How to future-proof your accountancy practice
Nobody likes doing it but from time to time you have to look critically at your own business and identify its most likely points of failure – as well as opportunities to make it stronger.
Are there people you need to retain? Are there tools or processes you can’t afford to have fall over? Are you taking on the right clients, paying the right fees? Are you serving growing sectors, or stagnant ones?
As it happens, accountancy tends to be less fragile than some other sectors.
Even in times of economic difficulty, people still need to deliver end-of-year accounts and tax returns. Some need additional help with managing cashflow or, if worst comes to worst, insolvency and liquidation.
And the smartest operators double-down on, and accelerate, plans to grow. So, there should be plenty of work around.
Some firms are more vulnerable than others, though.
Accountancy practices which haven’t kept up with the times, with a dwindling number of perhaps older clients, can struggle in a competitive environment. For example, cloud accounting isn’t a nice-to-have bonus feature these days – it’s a given.
Those reliant on a smaller number of high-paying clients can also find themselves in trouble if one of those businesses goes bust or reduces its spending.
And when it comes to sectors, a lot of firms specialising in hospitality and leisure probably spent much of 2020 wondering if they’d made the right choice.
Before you can identify ways to make your practice more resilient, you need to wargame worst-case scenarios. This isn’t necessarily a fun experience but anticipating disaster, and thinking through how you’ll deal with it if or when it comes to pass, can also be quite reassuring.
For example, there are reports of a recruitment boom getting under way as firms which froze hiring last year attempt to start filling key posts now. Do you have members of staff you can’t afford to lose?
As well as taking steps now to retain them (increasing salaries, promotion, taking the temperature around job satisfaction) you could also consider succession plans – is there someone ripe for promotion into that post?
An old-fashioned risk register can still be a powerful tool. You need to:
- note of every possible risk or threat to the stability of your business;
- prioritise those which (a) are most likely to happen and (b) would cause most damage; and
- come up with countermeasures and contingency plans.
You should aim to review that risk register at least once a quarter – and take it seriously. Give it dedicated time. Don’t just skim over it in a management meeting.
Reasons to be cheerful
It’s not all doom and gloom – this is also a chance to think about opportunities and how your firm can seize them.
For example, eCommerce was already a growing sector before COVID-19, but the crisis accelerated digital transformation across the board. Businesses with no intention of trading online set up online stores in a matter of weeks, while others found ways to deliver their services over Zoom.
Does your practice have the knowledge and experience to serve this sector? And, equally importantly, if you want to work with digital firms, you need to show your own willingness to embrace technology and the efficiency it brings.
Processes, not people
Going back to talent retention, ask yourself this: why does so much importance rest on the shoulders of one or two key individuals?
If they’re the only people who know how certain things work, or maintain a jealous hold on information about clients, you may have a problem.
Healthy organisations habitually document processes and record collective knowledge, perhaps in a customer relationship management (CRM) system or using secure file storage.
A key feature of AIRPA is that it provides instant access to all your data, across every system, with a single sign-on and from a single dashboard. That includes written documents, spreadsheets, records in Xero, and anywhere else.
In that context, while it may still cause short-term turbulence if somebody leaves the team, you can at least feel confident that your practice has the knowledge it needs to minimise the disruption to clients.
AIRPA can help your firm run more efficiently and adapt to whichever challenges come along. Get in touch to find out more.