Since the onset of COVID-19, accounting firms have remained on the “financial front-line” but like their clients, they are taking significant steps to change the way they operate.
This is the focus of the newly launched CommBank Accounting Market Pulse Report, and we spoke to Daniela Pasini, CommBank’s National Director Professional Services, to see what we can learn from the way accounting firms are evolving in the COVID-19 era.
How well prepared were firms for the new business landscape?
“What we found was that many accounting firms were well placed to manage the disruption that accompanied COVID-19. According to our Accounting Market Pulse report, firms appeared to be in reasonable financial shape before the pandemic took hold, expecting moderate profit growth in 2020. And years of investment in technology meant their people could easily work from home and deliver much needed support to clients without any major issues.”
“In fact, accounting firms were amongst the first adopters to direct staff to work remotely and ensure their people were safe. However, the pandemic also highlighted some strategic gaps. There was a notable absence of preparedness in business continuity plans for a major disruptive event like COVID-19, particularly among some mid and smaller sized firms. Ensuring that these plans are in place is a learning that I am sure applies to many industries and businesses.”
What have been accounting firm’s areas of focus during the pandemic?
“After making sure their people were safely working from home, accounting firms took on the role of helping clients navigate the influx of emergency support packages the Government released.”
“One of the primary areas of focus was stepping up proactive communication with their clients and firms were also busy posting materials on their websites to help people understand how to get access to support.”
“Another encouraging area of focus is that firms were already looking closely at how to deliver flexible work arrangements. In fact, the vast majority already offered it prior to COVID-19 and it’s a top priority going forward. Firms are also paying close attention to the mental health of their people with the majority introducing wellbeing initiatives following the outbreak.”
“And people were always front and centre in terms of the response. Many of the steps that firms took in the beginning stages of the pandemic were designed to preserve as many jobs as possible at that stage. The majority of firms limited or deferred equity partner draws, cancelled salary increases and bonuses, and asked staff to take up annual leave, however, unfortunately this couldn’t protect every job as we have recently seen.”
Have firms’ strategies changed due to COVID-19?
“Like many other businesses, accounting firms appear to be speeding up all things digital. The top three areas that firms are looking to change as a direct result of their COVID-19-experience all focus on digital transformation:
- increasing digital service delivery,
- keeping staff working flexibly
- and investing more in technology and cybersecurity.”
“In terms of services, firms expect that clients will be looking to them for business advisory services and recovery and insolvency advice, followed by tax consulting work. These are all areas that will be crucial for businesses seeking to navigate ongoing uncertainty.”
What is the outlook for business conditions among firms?
“It was encouraging to see that accounting firms have a positive view of business conditions over the medium term, albeit that they expect the improvement to be gradual. It wasn’t surprising to see confidence had dropped sharply as the COVID-19 situation developed, however, firms expect a strong recovery in two years’ time.”
“The research also showed that those firms that were better prepared going into the first phase of lockdown expect things to vastly improve by this time next year.”