By MIA Small and Medium Practices Department
The impact of COVID-19 is still unfolding. Firms should continue to take rapid action to protect themselves, their employees and their clients, and to consider how to future-proof their practice for a ‘post crisis’ world.
To help firms navigate the crisis, IFAC recently launched the Practice Transformation Action Plan – A Road Map to the Future. Transformation involves strong leadership, embracing technology, recruiting and retaining the next generation of accountants, approaching training and continued learning and development in new ways and identifying and meeting the needs of an evolving marketplace. Below are the recommended steps for practice transformation:
1. Embrace Change
Clients’ expectation, demands and needs are changing. A key competency in the future will be the ability to see and anticipate trends on the horizon and advise clients on the implications of those trends. The advantage of a small practice is a close client relationship. Hence, a small firm is well-positioned to identify needs and customise services to meet demand and circumstances.
2. Leverage Technology
There are five key initiatives to successfully adopt and embed technology:
- Conduct an Environmental Scan – Firms should take the time to conduct an environmental scan of the technology they have and the technology they want, including engaging with clients to understand how the firm’s processes can be more efficient.
The starting point for the digital transformation journey is to establish the current level of digital maturity. In September 2019, the European Federation of Accountants and Auditors for SMEs (EFAA) launched a new tool, the Digital Competency Maturity Model (DCMM) to help SMPs rate and improve their digital competency. For more information about this DCMM, please refer to an article from EFAA.
- Align with the Long – Term Strategy & Formulate a Realistic Implementation Plan – The return on investment (ROI) should be calculated, but the risk of not investing (RONI) in new technology should also be considered. Sharing experiences with other similar firms can be mutually beneficial. There are various options to manage the investment, including exploring a subscription-based or monthly-renewal model to manage the costs and considering passing the cost on to clients.
- Adopt the Cloud – Firms with multiple offices can use the cloud to provide staff with an easy way to work virtually on the same client simultaneously in different offices. For cost-conscious firms, the cloud eliminates some extra costs. For example, the cost to do updates and back-ups will be unnecessary if online services are updated and backed-up automatically. While cloud is more secure than in-house servers, data management is key. The firm needs to know the providers and where they are storing the data to track how it is being secured.
- Identify and Support an Internal Technology Champion – The firm should identify and position a passionate team member as technology champion to take the lead in implementing a new technology initiative.
- Involve Clients in Technology Decisions – Involving clients in new technology upgrades through virtual meetings and client portals will build confidence and trust throughout the journey. This approach creates transparency and highlights a long-term vision for all involved.
3. Focus on Talent Management
Staff are the most valuable asset of any firm and hence, investment in talent management should be a top priority.
- Offer on-going learning and continuous development (lifelong learning)
- Empower staff to innovate
- Engage in transparent career progression conversations
- Introduce flex-time
- Use a variety of recruitment techniques
4. Evolve the Firm Operating Model and Build Advisory Services
- Move from transactional to strategic services
- Re-evaluate the services provided and marketing strategies
- Move into a niche market
- Use networks, associations and alliances to add value
- Conduct a regular strategic review
It is recognised that every firm will be different, and the actions taken by each firm will need to be tailored to its individual circumstances and objectives. The level of action to transform will depend on a range of factors, such as the lifecycle of the practice, partners’ motivation, the size and services provided, the firm’s location and the type and number of clients served.
IFAC has created a dedicated ‘practice transformation’ web page, featuring case studies and examples of how member organisations are supporting their firms to innovate and evolve, as well as additional tools and resources.
Supporting clients through crisis
Many businesses now face a prolonged period of changing circumstances, i.e. the “next normal” and continue looking for a new approach to resilience. Early on, the pandemic accelerated digitisation and transformed small businesses responding to drastic consumer behaviour shifts. The ability of small businesses to survive the current environment, and thrive in the future, will be greatly strengthened by support from their professional accountant. Small- and medium-sized practices (SMPs) have in-depth knowledge of their clients and can provide vital guidance for navigating these uncertain times.
To learn more, please refer to the following:
- Accountancy Europe article on COVID-19: 5 key steps for accountants to guide SMEs through the crisis at https://www.accountancyeurope.eu/publications/covid-19-5-key-steps-for-accountants-to-guide-smes-through-the-crisis/. The same article was republished in e-AT in April 2020 for the benefit of members and readers.
- IFAC’s Small Business Continuity Checklist – How to Survive and Thrive Post Covid-19’ is a diagnostic tool to navigate times of disruption, covering two key areas of Financial Management Tasks and Strategic Management Tasks. It is not intended to be an exhaustive checklist of requirements but rather a tool to help identify priority actions for immediate attention.
With government stimulus measures, easier access to finance and businesses needing the business advice from accountants to get through the crisis, the coming months may see an influx of work for many practitioners who are able to turn crisis into opportunity.
Do join our SMP Forum 2020 for ideas on how to reinvent your practice for the unpredictable new normal. Themed, “Future-proofing your practice in the new normal”, this forum is specially geared to equip our practitioner members to embrace the necessary work norms, transformative technologies and strategies that can help build a sustainable practice and ensure the profession’s continuity and future relevance.
For more information click here