Seven actions accountants are taking to overcome pandemic-induced challenges to their practices
By Hitendra Patil, Head of Customer Success, AccountantsWorld
I recently read in an industry publication that the pandemic made the accounting profession move three years faster in the shift to the cloud. In other words, if the pandemic had not occurred, and the trend of previous years had continued, it would have taken the profession three years to reach the number of accounting firms that moved to the cloud in 2020 alone. This isn’t surprising, given the survival threat caused by the virus. Firms were forced to operate in the cloud, almost overnight, whether they had cloud solutions or not.
When such seismic shifts occur in a business, in an operating model, and across the whole industry, it is not just a threat. It is also a huge opportunity to unleash your practice's potential value – if you take conscious steps to look for value innovation opportunities.
The pandemic created new questions. The answers are critical to the future of accountants.
What have accounting firms been doing to better leverage the pandemic-induced shift to the cloud? How did they thwart the apparent threat, and also actually enhance the value of their firms? Were there common actions taken by successful accounting firms, and if yes, what and why? How and what did the accounting firms implement after they decided to move (more or entirely) to the cloud?
It is not often that a profession's core fabric transforms so quickly. And it is not easy to figure out what should be your response to an existential threat to your and your clients' businesses. So we decided to critically review notes from all of our interactions with accountants in 2020. It first distilled the top critical questions that the pandemic created. Then, we believe we found reasonably justified answers to these crucial questions. After that, we discovered the key actions accountants are taking to respond to the pandemic threats to their practices.
Seven actions accountants are taking to win pandemic-induced practice challenges
AccountantsWorld provides cloud solutions exclusively to accounting and payroll firms. Because our customers are only professional accounting and payroll service providers (we don't sell to their clients), we interact with such professionals day in and day out, year-round. In other words, the insights mentioned in this blog post are from accountants just like you.
Seize this opportunity to extract more value from the shift to the cloud.
From our interactions in 2020, we distilled the seven most common actions that firms like yours have implemented to turn the shift to the cloud into a multi-pronged opportunity to enhance the value of their practices. We are confident that these actions can help your firm too.
First and foremost, firms that better adapted to the pandemic challenges had recognized that their then-current technology and processes were not adequate to perform optimally in the dramatically changed times. Those firms took the challenge head-on and proactively and speedily identified the changes required to respond to the threat. The changes they implemented resulted in faster-to-market new services offerings, moving to the cloud quickly using integrated platform/solutions, and most importantly, providing much quicker critical services to their existing clients. The result? These firms helped more of their existing client businesses survive and even thrive, gained more new clients, and in the process, remained financially robust firms.
The key to this winning method? These firms identified and embraced the need to change early, and worked to find and implement alternatives to strengthen their firms. We found most of our new customers (accounting and payroll firms) took anywhere from 2-6 weeks to implement our solutions reasonably well in their practices. The key learning was that change is not necessarily a complete overhaul and can be successfully implemented in a short period of time. At AccountantsWorld, we augmented our resources to provide free concierge onboarding and training, and support to ensure firms learn our solutions quickly.
Firms which had mostly desktop solutions, or which were using a combination of desktop and cloud solutions, made the decision to embrace the cloud as much as possible. While doing so, these firms evaluated multiple cloud solutions in the marketplace. If one has to change technology solutions because of work-from-home needs and enhanced requirements to deliver services on the cloud, why not take the opportunity to make the most of this change by finding the best solutions out there for your needs? No doubt, that was the most common feedback we got from our prospects and clients all through 2020.
What was even more impressive was the impact of such a decision on the firms' business models. The intent – and the result – was that firms could handle more clients per staff, get more clients from multiple states, and offer more services without adding resources. The key result? Firms achieved profitable scalability.
According to AICPA studies, firms of all sizes have been reporting staffing shortages among their top challenges. On top of that, the pandemic made work-from-home an absolute necessity. Almost all industries that deal with data, including accounting and payroll, are projecting that these work-from-home preferences and needs will continue in 2021 and long into the future. Desktop solutions can expose firms to data security risks and logistical issues. Cloud solutions, therefore, emerged as the #1 choice among firms like yours. This shift to the cloud has also provided an added advantage to the firms: access to talent from a more expansive geography, even lowering the cost of hires in some cases. It certainly helped that technologies like Zoom, Microsoft Teams, and Google Meet made staff interactions easier and more seamless.
One of the most common pieces of feedback we received from accountants is that they have been acquiring new clients from multiple states at a faster rate than ever before. The key reason firms cited for this was an enhanced ability to offer online services because of their move to the cloud. Firms also reported that existing clients slowly started buying more services from the firm, because of the acute need for business owners to focus more on their core businesses and let professional accountants do the accounting / payroll work. The cloud-enabled readiness to offer more types of services helped achieve this welcome result.
Process and profit transformation
Several firms initially felt forced to move to the cloud. But soon, they recognized it as a silver lining in disguise - first to be able to ensure continuity of services to their clients (when going to the physical office had become practically impossible) – and then to optimize their internal processes based on cloud solutions. It was an opportunity that delivered two welcome results to the firms – process optimization (serving more clients per staff), and the resulting increase in revenue and profit per staff. It truly felt like transformation for many firms because the new profitability was significantly higher than in the past. Desktop users discovered an even greater impact on their firms. Another key effect has been the welcome changes to how firms delivered their services to clients, and how clients now needed to collaborate in real-time, online. The herculean efforts of the past to urge clients to be more tech-savvy disappeared. Instead, clients proactively embraced this change.
This is the most easily understood action among accounting firms – the need to modernize their technology stack. The seemingly no-choice constraint became the preferred action among the firms as the benefits far overweighed the time, effort, and resources required to implement technology modernization. The sheer growth in self-service by clients, enabled by collaborative cloud solutions, ensured that firms reaped the real benefits of moving to the cloud. Our prospects and new customers told us repeatedly that because AccountantsWorld solutions are sold only to professional accountants (and that firms can provide collaborative access to clients), it gave firms the much-needed control that hardly any other solution can provide. It was commonly mentioned that the other largest technology solution providers out there are actually all geared up to take business away from accountants. This opportunity to modernize technology has also allowed accountants to protect their business by moving to professional solutions like Accounting Power and Payroll Relief.
Client experience transformation
At the core of all the key, common changes that accounting and payroll firms implemented throughout 2020, none was more critical than meeting clients' changing expectations and providing a transformed experience. Anytime anywhere access to business information is an absolute necessity for clients now. Clients have quickly learned to, and prefer self-consumption of such information – by using client portals and mobile applications. Firms have increasingly reported that more and more client work is moving from after the fact/write-up type of work to more real-time, collaborative work by accountants. Businesses need to be more alert to their cash-flows, trends in revenue, and profit; hence, they need professional accountants to guide them more than ever before. Thanks to cloud solutions, the pandemic has only augmented accountants as the most trusted advisors of their clients.
What can you do with these critical and proven insights?
As a firm owner/partner/decision-maker, your fiduciary responsibility is to do better for your firm and your staff. Simultaneously, more and more clients expect you to be professionally responsible for helping them navigate the tough times. Fortunately, we have useful new insights about what has worked well for firms like yours to achieve better results.
At AccountantsWorld, we have learned the roadmap and what it takes to guide accounting firms to achieve similar results. Leverage our expertise by booking a no-cost, no-obligation, 30-minute live demo of our 100% cloud, professional solutions exclusively for accounting/payroll firms like yours.