Experts predict the long-term impact of COVID-19 on accounting

Entire organizations working from home, health and safety plans, increased office cleaning, mandated mask-use, and all client interaction happening remotely are just a few examples.

Many of these changes were—and are—temporary. But what are the long term impacts of COVID-19 on accounting firms? 

We asked experts from across the world what they think the long-term impact of COVID-19 will be on the accounting industry.

Here’s what they said.

Impact 1: ‘Micro innovations’ can be problematic if not reviewed

Things happened quickly in 2020, and accounting firms had no option but to respond just as quickly.

As a result, practices needed to innovate and ‘hack’ their normal ways of operating. It may have been a hastily-created working from home policy, or a system workaround to send clients documents digitally.

Whatever they were, they were created under pressure. And so they need to be reviewed to assess their long-term viability and suitability.

Ohran Gobrin from Fuller Landau LLP calls them ‘micro innovations’ and stresses the importance of refinement.

“These micro innovations are not enduring. They don't quite get to the DNA of a business. So we need to pause and ask, ‘How do we really start to reinvent beyond coronavirus so that we can properly benefit from those things?’”

So on one hand, these micro innovations may have been perfect at the time, but are probably no longer required. But on the other hand, firms may realize these hacks pose exciting opportunities for their business and just require some finessing to ensure they make sense and are a fit.

Either way, a review is needed.

Impact 2: Firms will revise their profitability structures to ensure a balance of advisory and compliance services

If a similar event to COVID-19 was to happen, is your business prepared?

To manage successfully, accounting firms need to make sure they don’t have all their eggs in one basket. Say, advisory services, for example. 

Because there will come a time when, just like COVID-19, firms will be forced to divert their resources to compliance matters. If your profitability structure isn’t prepared for that, your firm will take a hit.

And the effect is two-fold. Rachel Fisch from Wagepoint explains the impact to clients:

Neither compliance nor advisory is enough on their own for a client to meet the minimum requirement of being compliant as well as financially literate.

Most firms will have learned from 2020, and the future will see a more balanced service offering across accounting firms.

Impact 3: Remote teams—there is no going back

Many firms were able to transition quite quickly to a remote workforce. For some, it was more simple, and for others, it was overwhelming.

Either way, it’s here to stay—COVID-19 or not.

In a Karbon survey seeking to grasp the full impact of COVID-19, almost 1,000 accountants across 20 countries were asked about how they are adapting to working remotely.

One of the clearest outcomes was the benefits employees are experiencing working from home:

• 61% are happier working from home compared to the office

• Just 18% wish to move back to the office permanently when it is suitable to do so

• 59% would like the option to work from home or the office

• 67% expect that they will work from home more often in the future

Because the transition happened overnight for most, the changes required were likely rushed. So, again, it’s important to review the systems your firm has in place to ensure they are suitable for a primarily remote workforce for the foreseeable future.

Having the right tools in place (and configured correctly), will help both your firm and clients. By using systems like Karbon across a distributed team, accounting firms are able to:

• Consolidate internal communication channels.

• Communicate with clients and set automated tasks and follow up reminders.

• Remotely collaborate across various clients and jobs.

• Automate manual tasks to increase efficiency.

• Gain a high-level overview of staff workloads to successfully balance incoming jobs, forecast accurately and prevent bottlenecks before they became a serious problem.

Recommended reading: How to choose the best accounting workflow software

Impact 4: Firms will be tech-driven more than ever

The importance of effective tools and systems will no longer be overlooked. For some firms, the power of technology is one of the leading reasons they survived 2020.

Firms were forced to adopt new technologies and step outside of their comfort zones. And many realized the true power and opportunity a solid tech stack can provide their business.

Gary Bell from FLB Accountancy notes the long-term impact:

“COVID, in some ways, has made a 10-year leap in innovation and that's going to continue.”

Existing firms should take this opportunity to overhaul their technology as they look at becoming smarter and digital-first practices, for the benefit of their staff, clients and bottom line.

And emerging firms will look ahead to the cutting-edge tools available—owners will seek best in class for all segments, rather than setting their business up on legacy systems.

Just like they look for the leading smartphone on the market, they will look to the leading tech solutions to place their firms as digital leaders.

Plus, according to Jim Buffington from Intuit Accountants, it’s not just a firm’s internal workings that will benefit.

“Now it's about engaging more deeply with clients. I think what we're going to see is a lot more applications plugging in that are going to help make client experiences more productive.”

COVID-19 thrust accounting firms into the world of tech—and there’s no going back.

Is your firm prepared?

Is your firm positioned well to manage these expert-predicted long-term impacts of COVID-19?

You may benefit from revising your profitability structure or a review of the systems you adopted during the transition to remote work.

Either way, it’s important to take stock after 2020 to best-prepare your staff and clients moving forward.