Covid Update, Timeliness and Three New Normals

The ongoing roll out of Covid vaccines provides hope for all of us including accountants and business leaders everywhere. This truly awful pandemic has blighted us all and caused so much death and destruction may be now finally be at a tipping point.

Change and Challenge: A Feature of Everyday Life

In retrospect, the pressure for change in the world of accountancy had been building for years. Firm leaders and senior managers had been advocating remote working for some time, but firms did not always reach a final resolution. The onset of Covid (circa March 2019) overnight ended the debate that had raged for many a year. Many firms recognised that their firm had been organised around a world that had been disappearing for some time as they were bogged down in bureaucracy, too siloed, too slow and with complicated matrix structures.

In these past 11 months firms have been innovating like never before, addressing workflow, client service, staff management and fixing technology issues. At the same time firms were seeking to grow by scaling up their ability to learn, innovate and seek great ideas regardless of their origins.

New Norms

Everyone recognises that time is of the essence – with most agreeing there will be new normals established in a range of areas including these three:

1. Speed of Service Completion

We take too long to complete work. For decades firm lock up (debtors/receivables and WIP) has exceeded 25% of annual revenues. Where WIP is in excess of 5% of gross you have all the evidence required to conclude that the firm is not completing work on a timely basis. Disagree? Well compare the timeliness of technology companies – a major competitor for many firms. And be careful not to apportion the blame onto clients who do not provide information when it is expected. We must reinvent our processes to enable us to turn round work much quicker.

Key Exercise: Take 10 of your mid-size jobs and:

1. Look at how many hours these jobs were worked on, and then
2. Look at how long the job was in your control.

Compare that with the efficiency of the service department in a car dealership that spends 2-6 hours on a service (including all those extras) and yet they manage to complete the job by the end of the day.

2. Decision Making Accelerated

Covid has forced firm decision makers to turbo charge their decision making out of necessity. 

Leading firms have downsized the number of decision makers and critical voices involved in decision making. Who has a vote? Decisions such as, how to complete the technology projects that have been pending? How to better serve and support clients? Who to let go? Which team members need closer support or greater accountability. These and many others have been resolved much more quickly.

One managing partner said recently that while looking back to the early days of the pandemic – “we were taking a month’s worth of decisions – every day.”

Key Point: Strengthening and flexing the muscles to continue accelerated decision making is an absolute necessity as firms continue to learn how to embed what they have learnt going forward.

3. Being the Employer of Choice

Creating an attractive destination for top talent is essential. Developing a firm that has an impactful brand, culture, clear to understand vision, mission and values will assist in fostering an inclusive employee experience and provide the environment as to whether employees stay or thrive. This will, in turn, beneficially impact the firm’s bottom line.