How has Coronavirus impacted the accounting industry?
In the face of Coronavirus, the world has seen some tremendous changes and challenges. It has been incredible to see how resilient and adaptable the human race has been in overcoming this new way of life! Interestingly, from a business perspective, Coronavirus has shed light on the versatility of British business and recognised a shift…
In the face of Coronavirus, the world has seen some tremendous changes and challenges. It has been incredible to see how resilient and adaptable the human race has been in overcoming this new way of life!
Interestingly, from a business perspective, Coronavirus has shed light on the versatility of British business and recognised a shift in how the finance and accounting industry has found new ways of operating.
With the economic climate the way it is, the truth is businesses are still failing, regardless of how much government support there is. Fortunately, accounting is one industry that isn’t as severely affected as others. There will be redundancies and cost-cutting exercises, but coming out the other side, there will also be many opportunities for those versatile accountants looking to flourish and become stronger than pre-pandemic.
Covid 19 Impact on Accounting Industry
The scope of this article covers our four key takeaways and effects of how the Accounting industry has changed in line with the trials and tribulations of Coronavirus.
1. Sudden changes and the ability to pivot – The release of new government guidelines and legislation saw an introduction of new policies and procedures that accounting firms have had to adapt rapidly. Whether that be the closure of standard office working environments and transitions into digital practices or changes in standard payroll and bookkeeping functions, i.e. furlough and statutory sick pay claims changing from 4 consecutive days to 1. Accountants have had it tough; everyone should be incredibly proud of the versatility, rapid adoption of new technology and how forward-thinking our industry is.
2. Economic downturn – Coronavirus has reduced economic activity and, as a result, been catastrophic for some businesses and whole industries alike, especially hospitality. The virus effects are widespread and have resulted in companies going bust or having to decrease overheads. It simultaneously affects the client base of accountants, with many practices losing clients, which cyclically results in a reduction in revenue. Given these facts, it seems to have prompted a wave of innovative and entrepreneurial stances across the nation, with many accountants now taking vital initiatives by investing in CRM and cloud-based software.
3. Getting on top of client invoicing – Coronavirus has meant that processes, guidelines and payroll have seen adaptations quickly. This caused a sharp rise in workloads which many accountants are not charging for. Accountants up and down the country are now busier than ever, trying to keep their clients informed and ensure their internal processes align with the new guidelines, ultimately taking up more of an accountant’s time. The time and services given must be billed, especially given that the government offers grants for small businesses to pay for their accounting services!
4. Industry recovery and gig economy boom – Finally, the accounting industry has become somewhat more competitive. Similarly to the points mentioned above of adopting CRM software such as Nomisma, accountant firms have to increase marketing budgets and innovate ways to encapsulate and obtain new clients and businesses to remain competitive. As with all industries, redundancies are being made, and as a result of a lack of jobs, the population are beginning to look at the self-employed route as a viable option. Self-employed accountants are flooding into the market, making it more competitive to get new clients than ever. Likewise, there will be thousands of new businesses and self-employments being opened. This is also a great opportunity; where will they be looking for help, what platforms will be they be on, how can you help them and what makes you different?
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