7 Practical Lessons Accounting Firms Can Learn From COVID-19by
While we will continue to reel from this global pandemic for quite some time, a few lessons are emerging from the crisis that may help CPA firms, their team members and their clients change behaviors and create some new perspectives.
Accounting firms—like just about every other business and industry today—are feeling the negative impact of COVID-19. And, while we will continue to reel from this global pandemic for quite some time, a few lessons are emerging from the crisis that may help CPA firms, their team members and their clients change behaviors and create some new perspectives.
Here are observations that may help you think differently about business now and help you put plans in place for your firm’s future:
- Clients of All Sizes Need and Appreciate Advisory Services: COVID-19 is giving many firms and their clients the opportunity to be re-acquainted as partners in business. Advisory services should be an ongoing part of a firm’s service platform—and should come with value-based fees and possibly a re-engineering of your client base. Further, focusing on helping others is a great positive distraction from our own challenges and could lead to greater productivity.
- Remote Working Offers Great Benefits: When remote working is managed properly, workflow prioritization becomes more accepted, accountability becomes easier to implement and communication becomes clearer and more transparent. Of course, every firm will have its own technological comfort zone for staff and clients. A permanent operations committee composed of accountants, technologists and support people needs to be set in place to keep your firm enjoying the benefits of remote functionality and the flexibility that comes with it. Not working from the office may bring completely new viewpoints from your team that could open the door to new employees, new clients, new services—and perhaps new owners.
- Technology Is More Than an Investment: Firms must have a mindset and behaviors that are technology driven. Real-time access, analytical efficiency, graphics and visualization, data mining and sharing, trends and futuristic expertise must be a common way of life for firms. There must be a technology vision plan in place. Briefings with outside experts should take place four times a year. The technology budget should be reviewed twice a year and collaborative education should be pursued with other firms.
- Collaborative Work Arrangements with Other Firms May Enhance Business Sustainability: Firms should explore arrangements that create opportunities to co-venture and/or co-partner, such as mergers or other firm combinations. While this may seem like a more stressful exploration now, the increasing accountability and changes to structure in the short term will be outweighed by the resources, finances and peace of mind that come with joining with the right people down the road.
- Practice Protection Plans Are Critical: Especially for solo practitioners and smaller firms. While we hope and pray that we will never see another pandemic like this one, other illnesses and tragedies are inevitable. The worst way to handle a practice transfer or coverage is under the gun with no plan and no process. Take the time now to put a protection plan in place for uncontrollable events.
- Maintaining Metrics and Standards is a Must: KPIs need to be set, measured, monitored and complied with. Production and collections per full-time employee are drivers to many decisions that need to be made. Stimulus plans should not affect smart business decisions. Receivables must still turn, WIP must be billed in a timely manner, and jobs need to be managed to a budget. Controls need to be in place to put work on hold and to determine when work should be done. Dashboards must be in place and senior level accountability must be the norm. Budgeting for the firm should be done for certain line items every two weeks and for other monthly or quarterly.
- Remain Disciplined with Your Client Base: In tough times, there will be an impulse to hold on to every client you can. That’s understandable, but not practical. Firms should always have their own definition of what makes a good client—and always be on the hunt for them. Marketing and business development experts should be tasked with defined functions and results. It may be a good time for a disciplined scaling of your client base and putting in place a process to grow and be ready for more good clients in the future.
These are certainly challenging times for all of us. But it’s important to take a little time now to see how an event such as the coronavirus pandemic can point out some inconsistencies in the way we do business now—and how they may lead us to better outcomes for the future when this crisis is over.
A strategic adviser to hundreds of CPA firms in the Mid-Atlantic region, Ira works vigorously to strengthen firm performance. Noted for his probing and conversational approach, Ira created Managing Partner On-Call, a coaching process to help Managing Partners make the right impact and test their ideas. Optimum Strategies' primary focus is on...