Pushing the economy with digital transformationby
Webexpenses CEO Adam Reynolds looks at the impact of the current economic climate on the accountancy industry and the opportunities digital transformation can offer.
The fallout from coronavirus has hit the accountancy industry hard. As has been reported, many organisations have had to furlough large numbers of staff and make redundancies.
BDO furloughed 700 employees – including all of its first-year trainees, apprentices and some support staff. Mazars furloughed 200 employees. EY and KPMG enforced significant pay cuts.
Although the quantitative evidence on the SME impact has not yet been scared, the prognosis does not look good with 80% saying their revenues are declining in a recent report by McKinsey.
Pre Covid-19 and recession, the industry was in a good place. Revenues were up and the sector was doing well. The challenge that lies ahead is to first secure businesses, and then to stimulate and maintain growth in the years to come.
Impact on day-to-day work
As well as economic challenges, businesses have had to deal with operational constraints. Since lockdown began, there has hardly been an organisation across the globe that hasn’t felt the effect of a change in operations, such as being forced into total remote working. Many industries have had to navigate this new landscape and the challenges it has brought to the fore.
Covid-19 has accelerated a need to address the requirement for employees to work remotely and the impact this will have on existing corporate models. Where once senior executives and key decision-makers may have travelled for meetings they have now been forced to adapt and adopt new technologies and strategies which allow them to fulfil these requirements remotely.
The challenge of working remotely should not be underestimated. With 84% of employees working from home during lockdown – and 86% of those who worked from home recently did so due to the pandemic. This has proved trying year for many. Our research revealed:
- Out employees who were office-based prior to the pandemic, 42% are working extra hours each week
- 22% are working an additional 10 hours or more
- 24% say their work has been taking longer
- 25% have struggled to do their job effectively
The main reason for these issues: accessibility. 60% of people have experienced tech-related challenges during this period of lockdown, most citing problems with accessing software, networks, and files, or supporting other colleagues with tech as the main hurdles.
The opportunity for change
The government has recently announced a new £20m support programme to boost the recovery of SMEs in the UK. Businesses will need to think carefully about how they use such funds. Weathering the recession and returning to pre-pandemic optimism and growth will require wise investment in new equipment or upgrade existing technology to best support staff.
The current economic climate – volatile financial markets, unemployment, and government intervention – means there will be a significant impact on accountancy within organisations. Reporting and end of year statements will be affected and there will be increased scrutiny on the day-to-day. Whether working remotely or in an office, it’s essential that work can be done efficiently and accurately, avoiding further delays and frustrations.
Many organisations are already beginning to realise this. Our survey found that 93% believe the pandemic will be a catalyst for digital transformation, with over a third (35%) stating they will be looking to review their own departmental processes as a result of the enforced lockdown.
Three points for digital transformation
Businesses must prioritise digital transformation and form a plan of action to optimise remote working. Here are three key points for successfully embracing the digital transformation:
1) Listen. What’s working for your organisation now? And what isn’t working? A major part of this will be listening to your employees. What have been the challenges they’ve faced over recent months? What tools or training do they need to overcome these barriers?
While the ultimate decision may lie with your Board, it’s those who are ‘on the ground’, using systems day in and day out, who will be able to provide insight or ideas you may never have even thought of.
2) Tailor to your needs. There is no ‘one size fits all’ when it comes to the best digital tools for businesses. But there is a huge range of options available, that can enable you to dial up what you need to, where you need to.
Tailoring to match specific needs is particularly important for accountancy if existing systems are slow or even still rely on a manual process.
3) Futureproof. Finally, while we can’t – and hopefully shouldn’t have to – plan for another episode like this in our lifetimes, this pandemic has shown us we should always expect the unexpected.
We can’t plan for every eventuality but take this time now to consider what your business has learned from this experience. How you can use this to consider what you may come up against in the future – and how you will need to react?