Seven Covid-driven deliverables clients need today.
What’s your opinion of Client Accounting Services?
By Hitendra Patil
Coronavirus caught the entire world totally unprepared for its aftermath. The impact on economies is unfathomable. Accounting firms are not immune to this unprecedented situation.
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But, “same as last year” or “as always” will not work for accountants in the immediate and distant future. If you haven’t yet done so, it is time to start thinking about how are you going to overcome the crisis, and even thrive in the near future and beyond. Especially important is to think about how client accounting services (CAS) will emerge as a much-required and more valuable than ever service accountants can provide.
What are accountants doing now?
So, other than helping clients obtain small business loans and apply for Paycheck Protection Program (PPP) benefits, what are accountants doing now? Based on daily conversations with accountants over the last six to eight weeks, here are some core focus areas of accountants:
- Health safety of employees, and business continuity
- Helping existing clients in their aim to remain solvent
- Remote operations and online collaboration
- Implementing more cloud technologies at the firm
- Process and cost optimization at the firm
- Providing more services, including more advisory to clients
- Investing in growth measures to attract new clients
How are accountants now thinking about CAS?
One of the silver linings of the dark clouds of corona-impacted economic challenges is that business owners are interacting far more with their accountants, compared to that about six or so months ago. These interactions, in addition to being commercial and compliance-oriented, have also been highly emotional in these crazily anxious times. Accountants have seen far more busy times to meet the deadlines of PPP and SBA loan programs. All of these efforts have ensured that, in general, clients are very grateful to their accountants and that accountants have accumulated very strong goodwill in a very short period of time. Many accountants I interacted with told me that they have waived tens of thousands of dollars in advisory and process work fees for clients for loans and PPP related work.
HOISTED FROM COMMENTS: “I question your comment about ‘silver linings.’ Don’t misinterpret this question. I love the profession and have confidence in it. However, for years I have preached that it needs to change. Unfortunately now, it needs to change overnight.” – Jon Baron, former Managing Director, Professional, Tax & Accounting, Thomson Reuters
Importantly, clients have increasingly experienced and recognized how much more accountants can help their businesses, beyond traditional accounting, payroll, compliance, and tax services. These experiences are fully expected to turn more clients obtaining more services from their accountants, as business owners would want to fully focus on their own businesses. One of the key factors that’s driving this new thinking among business owners is the experience they have had in recent times – how competent, capable, and resourceful accountants are in quickly navigating the changing landscape – economic and legal-commercial – to meet tight deadlines successfully. Without accountants’ help, thousands of businesses would have missed obtaining the PPP and SBA loan benefits. Clients have clearly experienced the lack of their own “professional capabilities” that accountants have in abundance.
Given these new shifts in clients’ thinking processes, accountants are already planning to include more client accounting services in their offerings. Many accounting firms are expecting, and working on, generating more revenue from existing clients, because CAS will also make the clients more “sticky.” It is also much faster and economical for firms to sell more services to existing clients who are more receptive to explore such possibilities now.
Seven Covid-driven client needs
In particular, here are the specific services accountants are working on offering more to their clients.
1 – Business planning services
Many accounting firms are planning changes to their practices – not just in core work but how they will run their own “business.” These freshly enhanced capabilities are making accountants help their clients more practically in planning their businesses.
2 – Cost optimization advisory and working capital management services
Firms themselves have rapidly worked on optimizing their own costs and this experience is helping firms offer that expertise to their clients now. The measurable value of each dollar in a given business is something accountants understand masterfully. This core competency can be leveraged to offer working capital management services to business clients.
3 – Different tax planning and advisory services
The economic stimulus and PPP program will create new compliance requirements that are likely to have a significant impact on the taxability of businesses. There is no other professional segment than accountants to help clients with tax planning and advice.
4 – Core, client accounting services
More work will be done by firms while clients will have no choice but to focus, more than ever before, on their core business transactions/operations, leaving professional accounting work to professional accountants. Automation and integrations across many solutions mean accountants can achieve excellent process efficiencies at their firms to be able to service many more clients and process much more work without adding resources at their firms.
5 – Payroll processing and compliance services
Never in the recent past would have clients recognized the need to keep payroll records up-to-date and fully compliant as in these unprecedented times. This is the much-needed trigger for business owners to take the help of professional payroll service providers to keep things correct at all times. Even with large scale unemployment, small businesses will still employ millions of people and many of these small businesses that did not have robust payroll processes will find greater value in professional payroll services. As people return to work in the post-corona world, this segment will grow quickly.
6 – Technology advisory services
Accountants have been adopting cloud technologies for many years now. Even those who still had desktop solutions at their firms have now felt the urgency to move to the cloud. These experiences have turned into technological expertise for accountants. And no wonder accountants are finding themselves advising more clients on implementing technologies in client businesses more and more, at the very least in those businesses that do not involve purely physical labor.
7 – More interactive and collaborative services
Social distancing made it necessary for accountants to be much more interactive and collaborative. Clients that traditionally resisted paperless way of working with accountants have more or less adapted to the new ways of working. The most significant impact of this has been the increased interactions and collaboration between clients and accountants. This is paving the way for clients to understand that accountants can provide real-time services even from miles away, liberating more work to accountants. Accountants are adapting their business processes accordingly to make them more interactive and collaborative, thanks to technology. In other words, it means clients will be more open to working collaboratively with accountants, not just after-the-fact.
Crisis brings opportunities
Almost everyone has now been forced to rethink how to work and do business. Accountants are not immune to this effect. It is actually turning out to be an opportunity for accounting firms to rethink their business processes, technologies, services mix, and even business models of their firms. Reevaluating the allocation of the budget at the firm to productivity enhancement, and more importantly, to process innovation using more technology solutions is the opportunity you don’t want to miss.
What steps are you taking at your firm to address the new normal?