Coronavirus & Bookkeeping & working remote–accounting in the post-covid world
When Covid-19 knocked
Many nations started the year 2020 in a very promising manner with plans to continue their improved growth plans. What ended up happening was a severe 3.5 per cent contraction in the global economy (IMF, January 2021) as Covid-19 went on rampaging across the globe. The impact varied across industries where some industries like pharmaceuticals thrived, others like hospitality have not been able to catch a break to date. The financial sector suffered some strong hits to its foundations with organisations having to pivot on short notices. As for accounting, let us look at some of these vital impacts that were more pronounced in medium and small-scale accounting firms:
i. Payment Delays: As businesses went through the nightmare and looked for the proverbial straw to survive, accounting firms saw either delay in payments or termination of contracts. This caused more distress among the small accounting firms as their clients were also small businesses that did not have ample contingency reserves.
ii. Downsizing and restructuring: As the economic slump made it difficult to get new business or raise money, downsizing came as the first obvious step. This downsizing in turn ended up hurting their present clients as the limited manpower ended up hurting their advisory capabilities at a time when clients were looking for more guidance. This led to the closing and selling of many small firms.
iii. Cloud accounting: One common theme among the firms that managed to survive was their cloud accounting capabilities. Firms that failed to upgrade their services with time got ambushed as there was not enough time and resources to upgrade systems and people competencies once the pandemic induced lockdowns hit. Thus, catching them off-guard to fight back.
Covid-19 showed the way to Digital Accounting
The pandemic forced the accounting professionals to relook their traditional way of working. Some new procedures like building strong virtual teams, adopting new technologies, thinking creative ways of client onboarding and engagement, and enhancing service offerings were adopted by forward-thinking firms alongside upgrading the skill-set to stay relevant in an environment that is extremely uncertain and constantly changing. Digital accounting brought in massive benefits for accounting professionals and businesses. It allowed users to access their financial data anywhere, anytime, and offer quick, error-free service. For most medium and small businesses, their account books are nothing but a heap of receipts mouldering in the abandoned corners of the offices. Such a disorganised manner of storing information makes it a colossal task for the accountants to provide the company with high-quality, seamless, efficient and timely bookkeeping service. This is where digital accounting is making amends. The software makes it easy for accountants to access all the receipts and other transactional records from a single cloud space. And from here, they can take on other work, including the filing of ITR and computational work. Digital accounting holds the potential to provide MSMEs with the much-needed facility to channelize their financial processes strategically for more efficiency.
Trust and Remote work culture
Another crucial obligation for all kind of businesses in 2020 was to look after the safety and security of their staff members while ensuring business continuity. It was a tough bargain but there are a lot of firms that succeeded, and these firms are now best.
equipped to dominate the post-Covid world. These firms were quick to get comfortable with new working models like working from home, flexible working hours, and alternate shifts in the office. Thus, letting the hitherto tamed genie of remote working out. One reason to call remote working the most promising silver lining of Covid-19 is because the practice impacts all industries, though to different extents. As for accounting, when both large and small accounting firms scrambled for innovative ways to keep working, remote working no longer remained a policy exception and became the norm. The apprehensions around client confidentiality in a remote setting were tackled by the development of robust cyber-security infrastructure and improved trust in digital means. As Covid-19 wanes, organisations are warming up to the idea of outsourcing accounting even offshored.
To conclude
The foundations of accounting in the post-Covid era are being built on a new model which thrives on trust in a remote setup. This is enabled by a robust digital infrastructure that allows quick and safe data handling. Skilled accounting powerhouses like India are set to benefit from this budding trust in remote accounting handling as initial results look promising. With signs of disruption weakening, it is only a matter of time that we see the full potential of these new ways of working unfold.
