Welcome to the theater! It's been a while since we've been able to sit with strangers in a dark room before an illuminated stage. Watch those heavy red curtains lift while the audience sits in quiet anticipation. Enjoy the show.
ACT I: John opens a small accounting practice. Efficiency and competency take center stage in sparkly costumes. John's first big challenge comes when his competitors transition to cloud accounting software and his efficiency and competency lose their lustrous glow. John must save the day and convince his obstinate staff members that moving to the cloud is the way. A fierce battle is fought and John wins - passing his first heroic challenge on the quest for accounting greatness.
ACT II: The next challenger is darker and graver than the first. A pandemic sweeps across the world. Whole industries come to a halt, and John and his staff are forced to work from home. John's staff are reluctantly grateful to him for moving to the cloud when he did. Uncertainty is everywhere and tension is high. Doctors sword fight with Coronavirus monsters who wheel across the stage. Haunting orchestral music plays.
ACT III: Emerging from the worst of the pandemic, John discovers that his practice is more profitable now than it was in ACT I! The mist of doom dissipates and John strolls across the stage and through the gates of 2021, whistling merrily.
Denouement: The narrator's voice booms wickedly overhead, "Little did John know that hiding behind the curtain of profit were a devilry of gremlins that would make his post-pandemic transition a nightmare..." The gremlins pull aside the curtains, rubbing their hands together and cackling.
The stage lights go out and the house lights return.
Everyone turns uncomfortably to the person sitting next to them. Yes, this was an elaborate way of saying that you shouldn't be fooled by the play of high profits in 2020. Behind the playfulness, there are real gremlins to dodge.
Behind the play🎭
Did your accounting practice generate a lot of profit during the pandemic? It may seem surprising, but you're not alone. When we analyzed the anonymized data of approximately 320 accounting, bookkeeping, tax, and auditing practices in the United Kingdom for the two fiscal years of 2020 and 2021, we found that although sales went down, profit went up. The accounting practices that we analyzed averaged at 24.5% net margin for the 2021 fiscal year, a 21.2% increase in net margin since the 2020 fiscal year.
Similarly, when we analyzed the data of 160 firms in Australia for the same period, we found that profit was up with firms' net margin increasing by 20.1% during the pandemic.
Why was 2020 such a profitable year?💸
So let's look at the big question: when the rest of the world was in turmoil, why did accountants do so well? There are a number of factors that came into play here. Namely, COVID-19...
forced many considering a career change to pause and wait until the world went back to normal
led to economic stimulus and relief programs that business owners needed broken down for them by their accountants
prompted many accountants to put nearly all discretionary marketing and business development spending on hold.
This meant that costs were low and client demand was high, while staff were still at hand. But, you shouldn't think that the coming year will look the same. The great resignation has been widely publicised, and times are changing.
Why you should be concerned🧐
COVID-19 may have pushed all other news stories to the back of the paper but it didn't eradicate them. In fact, the pandemic may even have exacerbated some of these challenges! Some these key issues include:
Holding onto and attracting the best staff while managing succession
Offering more valued expertise and services
Attracting better clients.
Refocusing your attention on these old problems can be difficult, but it's imperative that you don't neglect them. So, let's take a look at each of these challenges and how you might address them.
1. Holding onto and attracting the best staff while managing succession
To hold onto your best staff, you need to show them why it would be worthwhile to stay. And the things that keep your current staff with the firm are likely the same things that will attract new employees to you.
Here are some suggestions of practices to implement to help with retention, hiring, and succession planning moving forward:
Have a big vision: let young accountants know that their work matters, they're going to make a difference, there's a purpose they'll serve. The desire to serve a purpose is particularly strong among Millennials and Gen Zs. Think about your vision, mission, values, and impact, and broadcast these to new recruits - and current staff too.
Offer a structured partner development program: show that there is a process, path, timeline, and a way to advance to the next level.
Be a good leader: pursue leadership development opportunities, and improve your non-technical skills, so-called "soft skills". Shift your mindset to see those you supervise as vital to your work, rather than obstacles to you getting your work down. Work on your delegation skills and get to know those you lead.
Consider more flexible work options: this could include more flexible hours, work from home or work from anywhere policies, as well as increased leave opportunities so that your employees don't burn out.
Retaining your top talent, attracting new talent, and finding the right fit for succession can be difficult and stressful at the best of times, but during the great resignation, it's more important than ever to do what you can to make your work environment a place where employees feel that they are valued.
2. Offering more valued expertise and services
Another issue that accounting firms are increasingly encountering is the demand for value-add services. For instance, clients have been turning to their accountants more and more for advice, and the latest accounting technology has empowered accountants to provide that advice.
Choosing to offer value-add services can give you the edge over your competitors. Some of the additional services you may want to offer include:
Thought leadership: a means to demonstrate your expertise and increase brand reputation via webinars and other presentations, blog posts, articles, and videos;
Technological know-how: leveraging the latest technologies such as cloud accounting software, artificial intelligence (AI), data analytics, and automation to deliver real-time financial information;
Business valuations: providing clients with a documented assessment of their business, its assets, liabilities, and market position to help with mergers and acquisitions, succession planning, financing, business disputes, or bankruptcy protection;
Cash flow management: assisting with cash flow projections to help clients determine when and how to pursue lines of credit or other financing to ensure that they're on top of their accounts payable and salaries;
Global growth: helping clients to move into foreign markets and conduct business abroad by navigating new tax, payroll, tariff, and financial regulations;
Succession planning: negotiating the complex and often emotional issue of succession, estate planning, and estate taxes;
New business development: assisting entrepreneurs in establishing their businesses with the help of business plans, business financing, setting up accounting software, and so on;
Part-time chief financial officer: offering part-time CFO services for growing businesses to help with financing, strategy, and regulatory requirements; and
Bank financing: assisting clients in their preparations for important financing rounds by offering comprehensive financing planning services such as a business plan, tax returns, business credit report, financial statements, and bank records.
By using technology like Syft Analytics, you can transform raw data into clear visualizations and reports, saving you time and empowering you to offer clients the valuable actionable advice that they want and need.
3. Attracting better clients
To attract new, better clients - there are a number of steps you can take, such as:
Defining your ideal client:
To determine your ideal client, you need to look at your current client base, figure out who you like working with and who you don't, and which niche suits you best. It's also worthwhile to figure out the goals of your ideal client, her particular pain points, and what she really needs.
Figure out where it is that you are likely to find clients you'd like to work with. Is it at certain events, on certain online platforms like Facebook, Twitter, LinkedIn, or Instagram? Be present in the places where your ideal clients are present and make your presence known.
Asking for referrals:
To attract more clients that fit your ideal client profile, ask existing clients to refer you to their friends, family, and colleagues. Word of mouth is an old marketing tactic but it's still one of the best ways to find new clients.
Going above and beyond:
Don't just offer your clients what everyone else is offering them; go the extra mile. Do research into their unique needs and problems, get familiar with any software that they use. Pay attention to each client and make sure that they feel seen and heard.
A different denouement
While you, like our play protagonist, John, may have found the last year to be profitable, be careful not to fall into the trap of thinking that this automatically means that the next year will be profitable too. Now is not the time to get comfortable. Now is the time to tackle those gremlins before they take center stage - and take your profits with them.
What do you think?