Although the pandemic is not yet over, businesses have had to quickly adapt to the disruption and, in particular, the new method of doing business.
Accounting businesses were also not exempt from this. While the pandemic’s magnitude and duration seem to be growing by the day, a few significant accounting companies have seen a shift in their roles from accounting to advising services, which businesses need right now.
Small accounting firms in London, on the other hand, have been severely harmed by the Corona outbreak’s sudden entrance. The epidemic will undoubtedly have a long-term impact on how accounting firms conduct business.
Here are a handful of the changes prompted by COVID-19, ranging from employment losses to accelerated digital transformation.
Investment in advanced technology
Anyone who isn’t already paperless is already losing the battle. All of this should have been done many years ago, including archiving and documentation. There is no one-size-fits-all approach because each company must decide how much to invest in new technologies.
Examine your customers to evaluate if these investments will genuinely result in cost savings.
Increase in cyber crimes
The increasing pace of digitalisation and tech adoption has generated concerns about how accountants and firms will recognise, analyse, and respond to challenges to compliance with core principles and independence that may arise due to technology development, use, and implementation.
Many people believe that the epidemic is causing enhancements in digital solutions. Accelerating digital transformation poses hazards even under the best of conditions. In a crisis, such dangers multiply by a factor of ten.
Cybercrime and fraud, for example, increased significantly as a result of the epidemic, as unusual and remote circumstances were exploited and new techniques to exploit a broader and deeper range of businesses and individuals were discovered.
Cybercrime reports have surged in various places of the world. Professional accountants and firms should assess if the situation warrants the engagement of specialists to aid in discovering, evaluating, and resolving emerging risks, such as cyber threats, during this time.
Delay in payments
While everyone is trying to stay afloat, accounting companies, particularly tiny ones that provide services to small businesses, are seeing payment delays or contract termination.
Even though the UK government announced numerous business aid initiatives in response to the ongoing pandemic, the effects have already penetrated the economy.
Shifting to remote work culture
As jurisdictions see some return to pre-pandemic norms, many entities will likely choose not to return to entirely in-person workplaces, and many professionals will elect to continue working remotely where possible.
While the country is still not freely accessible, as social separation appears to be the new normal, the work culture has shifted to a remote work culture that necessitates the use of technology such as the previously mentioned cloud-accounting, digitalisation, and others. As communication and outreach have become the only option to overcome the current crisis, this distinction divides the most successful organisations from the least successful ones.
Small accounting firms are in a difficult situation due to a lack of both trained resources and finance.
Formation of new digital relationships
With the shift to telecommuting, video conferencing began to take the place of face-to-face meetings and client phone conversations. We’ve always believed that important meetings should be held in person, but that doesn’t mean that the person with whom you’re communicating digitally is any less essential because they aren’t physically present.
If a company is used to developing a rapport based on trust, ethics, and code of conduct, digital interactions can be difficult. Taking an existing relationship online is easier than approaching a new client who has never heard of you. It is essential to establish trust and build a positive relationship with a new client or employee.
The digital-human relationship must be rethought.
The bright side is that people already have technology tools that allow them to connect with others readily. You don’t have to be at the office to get things done.
Focus on small businesses
Government support is like a breath of fresh air for firms, but it doesn’t always take into account their unique circumstances. Specific organisations may need to adjust their governance and management model (finance, amortisation periods, asset life, etc.) to compensate for the revenue loss.
However, each scenario is unique.
Advisory services connected to a company’s carbon footprint or tax preparation will see a decrease in demand (because of lost income). Insolvency and bankruptcy cases will, unfortunately, continue to climb for some time.
Small accounting businesses that have struggled to adjust to the increased requirement for cloud accounting software over traditional procedures are the most affected by the COVID-19. Due to a failure to adapt to the needs of tax digitisation, small businesses in the UK have shrunk in recent years. Furthermore, the Covid-19 has made it more difficult for them to adapt to new technology like cloud accounting.
Bottom Line
One of the most challenging tasks facing London based accountants during the pandemic recovery will be to continue to gain a more profound knowledge of the concerns that currently exist and the ethical implications of those issues. The rate of digital change and the usage of technologies like machine learning automation, for example, has been unprecedented. Accountants must stay on top of responsible automation in addition to the difficulties of cybersecurity and fraud.
Professional accountants have a responsibility to be knowledgeable about these improvements as trusted consultants. This entails acquiring and keeping the necessary knowledge and skills for the work. Auditors of financial statements will have to weigh a slew of unforeseen variables in the coming months. Demands from clients are expected to rise and fluctuate dramatically. Audit firms will be requested to help and advise their customers in various ways, both formally and informally.
Sophia is a full-time financial writer at experlu. she is a passionate blogger and love to share her knowledge on various subject. Content created by Experlu– are loved, shared & can be found all over the internet on high authority platforms.