2020 Year in Review – Professional Services Sector
Maintaining high levels of client service during a pandemic when your entire employee base is working remotely may have filled most partners and professional service firms with dread 12 months ago. But fast forward several months and this thinking has…
Blog17th Dec 2020
Maintaining high levels of client service during a pandemic when your entire employee base is working remotely may have filled most partners and professional service firms with dread 12 months ago. But fast forward several months and this thinking has certainly changed.
Speaking from first-hand experience here at AAB, the forced new way of working has certainly delivered several positive experiences and lessons which have helped shape our thinking about how professional services can be delivered in the future. A key highlight for our firm has been how we have been able to work with our clients to continue to deliver for them.
Through our adoption of technology, we have been able to work with greater agility and be more connected than ever with our clients. Being able to hold Teams, Zoom and Skype calls at the drop of a hat has enabled us, and many professional service firms alike, to operate and communicate at a pace which has been essential in ensuring that we have been able to deliver clear and concise advice at critical times for our clients. The widespread adoption by ourselves and our clients of cloud-based, technology enabled accounting systems has further allowed us to work closely with our clients using real-time financial data and informed earlier decision-making.
We have seen professional services communities and networks pull together to face uncertainty and adapt to resolve common challenges across a broad range of matters on technology, training, safety, service delivery and key financial decisions. There have been positives, but professional services firms have also needed to tread with real caution this year, as lockdown restrictions and COVID-19 have maintained their grip on the global economy.
For most professional services firms, 2020 was all about resilience. For 2021 it will be about recovery and resilience.
We can now look forward to 2021 in the knowledge that a vaccine has successfully been developed and that as restrictions gradually lift next year the true underlying state of our economy shall come into view, as will the extent to which our clients and our staff wish to work differently with us.
Our advice to professional service firms remains consistent with our messaging from earlier in the year.
The advice we have delivered to our clients over recent months has often mirrored the steps we have taken ourselves as we also look to mitigate our way through the pandemic and come out the other side stronger.
Forecast for every possible eventuality, as well as what the business will look like when normal service resumes. Remember that any deferred or time-to-pay agreements still need to be paid. Make sure these are included in future cashflows and forecasts to prevent any nasty surprises in a few months.
Work in Progress
Review WIP to see what can be billed now and in the short-term. Be realistic and deal with WIP balances which are not billable or not recoverable in full.
Actively Manage Accounts Receivable
Remember that clients are likely to be in the same boat, so communication and compromise are so important. Find out when and what customers can pay. Whilst wanting to generate as much cash as possible, it is worth remembering that it is preferable to receive some payment rather than risk getting nothing at all.
Review outgoings and filter liabilities/recurring expenses by amount, frequency and whether they are critical for on-going trade. Continue to keep a tight grip on any expenditure that is not vital. Recruitment freezes, have been a common strategy across the sector, however this must be balanced with the need of the business to continually develop and grow in future.
These have had to be fluid by necessity for most businesses this year (in many cases ripped up altogether) however it is important for firms to focus getting back on track in 2021 as quickly as possible. This means developing a business plan that defines what success should look like for professional services firms in 2021. This should take account of key observations and lessons learned during 2020 and set clear goals and milestones for 2021, whilst remaining flexible enough to recognise that much of the economic shock of COVID-19 still remains ahead of us.
You can find out more about how we work with the Professional Services Sector, and their clients, here