, you need them to be delivering more effectively than ever.
Now is a good time to conduct staff surveys. What’s worked well for your team? And what would they like to change? They might need more or better equipment, more effective communication from management, or better ways to collaborate and communicate, for example.
Or is this an opportunity to improve your triple bottom line and go a step further to look after the welfare of your employees. With winter coming, can you chip in to the cost of the heating bill, or look at subscriptions to help entertain children should we enter another lockdown?
Listen, absorb the feedback, and then – only then – make a plan for how you’re going to reduce the stress, make them feel valued and continue to earn their support for another challenging year ahead.
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