COVID-19 & Accounting firms: Will only the agile survive?

The impact of COVID-19 is impacting everyone, including accountants. As discussed in the last post, the crisis has made video calling normal to the point that people are experiencing fatigue. It speaks one of the adjustments people have had to make due to the "new normal"

But what is the wider impact on the profession? How are firms handling the COVID-19 Crisis?

Accounting Today published a survey, "The accounting profession and the coronavirus: The crisis in number" that gives some data as to where the accounting firms are at.

Economic Impacts: Bad News and the Good News

Not surprisingly, nearly three-quarters of the firms surveyed, felt that the pandemic was going to reduce their revenues. In terms of magnitude, 37% of those surveyed are predicting a 10%+ loss in earnings. The good news, however, is that most had not let staff go. Only 7% had laid off staff, while 4% were planning to do so.

The other interesting find is that the most popular service to come about due to this crisis was CARES Act Consulting, with 73% offering this service. The next closest was business continuity consulting at 36%. 

There were also some interesting finds around the tech front. 

• Working Remote: Over 60% of firms had challenges with closing their offices, with nearly half of those having some challenges with the "online approach". The survey found that only 10% had no remote capabilities. See the graphic below for more details
• Closing offices: Closely related to the previous result, only 13% fully shut down their office. The survey did not reveal why this was the case.  But if you can't work remotely, what other choice do you have? 
• Communications: Although more than half used traditional means of communication, 33%were looking at new forms of communication. 

https://www.accountingtoday.com/list/the-accounting-profession-and-the-coronavirus-the-crisis-in-numbers

CPA firms provide COVID-19 services free of charge
Many small businesses have been drastically impacted by the coronavirus shutdown. As reported by the Wall Street Journal, "about 20% of them had enough cash saved to operate normally for only two months if their revenue were to dry up. Among less financially secure companies, only 10% could operate normally on savings alone for two months". The survey found that 1/3rd of CPA firms are stepping up to help by not charging for COVID-19 related services. 

Agility in time of uncertainty

Virtual firms, like Live.ca, seem to have been well prepared for this pandemic. With no offices to speak of, the firm was online from day one. The firm was featured on this CPA Canada promotional video:

Being agile in times of adversity is key to success. Understandably, tech can be daunting for small firms. However, it is also daunting for small businesses. Consequently, the tech-savvy CPA firms are able to offer consulting services like business continuity planning. But before getting there, firms need to ensure that they have the underlying capabilities to be agile. For example, if the firm has limited capability to service clients remotely it not only reduces the ability to service clients but also prevents the firm from being viewed as adaptive by current and prospective clients.

That being said, it's a matter of will. With nearly three-quarters of the firms already offering CARES Consulting, just shows how agile firms can be when the mindset is there.

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else