The past 16 months in the UK, with its three lockdowns and complex roadmap to restrictions being lifted, have caused no end of confusion and disruption. Just as businesses opened their doors, many were suddenly told to shut up shop once more.
In fact, only one thing seems to have been certain: uncertainty.
The end (or at least more control) of the pandemic is hopefully now in sight. Unfortunately, however, the hard work is not yet done. Transitioning out of Covid-19 restrictions poses its own difficulties for accountants and their clients.
As well as exploring what businesses are struggling with right now, I’d like to outline three crucial steps that accountants can take to help their clients navigate the near future.
But first let’s start with the challenges businesses currently face.
Challenges will remain long after lockdown
Pandemic-related uncertainty, combined with the UK’s sharp economic downturn, has meant accountants have been busier than ever before.
In particular, clients have needed assistance with four main areas:
- Cash flow
- Maintaining their workforce
- Dealing with creditors
- Accessing government support and grants
These areas will continue to be a focus well after lockdown ends. And while getting help to access pandemic-related government support schemes and grants will obviously no longer be necessary, this will be replaced by something just as pressing – having to pay these loans back.
Three steps to help clients plan for the near future
Each client is unique. They all have their own needs and goals – so you can’t simply adopt a one-size-fits-all approach to help them bounce back as quickly as possible.
That said, there are three primary steps which accountants should follow to help clients navigate the near future:
- Have all the data you can at your disposal to aid decision making: Technology is your friend here both to source the data from client systems as well as give you the tools you need to analyse it and report effectively. Make sure you have access to live and historic data – the more complete and up-to-date the data the better.
- Benchmark clients across the portfolio to improve your advisory services: Use this consolidated data to benchmark clients across your portfolio to unearth insights and lessons on how individual clients can adapt to improve their performance. You can also benchmark clients in the same sector and advise them of any trends so they can effectively learn from what their peers are doing.
- Internal planning: putting insights into action: Finally, use these data-driven insights to provide valuable advice and action plans. Create forecasting and planning models that guide clients’ planning. This includes both assisting clients currently facing difficulties as well as helping clients take advantage of new opportunities that are available to them after this period of change.
Data to aid decision making
The pandemic has rapidly accelerated our digital-first way of life. And while Covid-19 restrictions are easing, our reliance on technology will remain on an accelerated trajectory. Businesses must use all the tools at their disposal to gather data, identify key insights, and put these learnings into action. To support their clients along this journey, accountants must also embrace a digital-first mindset. But many firms are not sure where to start building their technology strategy to support their business and client service transformation.
Embarking on a so-called ‘digital transformation’ without a plan can be as dangerous as not starting at all. So where do you start? We’ve helped hundreds of firms with their technology strategy and have identified that the most successful follow four clear stages – we call them the four sights of connected accounting. Ultimately, it comes down to having a comprehensive data strategy (fullsight); automating your common accounting work to improve speed and accuracy and liberating the team to spend more time on advisory (hindsight); using your complete client data set and benchmarking tools to see trends in historic data that support advisory (insight), and finally using data analysis and reporting tools to drive digital-first ‘predictive’ advisory services like forecasting and business planning (foresight).
A cloud platform like Silverfin has been designed to support a comprehensive digital transformation. Starting with curing the data headache firms face daily. We consolidate, standardise and store all client data in one place for the whole firm giving accountants the access they need to the historic and live data to get their job done efficiently and accurately.
With accurate data in one place for all clients, several significant things now become possible. Automation of compliance can now take place. Time consuming reporting can be completed in just a few clicks. Accountants can create detailed reports, in an instant, confident that the data is accurate first time, freeing them up to focus their time and energy on interpreting the numbers and providing much-needed advice.
Great, you’ve onboarded each of your clients onto cloud-based accounting software and got a consolidated view of all client data. What’s next?
Use that data to improve your advisory services
Having your clients’ data stored in one place is useful – but this isn’t the end goal. The goal is to analyse this data, digging into the story it tells and what that means for your clients’ businesses. For instance, when the furlough scheme ends, accountants can use data to help their clients understand whether they can afford to permanently keep furloughed staff on the payroll.
Accountants can also play a key role in encouraging their clients to gather qualitative data to back up their quantitative findings. To better plan for the future they need to better understand their customers and the markets they operate in. For example, how will demand for their products or services change as we recover from the pandemic? What will be the impact on demand if we go into another lockdown? Encourage clients to actively speak to their target market in order to better predict how their consumers will behave in specific circumstances.
Armed with this insight and the financial data you have at your disposal, you can use data analytics to advise your clients on the financial impact of different scenarios. You can also benchmark clients and advise them based on best practice within their sector. This is only possible when you have access to a consolidated view of all your client data and can easily manipulate and analyse it. After all, having a wealth of data at your disposal is all well and good, but it’s only useful if you can do something with it.
By understanding which pieces of data to focus on and collect, and what the data is saying, accountants can ensure that their clients make key decisions based on the right insights.
Internal planning: putting insights into action
Now comes step three. You’ve implemented cloud-based accounting software – giving you crucial insights in one single source of truth. You’ve identified what the data is telling you in terms of key trends within specific sectors and benchmarked clients within those sectors. You have also highlighted where supplementary qualitative data could help.
Finally, you need to translate this into a forward-thinking plan of action.
Accountants must help their clients optimise their internal operations as much as possible: For example, figuring out correct staffing levels or, in the case of retail – which stores to keep open and which to close, and whether or not to keep on renting an office space.
Accountants will also need to examine the impact of any major changes on an ongoing basis. Ditching the office might be appealing in the short term, especially from a financial standpoint. However, if it negatively impacts company culture and mentoring opportunities, it might lead to decreased productivity and performance over time.
The pandemic may have resulted in an increase in operating costs because material costs have risen. Lead times may have increased due to import delays as a result of Brexit. These things may have a significant impact on your clients. Scenario planning will mean they can understand the impact of these changes long term and mean you can better advise them when it comes to supply chain and pricing strategy decisions going forward.
Securing your clients’ future
Nothing’s certain. While we transition out of pandemic-related restrictions none of us know what the future holds.
That said, there are certain steps that accountants can take to help their clients prepare for business post-lockdown.
Accountants must ensure their clients have 24/7 access to up-to-date, 100 percent accurate data. They must analyse this data with their clients or highlight areas where additional information is needed. And finally, they must translate data-driven findings into short- and mid-term strategies for success – helping their clients do more with less.
Technology is your friend so by partnering with the right company and solution, you can make the process of acquiring, interpreting, and reporting your clients’ numbers as quick and painless as possible.
Ready to get started? Book a demo and speak to a member of Siverfin’s expert team today to learn how we can help you do just this.