Accountancy Firm Owners - How To Respond To The C19 Crisis
This transcript on how to respond to the C19 crisis was created using AI and may contain some mistakes.
hello, welcome to our Tuesday C19 Crisis Series for the last two to three weeks as Corona Virus came on the horizon on, then came into reality for day to day. Business is, we’ve worked a lot with accountants in the whole area of dealing with the technical issues and dealing with the client issues. But today’s session is a little bit different because Corona Virus does present an opportunity for accountants and accountancy businesses. So today I’m joined by Carrie Reader and an internationally acclaimed accountancy firm owner and but also a business advisor and a multi published author with another book in the pipeline.
And so card is going to share with us today his insights into Corona virus we’re going to look at, Well, you know, the short term, what should what should we be looking at now on what our other people looking at now? But then also looking at, Well, what does the future look like? And Carol is going to share his expert insights and as a firm owner and as well as a visionary on a significant influence on the accounting profession. So, first of all, I just want to welcome Carol Carol.
Thank you so much for coming on with us today. No deaths. Thank you so much for inviting me. It’s an absolute privilege. And Carol e. I see you’re working from home. That’s not your your normal domain. So, like, like a lot of, like, a lot of the world, and you’ve got a slightly different backdrop today and what you usually have. Yes. So, I mean, to be fair, I actually work. I personally have worked from home a lot more than my team half,
But it’s been a change for all of us, hasn’t it? You know, for May I would normally be out and about. So I’m a people person. I like meeting people face to face, but yeah, I’m stuck in this little, so back into my house. Makeshift home office. Excellent. Excellent. And Carrie, what are you What are you seeing happening out there on DWhite? Are you saying that that that the focus should be I kind of have described this that the first couple of weeks of crone of ours were dealing with the shock on dth e implementation,
the remote working, the dealing with the clients. And I think the first wave has no past by we’re kind of in the eye of the storm here at the moment. What as people emerge now and begin to look and really assess their business as accountants, their clients, businesses and what they need What? Where is the starting point? Do you think? Okay, so I messed It must report questions. We’ll try todo couple of every part of it. A to first. You asked to where we are on.
I think you’re absolutely right that we’ve we’ve gone past, be initial fear and panic now at least are certainly home. Um, you know, I think that for me, this process for accounting firms could be broken down into four key areas. So the first area was given panic on fear and panic really kicked in, I would say the second week of March on the second week of March. The reason I say that is it was my wife’s birthday. We were on bond. People were coughing near us on.
Do you know what it twisted her mind home? Do we want to be sat next to these people? That a coffee? And that’s the first time. But we’ve ever been conscious of on external health issue that could be transmitted in the same way that a virus can. You know, normally, if it’s a cold or flu, you wouldn’t think about it. But that Max when the reality here I also had a speaking stopped from the enough. My last speaking suffer I had done aan de hand sanitizers abound,
and the conversation was was all around the virus. It was around. How are you washing your hands for and so on? So is at that point that fear and panic kicked in on DS. The UK measures certainly took place at the end of that week. Start the next week. Ondo Accountancy firms have been in that stage, I would say for about two or three weeks, where now hit in the point of reflection of empathy and being there for clients. So, as you say, the eye of a storm,
the worst has happened insofar as the stock markets into powers Theo, economic shock and so on, without the point of being able to calmly reflect on what’s happening on making sure that we help our clients as much as possible. I think we thing got the next stage which is going to be a slow down. I think that slow down will be the natural impact of the lock down on the fact that businesses have stopped trading on Ben afterwards. We’ve got to deal with the growth of the resurgence because whilst this is being called of the session,
you know it’s been referred to as a recession in the media. It’s not like the other recession in that the economic fundamentals before we went into this were actually pretty sound, you know, we were we were in a pretty good place. It wasn’t like two thousand seven two thousand eight, where the financial institutions were carrying a lot of bad debt on DS over inflated property markets and so on. Instead, the fundamentals were good, but it was an external event What is known as a black swan that caused best onboard.
It’s probably more akin to a wartime scenario where the announcement of war’s taken place but fear and panic has subsided to some extent. We’re now dealing with the fallout, but there should be a resurgence coming up in, I don’t know, maybe three, maybe six, maybe nine months. We don’t know how long this will be a Yeah. I like that fear and panic reflection and empathy and slow down growth and resurgence. It’s very, very clear. Very succinct. Yeah. Now I think the challenge for accountancy firm owners.
He wants to pick out some challenges here. I think there’s been some massive opportunities. However, the challenge, but I’m seeing is but firm owners haven’t necessarily correlated. But the slow down is going to happen. If I haven’t seen already, it will kick in soon because the let’s be honest stairs. If your clients have shut down, they’ve closed the doors for three months. They don’t care about filing tax returns or completely Mary camps on. We’re going to find what is already a fairly seasonal business is going to have the seasonality enhanced on.
We’re going to have a time. We’re twittering our funds in a month or two. Remember gonna find huge workload as that work actually needs to be done. At some point on. That’s the That’s the big alarm bells ringing to me, but I don’t see others unnecessarily reacting to. Yeah, we’ve talked about this with our our prophet pro members that it’s it’s looking at how this short term is handled because the same work is going to be need to be done on. Maybe there will be an adjustment of tax deadlines,
but I’m not sure whether I’m not sure whether whether, whether either the UK are the Irish government well, really want that. But it’s there’s going to be this massive amount of work to be done. We’re seeing some people know where, as part of their, you know, the UK for low plan the Irish subsidy scheme are different. But just factoring in things like annual leave like you don’t want to everybody coming back. And now we’re going to have we’re going to have. So let me show you what we’ve done in our firm.
I can I can talk in more detail about my firm, and I can talk anecdotally about other firms. But we furloughed. I’m going t o guest when chips and about staff valley ality is. But that might need to be closer to thirty pretty quickly. That might need to even go up to potentially fifty, depending on how intense for slow down is love of them. The details of one we fellow in the important thing here is We’ve been very clear on the groupings of staff members that need to be furloughed on DS were able to move quite nimbly.
We’ve made all staff members aware of the litter process we’re going through on do we to begin with, we started with from a remote work in perspective, very non core staff. So what I mean by that is our receptionist who Yes, she could be redeployed. But actually her job is genuinely not needed in the same way, because there’s nobody walking through the door. One of our new business executives who was focus solely on new franchisees Recruitment Franchisee recruitment has slowed down across the UK. So s so. She had been furloughed.
Andre, the most junior apprentice who needed pretty much data they hand holding. We’ve been expanded out, get to the twenty percent wave and team members who had non critical roles at that point, critical not being critical. Winter flowers business as usual. But political winter fathers can may help how clients get through the next three months and keep the lights on. So that’s really how we’re looking at it now. Other steps. But we’ve taken we’ve mandated, but our teams take at least half of that and you leave before the end of June.
So so they’re all required to take half of them annually pra vision between now and June. What that does is it means that we’re not so impacted when things get busier afterwards. Because the natural temptation for team members is that you know what they don’t want to go on holiday at the moment because they’re just going to sit in the garden like making your weekend. Let’s save up till July August and have a holiday in the sun. Bat’s gonna cause us some massive pain in our business, so we’ve had to limit the risk of that.
We’ve also made sure that so Ben and I be to co owners of a practise. We’ve decided effectively to furlough ourselves in terms of payments. So whilst we’re doing more than we have done for a long time, we’ve reduced our own payments to eighty percent. The reason, but we’ve done that is not so much from a cash flow perspective because the reality of the pounds and pence of actors it doesn’t touch for sites of our business and our usual cash collections out. Dividends are minimal. Really. Bullet gives be right signal of intent.
If everyone staff member asks us what we did or if we ever need to go to the bank to ask for extra funding, we can hand on heart say, Look, we followed what? People across the country have done so, so very first steps. But we’ve taken initially. But the key to this, I think it’s about being flexible as well. It’s about being able todo to turn the tap on and off as quickly as possible because we don’t know quite when the slow down will happen. If it will happen.
Yeah, that’s just my crystal ball at the moment. We don’t know how long this will stretch out for. Yeah, on d Think that’s important car like it’s planning for a worst case scenario and hope it doesn’t happen. Absolutely. Plan for the plan for the worst case scenario on Ben. Hopefully we will get a different result in terms of teams. Carol, Like the approach that we took internal Iwas from the from the start of March we have we’re having full team meetings, all hand meetings. We’ve been clear and transparent.
How do you feel the teams are taking these changes on what would your advice having gone through the process yourself off of following and reducing Andre and putting every too remote? How have you handled the communication? Okay, so I have not been done it involved in communications. But I can’t feed back what I’ve heard on the ground. So the communications were primarily through our executive board, so I’m not actively involved in the business. But the executive board of S O. The executive board were communicating these Hoover daily huddles,
but we’ve been running them only on very include one to one conversations with the individuals involved. I don’t believe Violet would have come as much of supplies because the reality is for our team members. They know people who’ve been laid off more to the point, they’ll know people who have been furloughed but aren’t being paid. You know where very employers are waiting for the government to pay or similar scenarios. They all know people who’ve lost their job and haven’t been furloughed. They’ve just been literally made redundant.
So actually, we’ve been able to demonstrate that we’re doing it in the best way possible. You know,
we’re not doing it over the aggressively. I’ve heard some. I’ve heard some holler storeys days now. I don’t know names.
I don’t want to know names, but I know a firms who are furloughed staff and ordered them laptops to work from home at the same time,
which is called You cannot do that. We’ve made sure that we’ve done everything because ethically as we can,
we’ve made sure that if a team member has been furloughed, he’s been done with as much empathy as possible as well,
on also with a real clarity. The reason for this is to protect the business longer term on and,
you know, ever bear to make the most of this time personally as well. Yeah, yeah, And you see that everything here is that the teams that we’re talking about,
the teams in my office, the teams in your office that the teams in your office to see over joining us,
it’s they’re accountants. They know they understand, you know, they know they understand. They they appreciate what’s happening.
So transparency, transparency is, I think it’s critical. Absolutely. The reality here is accountant can sometimes certainly accounting practise owners,
and I hope you don’t mind me upset and four hundred and fifty of among Miss Cole. But accountancy practise.
Owners can sometimes believe I need to keep things confidential on the books. Lied to be hidden. But look,
team members know when clients are phoning from up, saying they shutting the doors. And can you help You have a team?
Members know what’s going on on. It doesn’t take too much intelligence to work out, but whilst they might stay as a client,
they might stay open. Is a business longer term in the short term bears the very real risk. But instead of paying within fourteen days,
they might take three months to pay. Cash flow could potentially be a real impact. So, you know,
I think members aren’t sheep. If they see what’s going on ever wider. Well, they see that businesses are closing on.
They realised a little have a knock on effect. So the while she is important as a leader to keep the troops motivated,
it’s also important to be very honest about what you know, and also what you don’t know. Yeah,
just one thing. I forgot to say the start, folks, and obviously those of you who are here live on the Web in our witness.
If you want to go down to the chat box or into the Q and A box and putting your questions,
YouTube. If you put your comments into the box below, put your questions into the common box. The team here will transfer them through to us,
and there’s just a couple of quick questions in their car. And can you explain what what followed Means?
And Michael? There’s the Irish subsidy scheme. And then there’s the UK subsidy scheme on one of the one of the key components of the UK subsidy scheme.
Is this furlough, which is like a short term layoff? Absolutely so. So. Furlough is a American place for lonely came into usage in Vuk three weeks ago.
Way all have to work out how how it was spelled, how it was pronounced. It was a completely new concept to us,
but it is exactly as they’re says. It’s a short term lay off where the government subsidised eighty percent of employees wage up to two thousand five hundred pounds.
The obligation of employment sticks with the employer, not the government. So it’s effectively a subsidy, not a dialect benefit to be employee.
And so what answer you seeing out of the ground, Carol outside of your own firm? In terms of things that are happening that either you’re looking at them going up,
that’s a good idea. Or actually, that doesn’t look like such a good idea. Okay, so I get a bit of insight of involved in a couple of industry groups.
Welcome. Discuss were fellow firm owners. I’m also I also served as head of accounting for practise ignition.
So food I’ll get to see some macro trends on get to see what’s going on across be accounting landscape not just in the UK,
but globally. So I guess the first coming is I’ve noticed but firms But her deducted monthly payment models are securing their cash flow and revenue a whole lot better than firms who on so firms who are expecting cash collections,
votes, cash collections are drying up. We noticed a very dramatic drying up of cash collections for week after lock down.
We’ve n noticed they’ve picked up again they’re not back to where they need to bay, but they’ve certainly picked up compared to where they were.
Returns of noting about thirty percent furlough seems to be accurate for firm owners. That’s what people are saying.
They’ve either done or will do. Twenty Tim production in partner drawings or dividends. A game seems to be quite common,
I’ve noticed, but some firms have already closed the doors over to new business or to their firm altogether on.
That’s been a very unfortunate knock on effect of child care, where husband and wife for work in one of the moments for practise,
the other one needs todo juggle the home schooling and so on. So So, yeah, there’s been some challenges,
but I I would say that accountant up until now have been busier than ever before. But going forwards that’s going to change.
What? There’s a question here that it feeds into this from Barry. How are you, Barry? And what’s your view?
Carol, On people taking a pay reduction whilst the workload increases? How does the firm owner motivate staff?
So the subsidy scheme in Ireland there’s a little bit different s Oh, it’s, you know, people at certain points end up taking homeless.
But what Irish accountants are experiencing now is due to a combination of existing work flows coming through the door,
the increased advisory requirement in the short term and combined with the working, slowing down production. It’s a great question.
How do you How do you motivate the team and what are you doing in that regard? Okay, so I need todo I need to pick up on a couple of bits.
I mean, first of all, the UK scheme is very different, So the pay reduction is only between myself and Ben,
my shareholders, and that was a fairly easy conversation. We both knew deep down we needed to do that with the team members.
If they’re furloughed, they get eighty ten pay. But they are not allowed to even open their email.
They’re not allowed to do a thing, so it’s very different. Why I can’t talk from experience with exactly that situation.
But what I can’t well, I can share is first of all week. We’ve actually found that remote working has included with activity,
which seems like madness, but I think bullets down to the reduced commuting times and so on. We found the team members are looking on at the time.
They would normally lead but work well in the time they would get in. We’ve also found, but we’ve been able to really build a a bit of team spirit around this.
Part of that is coming from client feedback. We found that our clients have been extremely supportive because we’ve been supportive to them on that.
Support has really resonated with the team members who wouldn’t necessarily Herve immediately dived in to advisory work so I can let first exposure of a very real thank you from the client on bond is actually the higher stop.
It’s motivating number of the pay packet right now. Where does that leave us in twelve months time? You know,
that’s possible big question, because maintaining a wartime team spirit is going to be very difficult. So I guess if this is all over on,
the lock down is relaxed within four weeks, which is best case scenario will be okay. But if we carry on for,
let’s say, six months, it could be very different. Yeah, I don’t think I don’t think anybody is.
I know I’m all for forward thinking in scenarios, and I haven’t got to six months in my scenarios.
Yes, I’ve I’ve got I’ve got two, three months, a question that that that keeps being asked.
Carol. So team costs are not going to drop. Okay? Operating costs are not going to drop for accountants.
They’re not. But yet our businesses and business owners are going to be smaller on maybe under cash flow pressure.
So inevitably, there’s going to be this focus on fees and downward feed pressure. Absolutely. So So So So So So what’s What’s your thoughts on that?
Yes. So our worst case scenario planning is for twenty five percent cut in turnover, despite the fact that we have not lost a single client.
Get so that’s how worse case baseline projections but we’re doing on what’s happened is by doing that, we Yeah,
we’ve got an end profit figure, but we need to make on that in profit figure is made up of INBio Deputy Payment,
plus Thebes dividends for myself, for my co shareholder to maintain, maintain quality of life so I’m not taking out anything,
goes and above. So what forces us to do is to say that This is the profit we need to make because it pays the household bills and being bov payment.
Here’s for worst case. Turn over. How do we fix for bit in between your How do we fix be costs of the business to make this equation work on?
Surprisingly, we actually made it work, but we had to think of things I do. We need an office,
you know? Do we really need to be spending a six figure sum on physical offices when we’re just have productive remotely we thought about?
Do we need to look at our Southwest description? Do we need to go back to a guerrilla marketing campaign like we used to do love oven spending a hundred and fifty grand a year on marketing?
Yeah, we were thinking about all of the big items in our P N L. Do we need to spend vote on what it’s done is it’s It’s really helped to sharpen our views on what we need to be spending as a business.
Now the reality is, but we probably won’t have a twenty five cent cut in turnover. I believe that on average,
case scenario first, given our growth rate and what we what we typically take on organically is we’ll probably fat line.
So we’ve done growth as usual, flatlining as a reasonable case scenario on Ben, twenty five percent flatlining is,
I believe, the most likely if a fee outcomes. I don’t believe we’re going to continue growing this we have done in the past,
but we are planning for the worst case of twenty five cent tip. We’ve also planning for the worst case of working conditions and cash flow,
which means longer locked down on someone so that we can a drop of a hat get extra funding if we need it,
and so on. You know, we’re making sure that we planned for the worst, But where were acting on going out with intention for normal to best case?
Two quick questions. When you talk about twenty five percent revenue drop, are you splitting that twenty five percent into last clients reduced fees?
Or are you just taking that as one lone figure? There’s a combination of both which I will take that as one lone figure.
Okay, Yeah, so normally out she earned a za practise would be it’s been higher in recent years because we’ve noticed quite to become more transition but hovers around eight percent on.
We believe that there is a risk you’re not not necessary a massive risk for a risk of fracture and being increased.
But also they’re being potentially down with FIFA Chef Carol. I have to be careful what I say because we’ve,
however, many were heading for five hundred on the Web in there. I don’t know how many are watching online and live on.
I don’t know, many we’re going to watch the recordings on. I’ve become very conscious over the last two weeks that as different people are in different places on their own personal and business journey through this,
that sometimes talking about opportunity and showing too much optimism can Concrete’s a negative reaction. So I’m using the opportunity word cautiously,
but I do believe that Corona, one of the Corona virus gifts, is the opportunity to remodel our businesses because because far too often I think accountancy firms have grown way.
Hire that person they charge so many hours at this race on. But that’s how it’s built up. But this is an opportunity to rebuild the business from the foundations the C19 crisis is giving us so many opportunities.
You know, I don’t say it, you know, we live in deer or whatever, but I like business.
I enjoy business. This morning I was mapping out a couple of new business ideas. You know, I totally outside of accountancy.
But the first one was the Netflix for education and health. You know, take the job which model on bone out next Netflix subscription,
with country classes, baking classes on as we’ve all got used to have a simpler life of being a home.
But there’s a load of opportunity, and we’re naive to think they won’t be opportunity out of it for proving it to accounting firms.
I think they’re huge opportunities in review in what we do is a practise internally and what we do externally.
So internally, we’ve got a great opportunity todo transform our business from the legacy business. But it once watts and take a blank canvas approach so that could be implementing practise management systems that could be even so far was wholesale changes like scrapping the office and someone but externally as well.
They’re huge opportunities because most lots of us go down talking about advisory. Very few actually practise what they preach.
Advisory is for Stop that they do anyway, but they don’t necessarily call it advisory, but there’s no proactive advisory over and above the compliance functions that leads to it for many firms.
Now, what happened with groaner violence? We’ve all accidentally become advisers. We started speaking to our clients.
We started talking about future above historic. We’ve started paying cash flow forecast. We started helping them to apply for funding.
We’ve, you know, we’ve been doing lots of things to help them keep the lights on. We haven’t necessarily charged for those games,
but there’s a real key here. Dez, we’ve got past the barrier of client saying no, because for clients need it on,
we needed to keep our clients in business. Now the opportunity that that brings us is that we now have team members who can’t say I don’t know how to do this because they’ve done it.
They picked up the phone. I’ve spoken to a client. So accountant truly have had a catalyst now to get into becoming through business advisors.
Yeah, you see, And you know, I’ve always believed that accountants were the advisers of choice that accountants were the people in the position.
But the advisory conversation part of I think what’s happened over the years is accountants all believe they give advisory because that’s the chats.
That’s the value peace. But there’s two pieces around advisory. It’s about putting a structure on it. That structure is theirs to fold.
The structure is to keep the firm delivering the advisory on track and then having the structure to keep the client on track,
because when when it’s not a process, it’s just ad hoc. It doesn’t get the results. Once you put it in to a process,
you get exponentially better results, more tangible benefits on a service that you can actually package, and firm owners have got the great advantage of a slow down that’s coming up.
There will be a slow down in a couple of weeks. I don’t care what anybody says there will be a slow down.
There will be a point where the client phone calls about How do I claim my government glove or whatever will dry up because it’s very time down,
very intensive now, I mentioned. But we got time to focus on both internal and external stuff, the external stuff.
It’s the advisory. But we can build our internal systems to facilitate us doing this and commercialise it. Yeah,
on it. Part of part of, I think, what advisory is confidence. Like if you if you look at the firm’s who do advisory and truly do advisory?
A lot of it comes down to the confidence of one individual at a point in time. And I think every accountant could do it.
And this what you just said. Every accountant has demonstrated their advisory capabilities over the last two or three weeks.
So so now it’s just a question of maintaining the momentum on that confidence bond. Rolling it out absolutely by now,
I think that this brings us very nicely dead into a guess of you on. However, practise landscape is gonna change after this as well,
because I think that there will be some legacy old firms who still don’t allow their team members to have true engagement with their clients on bond.
It’s still very partner lead. I believe that they will be suffering through this because the partners would be working harder than ever.
But the team members will have less and less work to do. But there’ll be some boutique firms who have really stepped up on you.
I think we’re going to see on evolution of the type of firms. But succeeding on its fur stuck up,
we could see happening before It’s just we’ve now got an external catalyst to really drive through these changes. Yeah,
because because because people people often ask me like, Well, what does what does the firm look like?
And I described the firmas It’s an accountancy firm. They’ve they’ve structured how they delivered our products and services you talked about.
You know what? The biggest, most notable differences for me over the last three weeks. Carol is well,
I have zoom calls, and I have other groups of accountants, and everybody’s looking at me are dealing one to one you mentioned about DDS on.
People are collecting by direct debit rather than that, the historic old retrospective building model that they’ve got to build up a debtor’s those people who are on DVDs,
they’re experienced. This is fundamentally different. So technology enable firm’s ability to interact like Joe. Every account in the world has heard about that.
You know the cloud accounting model. It’s so it’s not actually necessarily going to be this fundamentally different firm.
Like I have personal beliefs around the subscription model. I have personal beliefs around embedded advisory. I have personal beliefs around levels of advisory in terms of the basic fundamentals,
but then more advanced advisory. But a lot of the these firms exist out there at the moment, so really the C19 crisis is a catalyst.
Firms will change, but I think it’s a catalyst that the middle market is going is going to need to move forward or be left behind.
Absolutely. So I think it’s very similar to making tax ditch tool here on how making tax digital had really ramped up the adoption of online accounting.
You know, online accounting wasn’t new. We’re doing it back in two thousand two. We was zero’s first partner outside in New Zealand in two thousand seven.
You know, we were I think it’s safe to stay ahead of the curve on that stuff. But the reality is,
but the mass adoption only took place when making tax to store became real. Not just an announcement, but actually it became a all Michael,
this is really happening. Okay, now, unfortunately, is a profession. We tend to need external catalysts to really drive change on believed that this is another one of those external catalysts,
but is going to drive change in how we do. Things can only be a positive thing. Dez.
Yeah, well, it’s it’s it’s changing everything. It’s it’s changing. And it’s not just changing. How we operate is changing.
How business happens is changing how people interact. It’s changing people’s values. It’s on. It’s not that is changing their values,
but it’s uncovering people’s values as firm owners, as accounting firm teens, business owners. And I think something that you said in there,
Carol, that the change process accountants don’t need to be told the changes, not their forte, but but But I just see now was really a time to lean in and trying to lean in on,
decide a little bit like you can start with your blank sheet. Well, here’s the Here’s the prophet that we need and want.
Here’s where we believe our turnover is what goes in the middle. Well, now is the time to take a look at our entire business and our entire firms and say Okay,
what’s in here that’s absolutely working. Here’s the bottom line results we want and here’s what we want to be and what we want to deliver on.
This gives us the freedom to make decisions, to cut out the bits that aren’t working and move to the model that we know does work.
Definitely. And I think we need to be conscious and this might seem a bit blue sky or whether faces now,
this might seem a bit out there, but we need to think about what the longer term impact of this fire this is on society as well,
because I think it will impact the way we do things and the way that we as humans act as well.
So if we look at, for example, the customer, the average customer desire over time, and it’s been a very gradual shift,
we’ve gone for wanting more stuff to actually want in time health. We’ve wanted luxury and service on. We’ve wanted novelty,
but we can share on Instagram. That’s kind of where we are now. People value experience over material items on.
There’s been a gradual shift over time, and I think that what we’re going to sit this bio, this is it’s going to really bring home the value of time,
the value of health. You know, some of the simpler things in life. There’s an argument to save.
It’s the way we should have all been living. But I think that yeah, the guard bliss of how well put together you feel you are how well your mindset is adapted to this stuff.
We’ve all been anxious about this. We’ve all had fear. We’ve all looked at this bios and for all No.
Am I gonna catch it in my family going to catch it? We’ve all So we’ve all been through panic and fear.
We’ve all been through a state of acceptance and I believe we’ve all been proved to whatever extent a state of growth as well.
But as a community and to society as a whole, we have all gonna change afterwards as well, and I think it’s really important to remember that.
But what our clients one, when we come out of this might be very different to our clients wanted when they came into it,
they might value different drivers. We don’t know what those drivers all leave is going to pay you see you see.
But this is looping back to your earlier point around advisory, right? So we can’t say for definite what business owners are going to want to the end of this.
There’s a couple of things we can say for definite. And some of these, we could say for definite is businesses that are online have fared much better through this than businesses that are not online.
So every business owner the future is going to want our should focus on developing some form of online capabilities.
Now, with developing online capabilities there become structures and processes on. I think accountants general need need to be conscious of that.
Now. The fundamental thing here is the fear. So the fear. There’s an awful lot of business owners around the world now who are wishing they had done things a little bit differently there,
wishing they had listened to their accountants. They’re SEPA, whoever it is on. You know, the the accounts on the statutory work that needs to be done.
It’s still going to need to be done, but I think this has opened every business owner in the world now,
whether they make if true, this or not, there’s going to be businesses, and there’s going to be there’s going to be growth when this is over.
And so there may be new businesses. Absolutely, Because things comes back to the coughing that I mentioned death.
We went into this with sound economic fundamentals. We haven’t got into this in a state of possession. It’s of the session caused by a black swan event.
No, no, a recession, but was bound to happen, something t over. So from that perspective,
it’s reasonable to presume that there will be casualties. But those casualties in business will be replaced over time.
Verbally from the latest economic report alive late last night is that GDP will return to normality. When I say normality,
I mean not back to where it where it wasthe the day before lock down. But I mean normality ist where it would have been had been ordinary levels of growth by the end of twenty twenty one.
Now, that’s not a long period of time. Okay, a match we take into account the huge government subsidies and so on.
There’s been a huge tip, but then an even bigger rise to bring back to normality. So from that perspective,
death we need to remember for actually visit temporary onboard, be actions. But we take now in terms of climbing our business internally and solidifying our client relationships will tears up going forward.
What? One of the other things. And I know this is diving back in to a practical point of what we’ve done.
One of things. We’ve been very clear on doing that. Dante is focusing on client attention on DK Lime advocacy more than anything else,
because I think invest scenario, there’s a number of different levels for firm owners can focus on. They can focus on some really easy,
short term opportunistic stuff. So perhaps the easiest, most short term, most opportunistic thing, but you could do is a firm owner is to charge more for the existing stuff that you do.
The second level is to charge more for new stuff. We’ve actually decided our buyers. We will be free of charge.
Over this time on, we won’t a email with some heartfelt semper fi twelve clients. Just a look.
This is what we’re doing. We put putting aside all of our billable work. We’re focusing on this emergency.
Yeah, we are your emergency services during this time and we don’t want you to feel as a clock tick in.
We would hate you to be suffering his silence of Please phone us. So we way set the landscape for we’ve had more positive feedback from our client of the last three weeks.
But we’ve had for years we’ve had Mawr team advocacy based on that feedback from we’ve had for years, I would wager if we did on NPS and Net promoter score on our clients about staff will be higher than ever,
and the beauty of that is, but we’re building waving fans who are business so both waving fans. But it might not put more pounds in our pocket now,
but just wait. Just give it. You know, a year or two, they’ll be recommending their friends,
their family. The team members will be recommending their flint to come and work for us because such a rewarding place to work and all of our stuff on dit will help us set ourselves apart where the opportunity is about the growth S o.
I think that’s another fine balance, but also an opportunity for firms to think about the first thing that comes into my head When you describe that Carol,
I call it the Accountants Growth Loop and the accountants Growth group. You start at the top and you have a client and if you get that kind of result well,
when you get that kind of result now that client has a storey. Now when that client has a storey and your team are the same when they have a storey,
if you can frame that storey for them on asked them to share that storey. So rather than just letting the being ad hoc ward amount referrals that we actually frame the storey get the claim to understand the winds they have had they asked them to consciously share the storey.
But even if not juvenile opportunity to share Storey the the second thing, the second thing that I’m seeing there Carol is like it’s you’re almost describing what I would call a Freemium model.
Okay, so so right When the clients have their greatest need, you’re reaching out to them and saying,
Look, we’re here to help and you’re introducing them to the concept of advisory. So when the time comes,
we’ll then it makes it easier for you to lead them they’ve experienced. It makes it easier for you to lead them as an appropriate time into into a model.
And one of the concerns that I do have is I do have concerns about accountants who unconsciously doing it that way because the danger,
then, is if this becomes the norm, Are we giving away free service? So I think it’s very,
very important that that firms who if they follow in your footsteps that they structure and they think about the long game like Freemium is a way of attracting new customers.
And but like like like the whole thing is on. I love what you’re saying. Do we focus on Where’s the opportunity?
Where’s the quick winds? Will? Actually, where is the best platform to grow your business? The best back from grow your business?
Is your existing customers on your team completely completely? Because that were very conscious that there’s going to be a couple of challenges this year?
First of all, new business is going to be harder to come by now. The reality is, but business formation certainly in the UK,
have dropped, but not massively. There’s you know, there’s still a tremendous number of businesses being formed every day on both businesses have been formed with new directors were not just Felix companies,
so that’s a positive. But yeah, we specialising Franchising franchise recruitment, take her here. So anything we could do to make future recruitment over the next year easier is a plus for us on DWI found that our franchisees,
but we working we have have reported back to their franchise all about how we’ve helped them so much so that increases the efficacy of monks down with furthers as well,
Which is critical, S. O. C. That’s important. But then the other side of it is we’re gonna need to ramp up our staff pretty quickly at the end of us because the seasonality is going to be magnified.
I think I mentioned ever start, but where we’re going to see the normal seasonality times three, because we’ve got enforced downtime now that means we’re likely tack to recruit staff at the end of the year.
First, Agassi choices around outsourcing versus recruitment bows, his temps and so on. But whatever way we d’oh,
I’m sure recruitment agencies be rubbing their hands with glee because actually, it’s going to become a candidate’s market because we’re not the only ones facing the seasonality.
Every other firm is onboard. Anything we could do to put ourselves at an advantage from the recruiting expected to get the best talent is vital.
We can only slave receipts for that Now on. It will pay itself down the line. But in the rather than spending that,
say, an extra five grand on a member of staff to secure the best staff. Instead, we can secure the best staff through a little wish to work a day and onder the situation in Ireland.
Carol is a little bit different because recruiting into accountancy firms in Ireland has been impossible and it’s been virtually impossible.
So I think the market will open up a little bit. But But again, I think there’s a huge advantage for those firms who have embraced remote working and are going are going down that route.
I just haven’t gone back to your point and go back to your point about about firms and client acquisition and reduced clients.
Okay, so if we work on the assumption there’s going to be reduced businesses at the end of this.
But if you look back through all the recession’s accountants don’t go bust in general accounts, don’t go bust.
Okay, so let’s assume there’s gonna be the same number of accountants, possibly a little bit Mawr, because some of the furloughed people in late of people are going to start up.
So the same number of accountants, less businesses. So So I see an opportunity here, Carrie. Right?
So here’s leading edge here is leading edge now. Now Bleeding edge is just out a little bit further.
But here’s the leading edge firms, and then every firm needs to look at where they are on the spectrum all the way back to the people that are still working like the eighties in the nineties on,
I think, part of the approach to positioning and winning new business. To add on top of what you’re saying,
Well, let’s focus on our existing clients on really, really, really, really delivered for them. Let’s focus on our team,
make this a really good place to work on a town a staff. But there’s also an opportunity carried by moving yourself up the spectrum towards the leading edge s o.
This again goes back to your point on advisory technology, pricing, methodologies, collection methodologies and serves. The firm’s will go up here.
The firm’s closer to the forefront, are going to be more attractive. And I think there’s going to be Some firms are going to see massive clean glasses at the end of this.
Yeah, I just want todo caveat. What you’ve said, I think that this is very different. Previous recessions.
I don’t put too much of a dampener on things, but certainly for May. You know always. I was working as a employee in two thousand and one when we had September eleven from the dot com bust.
Do you know what firms in the U. K. Didn’t really feel that? To be honest, it kind of happened,
but it is very theoretical. Same goes for two thousand seven. Two thousand eight. It was a theoretical recession,
but we noticed or no numbers in two thousand ten, but it was very delayed. It were. It didn’t really impact us.
Affirm. I’m actually gonna content the accounting firms will go bust. I think that there will be casualties ofhis on guy think that that’s unfortunately a trap that some are falling into that.
They believe that they’re immune from it. I think that this is probably more, much more work if we need to change our mind set pieces in a recession.
This is a war and it just so happens that there’s a recession following on from it. And on that basis I think that what I’m saying is,
but there will be Cem sole practitioners who decide for business too much for them. You know, they particularly if they ever light on the physical work that they do for their income,
they will find that they just simply can’t make ends me on because this is the first time. Certainly in the UK,
I have known of businesses just shutting their doors on. So So, yeah, I’m not confident about the about the fact that will come out with the same if not more,
firms. I think that we will take a hit in the number of firms out, something that will be a deep.
But then I do think there will be growth in the number of firms over, Let’s say three to five years.
Okay, Yeah, it’s interesting what you say. The Irish experience of the two thousand seven two thousand eight recession and was very different for the UK It was it was much more deeper,
much more impactful. Yes, I remember dumpling House prices were sky high at the time, Weren’t May.
Yeah, there was a total a total a total property, a total property price collapse. And there’s just a couple of questions here,
Carrie, before we go into the final stage. And okay, so there’s a question here. While there’s general acceptance that fees will shrink in the short term and has said and expected twenty five percent and firm owners won’t necessarily want to volunteer and discount reduced fee to their clients.
And presently most of us are working free in charge in order to build goodwill. Should we look at building over a two three year period in order to maintain fees with some kind of growth built in?
And I think you’ve kind of answered the feed question a little bit by flipping the business model on. It’s not that we’re saying there’s not going to be discounting fees,
but there needs to be a reassessment on a client by claim basis. Absolutely. So I think now is the time on unashamedly blowing the perhaps ignition trumpets for time to get firm agreement with your client on what the fees are going forwards on.
There’s two ways of doing this. You’re varies for discounting of fees. But there is another approach, which is to offer more for the same amount of money.
So you know, very is there’s quite a value proposition of saying, Look, we really appreciate your business.
Whoever business tomb. We can’t absorb any discounting of our fees. However, what we would like to do is to extend an offer of a free of charge,
short term cash flow projection or something that helps them stay in business. That could be a A very real win win S.
O B. Two options. You can discount your fees. I’m always hesitant about out discounting because it implies that there was that legal boom in your fee anyway.
Or you can offer more services as a value add. So yeah, in terms of whether twenty five think comes from unseen,
back primarily is churned rather than discounting. Okay, okay. And there’s a couple of questions in here in relation to audit and signing of audit reports and we’re not going to go into.
We’re not going to go in to audits today. Pork and we did a financial reporting. Webinars should be in the resource centre there for you to see which dealt with the signing of a financial statements and other reports.
And we do have a dedicated one hour technical webinar and coming up later in the week, which will deal with that.
There’s even superbly for my face, but I don’t have to answer no dick question. And so so so So Carol,
your final two. Three points of wisdom. What if you’re talking to the accountancy firm owners that are on with us live now or watching the recording?
What are your two three pieces of critical advice for them right now? Okay, so my very first piece of advice is to keep a calm head to keep a level head.
Your clients are expecting you to be the trusted advisor. Now, to be a trusted advisor, you need to approach things pragmatically,
prudently but without fear, without without exaggeration on DS, with our media hype. So you need to keep a calm,
collected approach with all of your clients and to be realistic. Which men feeds me into my second advice,
which I’ve covered in more detail earlier, which is to plan for the worst but make but also have a focus on average and best case scenario.
My belief is that a firm owners were growing before continue their activity, but he should flat by, and that should be a realistic scenario over could be aimed for.
But you absolutely need to plan for the worst. What what could happen should look down, be increased,
which in turn might mean that your clients to site not to be opened the doors. What were you doing that scenario?
Carol, I’m going to I’m going to flip my next question Now. I’m going to put your other hat on and not necessarily is a firm owner and not necessarily is an adviser to accountants,
but what as a significant business influence or in the UK, a lot of people look to you and and and count on what you say and trust what you say.
What about from a business owners perspective? What are what are the three things you’re saying? The business owners are Are they the same things pretty much the same thing.
So certainly keeping become head is vital on do the planning side of things as well. You know, there are a lot of things,
but we should do day to day business anyway. It’s just that the C19 crisis has perhaps magnified the need for these good practise.
But there’s a third thing for small business owners. Which again, could it could naturally apply to accountants,
which is that they need to really take this time. There’s a lot of them bare amount of have gotten enforced holiday,
you know, accountants still working, but lot business owners actually are doing what they do day to day anymore.
Used this time to think about how your business looks in ten, twenty, thirty years time, you know,
will people still need your gardening services? Will people still need whatever it is you do? Can you look to evolve with the times?
What can you do differently? Todo stay ahead of political economical societal technological changes. How can you really in place the future?
Because I think that one thing is gonna come out of this. Is that the increasing pace of evolution?
But we’ve had in the world, you know, if we look and changes up to. Let’s save the nineteen eighties were fairly slow.
Eighties to nineties went up nineties two thousand after people mawr bang, we’re in a really rapid pace of change Now.
I believe that what’s going on now is only going to increase the pace of change. So for any business owner,
accountants included, how are you going to embrace that pace of change on how you’re going to look for where the second bounce of the ball is?
Yeah, because I suppose the we talked about changing, we talked about change in the context of accountants and external change.
Being a key driver, what the business world and how it operates has been accelerating in change for for a long time.
But like everything, this is just accelerating, it’s putting it to warp speed completely. Let me give you a case study dead.
I don’t want todo ramble on for too long. I’m conscious of every attendees time, but my local butcher previously are paying cash and he’d give me may Okay,
doing the lock down. We’ve got to a position now where he’s concerned card payments over the phone and he’s got a delivery service,
so he’s had to make some very immediate changes to his business. Now really, he’s going to make future changes as well.
You know there’s going to be stuffing who need to do to embrace for future. So it might be that people don’t want to walk around all the shops.
But there might be a collective of local independence who offer a drive thru collection service where they come to get by bio website.
You order from your butcher’s you’re bakers your farm shut your you want of a bitch. You walked from independent shuts up supermarket.
You drive through a collector. That might be the next determination, but this is the ideal time for those businesses.
Now they would be going through a severe Piver to think that actually that pivot was forced. But what further pivots can we do that will actually help our business?
Because the fear of train and should be overcome now as well? There’s a There’s a book Carol that I recommend everybody watching should read on.
Do you know this book is essentially a copy of it? It’s the book called Simplify on It’s About.
It’s about making us as business is easier to use, making us more valuable. And on Ben the experience.
Peace on guy. Just think that there’s a global change in business happening on the accountancy profession needs to need.
Tiu needs to keep up and get ahead. Absolutely. Where businesses after all. Carol, I just want to thank you very much for your time today,
and we have a couple of questions in here. We are running the free audit Webinar, specifically dealing with covert nineteen issues here at fourteen hundred tomorrow.
And so you will be able to get access to that free webinar if you’re on our list or put a comment in under today.
Carol, thank you so much for your time. Everybody who’s on with us. Thank you for your time today.
Thank you for your attention. Thank you for your interaction. And we’re here to do anything that we can during this time to get you on the best possible route on road out of this.
So stay safe. Probably see you again. Let’s get it done.