It is time for accountancy firms to step up to the plate as advisors. They have a crucial role in helping their clients thrive\u2014not just survive<\/p>\n
<\/p>\n
Here in the UK at least the economic outlook is gloomy at best.<\/p>\n
Inflation\u2019s at 10.1%, the highest it’s been for 40 years. Rising costs are hitting consumers and businesses hard\u2014and many accountancy firms\u2019 clients are struggling to stay open. It seems like only yesterday that they were grappling with Covid-enforced lockdowns and layoffs, and yet here we are again, facing another existential economic threat.<\/p>\n
Accounting firms can use this economic downturn to showcase their advisory capability, to provide services that move the needle for their clients, suggesting strategies to keep them afloat or even keep them growing.<\/p>\n
So, just as with Covid, it is time for accountancy firms to step up to the plate as advisors. They have a crucial role in helping their clients thrive\u2014not just survive.<\/p>\n
The pandemic was a monumental, once-in-many-lifetimes event. When it first hit, many business owners were left scrambling, unsure of how to protect their business\u2019s futures.<\/p>\n
Accountants were an economic emergency service, acting as trusted advisors by helping clients navigate intense uncertainty. There\u2019s inherent safety in the nature of numbers. So, when business owners were faced with so many intangibles, accountants focused their attention on what they did know (e.g. their company\u2019s financial performance, government funding, sector expertise) and what they could do to protect their cashflow going forward.<\/p>\n
We\u2019re facing similar challenges right now. Double-digit inflation is placing intense pressure on businesses\u2014indeed, many of us will have never experienced such fiscal challenges before in our lives. However, firms can draw upon their experiences of helping clients through Covid to be similarly supportive throughout 2023 and beyond.<\/p>\n
While junior accountants might be more tech-savvy than senior colleagues, there\u2019s one thing they lack: experience. Today, this experience is more valuable than ever. Firms must draw upon the wisdom of their senior staff and partners who\u2019ve seen this before, who\u2019ve lived through similarly turbulent economic periods and come out the other side.<\/p>\n
However, accessing this knowledge is just the first step. Firms must then package their team\u2019s expertise and insights into practical advice to help clients predict, plan for, and perhaps even profit from, economic downturns. In other words, they need to turn internal wisdom into external results.<\/p>\n
But it\u2019s not just about internal expertise\u2014firms should also draw on historic as well as sector-wide knowledge to help their clients pave a path for the future. To learn from the crowd.<\/p>\n
Accountancy has been around for thousands of years, with the first records dating back to ancient Mesopotamia. Economic downturns are nothing new. Accountants have dealt with similar challenges in the past, and the profession has developed a rich body of knowledge that today\u2019s firms should tap into.<\/p>\n
Tools and tech might play an increasingly important role in the industry. However, firms can\u2019t neglect human knowledge\u2014this is the key to helping clients chart their way through turbulent economic waters.<\/p>\n
There might be safety in numbers\u2014but not everybody understands what their numbers mean. Firms need to translate their clients\u2019 data into actionable insights before communicating to them in an easy-to-understand manner. They need to apply their clients\u2019 numbers to patterns they\u2019ve seen in the past and explain why X figure leads to Y outcome, and how doing Z will help.<\/p>\n
Technology\u2019s great\u2014but it can\u2019t do it all alone. Business owners need advice on what to do next, blending technology-driven insights with rich accounting knowledge and wisdom. Accountants need to provide what Google searches and Excel can\u2019t do. In other words, they need to bring their clients\u2019 figures to life and chart a way forward, while considering each company\u2019s unique context, industry, and goals.<\/p>\n
Data leads to insights, insights lead to conversations, and conversations lead to valuable advice. It\u2019s as simple as that.<\/span><\/p>\n Compliance work isn\u2019t going anywhere. While clients will undoubtedly require forward-thinking advice, they\u2019ll still need firms to create and file their end-of-year statements (among other activities). Therefore, firms should work out how they can prepare compliance-oriented work as efficiently and accurately as possible, gaining rapid access to insights that will fuel advisory conversations.<\/p>\n There\u2019s little point in vastly experienced accountants spending their precious time pulling data sets together, finding small errors, or even drafting emails and communicating with clients virtually. Their time is far more valuable than this\u2014both to your firm and your clients.<\/p>\n So, what\u2019s the solution?<\/p>\n Firms should implement automation-based tools (like Silverfin) that accelerate the time it takes to complete error-free compliance work. The quicker and easier this process is, the more time accountants can spend speaking with clients. They can focus their energy on turning clients\u2019 numbers into \u2018Here\u2019s how you\u2019re performing, here are your major challenges, and here\u2019s how to prepare for the future\u2019-type conversations.<\/p>\n Firms must take action now to ensure that when clients ask for their help, they\u2019re ready. So, what does this process entail?<\/p>\n First, they should be chatting internally, working out how they can use existing resources to fuel their advisory services. Which tools can help? Which team members are particularly adept at speaking to clients? How will the firm advertise its advisory services, and which approach will it take to delivering them? What can be given for free to support clients in this difficult time and what should be charged for? The last is something that Covid taught many firms is an important distinction to make quickly.<\/p>\n For example, firms might consider a one-to-all approach, such as hosting a webinar for multiple clients simultaneously. Ask each team member to write down the 10 most common questions that clients ask them. When you do this, you\u2019ll see significant overlap between the questions and answers\u2014this will reveal what clients are yearning to know. You can then either host a webinar related to the topic or create a piece of advisory content to showcase your firm\u2019s expertise.<\/p>\n I\u2019d strongly advise firms to be more open with their IP than usual. While they might be hesitant to provide value-add advisory services for free, hosting webinars and publishing guides will help them demonstrate their credentials. In turn, this will convince clients to pay for more personalised advice tailored to their business.<\/p>\n The best firms use crises as opportunities. Tough times bring everyone together under a shared purpose\u2014in fact, this period might even help firms rebuild relationships that have become somewhat fragmented since the onset of Covid (and remote working in general).<\/p>\n What\u2019s more, it\u2019ll be a fantastic learning opportunity, especially for junior accountants. They\u2019ll learn how to hold clients\u2019 hands in tough times and will gain the soft skills necessary to become trusted business advisors. Rather than simply focusing on compliance work, they\u2019ll learn how to package, sell, and deliver their expertise to clients. This will stand them and their firm in good stead moving forward.<\/p>\n That said, don\u2019t expect the world right from the word go. Many accountants appreciate the black-and-white nature of numbers. Providing advice, however, can be grey\u2014there\u2019s no way for sure of knowing whether or not it will work. Therefore, the more risk-averse members of your team might struggle to step into the unknown when telling clients how to run their businesses. This is only natural. Over time, however, they will become increasingly comfortable using their financial expertise to provide forward-thinking advice.<\/p>\n Some firms hesitate to charge cash-strapped clients for valuable advisory services. While there\u2019s a certain logic to this, it doesn\u2019t mean it\u2019s the right approach. Business owners might be struggling financially, but if your advice generates more money for them than it costs, then it\u2019s still well worth the investment.<\/p>\n Focus on the return on investment (ROI) that clients gain from your advice. If possible, start generating case studies as early as possible to demonstrate the impact of your advisory services. You might have helped some clients thrive during Covid\u2014if so, use these examples to demonstrate how valuable your advice is.<\/p>\n Accountants don\u2019t need to be salespeople to convince clients of their value. Instead, they need to do what they do best: focus on the numbers. If you can demonstrate that your advice delivered a 2x multiplier of what you charged clients, there\u2019s no reason to shy away from charging clients.<\/p>\n Things will likely only get tougher from here on out. Leading firms use crises to their advantage, finding novel ways to help clients generate value. They adapt, respond, evolve, and profit.<\/p>\n Start planning for an advisory-led future today. Map out your internal resources, both human and technological, and create a roadmap for how you\u2019ll provide these services at scale to your clients. Build out case studies from happy clients who you\u2019ve advised in the past and start providing the relevant training to help your team be as comfortable as possible when transitioning into the role of trusted business advisors.<\/p>\nFocusing on what truly matters<\/h3>\n
Be generous with your intellectual property (IP)<\/h3>\n
Using this as an invaluable learning opportunity<\/h3>\n
Remember your value<\/h3>\n
Take action today<\/h3>\n