Victim or Victor? Measuring COVID-19’s Impact on Your CPA Firm

To evaluate how your firm managed the most dramatic business disruption in modern history, and where it should go from here, it’s time to ask some tough questions.

I’m sick of the word “unprecedented.” Yes, what we’ve been going through since March is unprecedented, along with the other well-worn words used to describe it: challenging, uncertain, turbulent. But honestly, I’m tired of them. Aren’t we all? I long for normalcy, consistency, and routine, even though I know rapid, significant change for my CPA and advisory firm—and the profession—will continue. But this is a perfect moment for one thing: analyzing your firm’s response to a new kind of crisis.

WERE YOU PREPARED?

I’m not asking if you expected the pandemic to hit close to home—practically no one did. But how did you handle the unexpected once it was thrust upon you and your firm? Ask yourself the following questions to judge how you performed in four key areas:

1. Protecting Your Team

Despite our services being deemed essential, we still had to navigate the stay-at-home executive orders, maintain safe social distancing, and wear masks when serving clients.

• How quickly were you able to modify your standard protocol?
  
  
• How many major changes did you need to make?
  
  
• Were you able to communicate changes to clients and staff clearly and quickly? 
  
  

2. Taking Work Remote

The quick transition to work-from-home arrangements for many businesses and professionals once again highlighted the importance of being a technologically savvy CPA.

• Did you have a technology plan in place prior to the pandemic, and do you have one now?
  
  
• Did you have the necessary hardware, software, and connectivity tools in place for you and your team?
  
  
• What delays did you experience in shifting to a remote working arrangement, if you were able to implement one? 
  
  

3. Staffing Your Firm

Even with permission to continue operations, conducting business was a challenge. We faced disruptions at the office, at home, and with staff.

• Were you able to respond quickly to quell staff health concerns or discomforts?
  
  
• How quickly were you able to process health rules and recommendations and respond accordingly? Were you able to keep your staff engaged and productive?
  
  
• If you executed layoffs or terminations, were these due to lack of work, a change in the skill sets needed, or management’s inability to appropriately adapt to upheaval? 

4. Reaching Business Partners 

We are in the people business, so strong relationships with clients, customers, and vendors, etc. should come naturally. But a crisis stresses these relationships.

• Were you able to leverage strong relationships built over time with clients and vendors, or did this expose where relationships may have been lacking? 
  
  
• Did those relationships support your firm, or drag it down?
  
  
• Did your communication with key stakeholders increase or decrease during this time? 

For years, thought leaders in the CPA profession have stressed the importance of being future ready, adapting to technology, change, and the shifting requirements of leadership and diversity. What we’ve experienced, and what we’re still experiencing now, is the ultimate test of our future readiness. This crisis has exposed exactly how prepared (or not) we were as professionals and firm leaders. Could we have anticipated that a health crisis that started on the other side of the globe would have ravaged our economy in the manner it has? I doubt it. But that doesn’t mean we should have been caught unprepared, and it definitely doesn’t mean we should remain unprepared.

WHAT DO FUTURE READY FIRMS DO?

To say we’re somehow out of the woods would be foolish, but as we’re still processing the changes and challenges in establishing stability within the uncertainty, now is the perfect time to plan for the next pandemic, shutdown, recession, disruption—whatever comes next. But it’s not by writing a manual or establishing policies and procedures, it’s by transforming the structure of your firm.

Do you think the firms who were best able to handle the instant disruption were those who had the best disaster recovery plans or were lucky enough to be in the right niche or had the appropriate service mix? No way. It was the firms that had already envisioned the future.

Here are some of the steps future ready firms took before the crisis:

• They had adopted the latest technologies.
  
  
• They had paperless processes in place, including for collections, bill pay, and obtaining signatures.
  
  
• They had eliminated as much on-premises hardware and software as possible (i.e., migrated to the cloud).
  
  
• They had been offering work-from-home arrangements for years.
  
  
• They had built a diverse team with the wide-ranging skill sets and perspectives critical to thriving through sudden change.
  
  
• They had woven flexibility and innovation into the fabric of their culture.
  
  
• They had developed a network of industry professionals and peer firms to brainstorm with and bounce ideas off. 

Put simply, they built their firms for reinvention. They didn’t know what was about to hit them, but they were unfazed by most of the changes other firms were scrambling to navigate. Sure, they were impacted: They may have lost clients whose businesses collapsed or had to let some team members go. But they were miles ahead of most of their competitors, and they’re realizing significant benefits because of it.

The firm of the future isn’t necessarily the one with the most tools or the fanciest technology (although it helps); it’s the one who survives and thrives through continually increasing rates of change. This requires a different mindset. You must get comfortable asking yourself, “What if?” What if this vendor goes out of business tomorrow? What if our current accounts receivable balance goes completely unpaid? What if I’m not able to meet in-person with my clients or staff for the next six months? Get creative! The answers to these questions should help you plan and implement incremental changes that move you closer to becoming a future ready firm and, perhaps more importantly, develop the mindset and culture to keep you there.