COVID-19 is a crossroads for accountants. Here’s how they can thrive
Since the advent of the internet, the accounting profession has faced an identity crisis. As technology has eaten away at core functions of the profession like compliance and payroll, accountants have faced mounting pressure to distinguish themselves from the software tools they use and provide new value to clients.
Then COVID-19 hit. Suddenly, companies — especially small businesses — depended on their accountants to navigate complex legislation, secure critical financing and make high-stakes decisions about their employees. Businesses found themselves in urgent need of trusted advice about their most important asset: their people. Accountants stepped into that role.
It hasn’t been easy. Accountants are taking calls at all hours, working longer hours and shouldering their clients’ stress. Nearly 40 percent say they’ve lost sleep from work-related stress since the beginning of COVID-19.
At the same time, many recognize the need to expand their services beyond advising on their clients’ finances. To thrive after the crisis, accountants must lean into their roles as holistic business advisors who guide decisions about people. As an accountant myself, I work with my peers every day in my role at Gusto, and I'm seeing this shift happen in real-time. There are a few important ways accountants can evolve into it long-term.
Let employee needs guide business decisions
Accountants’ value has historically come from completing tasks like processing payroll and compliance. Tech companies saw the opportunity to automate these manual tasks, which has driven a wedge between accountants and their clients. To rectify this, accountants and their clients must shift from thinking of employees as a line item to a primary driver of revenue growth and smarter business practices.
When the pandemic hit, choices about payroll, benefits and hiring became make-or-break business decisions. The urgency of the situation led accountants into all-hours Zoom calls with their clients to discuss everything from cash flow to keeping their business afloat and ways to keep people employed. These conversations provided new visibility into the people and cultures that define their clients’ businesses.
The Paycheck Protection Program, unemployment benefits and other federal initiatives to support employees are set to expire in the next few months. Business owners will rely on accountants more than ever for advice on how to give employees peace of mind knowing they have a great place to work long-term so they can focus on growing the business.
This change is good for accountants’ businesses: it’s estimated that practices providing advisory services can generate 50 percent more in monthly client revenue. Accountants have demonstrated their value consulting on people decisions during the pandemic, and they have an opportunity to become long-term trusted advisors when the crisis passes.
Embrace technology to add value, not just automate work
While some automation has threatened accountants’ core job functions, the right technology partnerships can empower them to expand their advisory role. Many tech companies have historically exploited their partnerships by using accountants’ client relationships as a sales channel, but there are enough options available that accountants can demand better.
To guide these relationships, accountants should follow a new golden rule: work with vendors that provide value beyond tech, not those that take it. This requires identifying exactly what role tech should play in your partnership. For example, a tool that automates payroll can save an accountant’s time, improve accuracy, and scale as a business grows. But automation that doesn’t take into account the context of a business’ specific situation is harmful. It can’t adjust business models when a global pandemic hits or build diverse teams.
Accountants must also lean into the parts of their jobs that technology can’t do — like helping clients manage employees’ financial, emotional and physical well-being. Automation can’t adjust business models in real time when a pandemic hits or build balanced and inclusive teams. But it can free up people to solve these problems, which are the most complex and critical for a business to get right.
When I was in public practice, one of my clients spent $450,000 in a given year on recruiting fees, but every new hire left within a few months. A tech platform could recognize that the money was wasted, but it couldn’t tell the company that the problem was its culture, not its hiring process. Only a person could ask the questions to determine what was making employees unhappy, then lean on tech to help analyze the best way forward.
Useful technology brings an accountant and client together instead of pulling them apart.
Lean into the “risk mitigator” role
Accountants have always been risk mitigators for their clients, but during the pandemic, that role has taken on a new urgency. They’ve solved serious problems before they happen, whether it’s advising on major people decisions like furloughs vs. layoffs or avoiding wrongful termination suits.
To thrive after the crisis, accountants must lean into risk mitigation as a central part of their jobs. Finding the right relationship with technology can help. With base-level compliance and payroll tasks automated, accountants are left with time and space to evaluate their clients’ business health and get ahead of challenges around the corner. For example, they can proactively combine payroll, business goals and financial performance, helping clients protect their business and team and strengthen the employer-employee relationship.
There's no doubt that the accounting profession continues to evolve quickly, and many believe there is a significant priority shift in the industry. The pandemic has accelerated accountants' shift to better adapt to unforeseen events and current demands, thus ensuring they can stay resilient into the future. Whether they evolve into this role in the coming months will determine the future of the profession. To keep thriving, accountants must stay focused on new ways to help their clients represent employees in business decisions and build smarter business practices, relying on tech to support that evolution.