With the success of the vaccine rollout and the announcement by the Prime Minister of the Government’s roadmap out of England’s third national lockdown, better times finally seem to be on the horizon for tens of thousands of businesses and particularly those in the retail, leisure and hospitality sectors.
However, while these businesses now have a reasonable idea of when they may be able to begin trading again and in what form, getting to that point is not necessarily straightforward.
Unlike some other countries – most notably, Germany – the UK has not offered a financial package for businesses tied to lost revenues, choosing instead to support employers in preventing redundancies and providing more limited support tied to business rates.
At the same time, businesses’ ongoing costs such as rent have largely continued through the crisis and the furlough scheme has since August 2020 required some level of contribution from businesses that may be generating no revenue at all.
As a consequence, the finances and cash flow of thousands of otherwise viable businesses have been decimated by the crisis.
This makes the challenge of reopening doubly difficult, given the likely need to buy new stock – especially in the hospitality sector where businesses rely on perishable ingredients – and to market the fact that the business has reopened.
Fortunately, for many of these businesses, there are likely to be options available to enable them to trade once again. The difficulty comes in understanding what is likely to be the best option for any given business.
That is where accountants come in.
The accountancy profession has, of course, been moving increasingly towards an advisory approach for several years. Now, the importance of an advisory approach looks set to rise exponentially as we – hopefully – move into the recovery phase of the crisis.
Professional advice is set to be vital for businesses that have been closed for much of the last 12 months, or which have only been able to trade at partial capacity.
The assistance of accountants in helping to strategise, plan and forecast, as well as in accessing finance, will be both invaluable and in high demand.
How can accountancy firms cope with the likely demand for advisory services?
Generally, accountancy firms have focused the provision of advisory services on partners, which makes sense as they are usually going to be the most experienced people in the firm with the most real-world understanding of client businesses.
Now, it seems likely that people at the manager and associate level will need to get more involved with the advisory side of things than they have been traditionally.
This is where outsourcing is likely to be vital in the coming months – by outsourcing services such as, Bookkeeping, VAT, Management Accounts, Yearend Accounts, Tax & Payroll, firms can free up staff time to speak with clients, help them through the crisis with business advice and improve the quality of client relationships.
Want to know more? Get in contact with me or one of our UK team today.