Why bookkeepers should see recession as an opportunity
Despite government loans and furlough schemes, the UK has officially entered recession for the first time in 11 years. Between April and June 2020, as coronavirus lockdown measures hit, the economy shrank by 20.4% compared with the first three months of the year.
It’s a worrying time for small business owners and many will be looking to cut costs. However, it is not all doom and gloom. In fact, the recession could be seen as an opportunity for bookkeepers. In fact, many people thought I was mad when I set up my own business Women Who Count in 2009 following the crash of 2008, but I quickly gained clients and my business grew and flourished. It was only with the benefit of hindsight that I understood why. When times get tough people generally trade down – so whether that’s changing where you do your weekly shop or how to cut business costs it’s a universal fact that In hard times people tend to “trade down”.
“It’s important that IAB Members make the most of this opportunity”
As a bookkeeper, I picked up many new clients who were looking to save money on their accountancy bill. We all know that bookkeepers can provide many of the services an accountant can and at a lower cost, but it is not generally until the money is tight that clients will actually embrace that concept. This time around I am already seeing a large increase in enquires and new clients signing up. Some of the new clients come from business owners taking services such as payroll away from accountants as they are traditionally more expensive. During times of economic uncertainty business owners also want a more personal service which is something bookkeepers can offer – they often have a more regular and personal connection to their clients than accountants.
It’s important that IAB Members make the most of this opportunity – by moving into a more advisory role, for example, forecasting or planning cash flow and chasing outstanding invoices, can help them and the businesses they are working for.
It’s also important that our members help their clients to look ahead and be prepared – making sure they now pay (or set up payment plans) for any future VAT bills, which they did not pay when the government said they could defer payments until March 2021. Deferring was a great option for businesses during lockdown but, ultimately, I think only businesses which are debt-free and have sound financial plans in place, will survive the recession.
Some people may have found themselves out of work during or following lockdown. Once the furlough scheme ended we saw the unemployment rate rise and it’s likely to continue to rise while the economic climate is so uncertain. If you find yourself in that position you might want to consider bookkeeping as a career. It does involve study but it’s also a relatively short time frame to qualify in comparison to other industries so you could quickly be earning an income. IAB is here to support you and let you know what you need to do to qualify. If you have been offered a redundancy taking some time out to study could be a really good option while jobs are scarce.
During my work with IAB, I’ve met so many bookkeepers who have come into bookkeeping as a second career. During lockdown, more and more people have discovered the convenience and flexibility of working from home – something bookkeeping offers. In fact, all of the bookkeepers who work with me are parents who have chosen bookkeeping to give them more flexibility and fit in with their family life.
While, sadly, not all businesses will survive the impact of the Coronavirus pandemic those who do will continue to need payroll and financial services, recession or not – so now is the time for bookkeepers to sharpen their skills, reach out to new clients and help ensure they are on a sound financial footing to successfully see them through this recession.