The COVID-19 crisis has fundamentally and permanently impacted the professional and personal lives of accountants. The economic consequences, especially for many of the SME clients of small and medium-sized accountancy practices (SMPs), are severe. The IMF’s World Economic Outlook continues to darken. In 2020 the world’s and Europe’s economies are forecast to contract more than at any time since the Great Depression of the 1930s. In such unprecedented times, businesses will need to rely on qualified, specialised and competent advice such as that provided by professional accountants. Hence, we set out below what EFAA and its member organisations believe to be the implications for the accountancy profession, the specific and important role of SMPs in supporting SMEs, and the future of the SMPs and the PAOs supporting them.
The accountancy profession is facing unprecedented challenges. These challenges are acute for SMPs. They need to make significant and timely changes to the way they operate if they are to successfully adjust to the realities of the crisis and to continue their transformation that was underway before the current crisis. But that is not all. The role of accountants in providing advice and support to SMEs is now more important than ever. By virtue of their familiarity and experience of working with multiple SME clients SMPs are especially well placed to provide the cost-effective high-quality services addressing their needs. Consequently, many, if not most, SMPs need to rethink their practice model in order to adapt to this ‘new normal’. Professional accountancy organisations (PAOs) will need to continue supporting to SMPs in making the necessary changes.
SMPs will need to develop new services and skills in order to continue support their SME clients with the same level of high quality. At present SMPs need to guide SMEs on how to stay afloat. Specifically, this means advising them on various matters including gaining timely access to government support schemes, managing their cash flow, reworking forecasts and budgets and transitioning to remote working. As we exit the crisis SMPs will need to advise SMEs on making a green and digital transition as envisaged by the European Industrial Strategy. The ‘new normal’ for SMPs serving SME clients is characterized by the following: continuous and close client communication; tailor-made advice spanning a range of issues including green and digital transition; and digital transformation of practice model, processes and service offerings.
The strategy of professional accountancy organisations (PAOs) should be to provide up to date, concise and relevant information, insights and training on economic changes, at country and EU level, measures being taken to help SMEs stay afloat, and how to access opportunities for finding and applying for financial support. To this end, PAOs will need to provide leadership to their members and support change with training, information, and guidance.
Member services for SMPs may need to be modified for example as follows: identify and provide new services for members to help inform and shape their support to SME clients; modify means and speed of communicating and engaging with members and learning how next to help them; and implement online provision of training and CPD. As SMP members are experiencing financial pressure, PAOs might need to consider offering new services and solutions to help them address future crises.
Regulatory dialogue needs to be maintained. PAOs need to understand their government’s response and effectively communicate it to their SMP members, offer their technical expertise and resources, ensure the government’s response is a sustainable and effective solution that addresses the needs of SMPs and their SME clients.