When the entire world shut down because of the coronavirus (COVID-19) pandemic, the accounting profession had to adapt quickly. Not only did many CPA firms have to figure out how to provide services remotely, they also had to ensure that they were able to help their clients adapt to the many uncertainties facing them. The time since has been different, unusual, and stressful for many.
Reacting to a Crisis
To understand the temporary and long-term changes to the accounting profession that resulted from the crisis, the authors reached out to CPAs working in public accounting and industry, and asked them about their experiences. We focused on understanding how the pandemic and its economic consequences have changed our profession, both in the short term and the long term. Our survey comprised a list of open-ended questions, covering topics including challenges identified by staff and customers, hiring and layoffs, pay cuts or furlough, technologies related to working-from-home, work-life balance, and office set-up. We received responses from owners of local public accounting firms, managers working in accounting departments of large corporations, and senior-level employees of large national and international CPA firms—including the Big Four.
A common theme we observed from the responses during the early stages of the COVID outbreak was the stress that the busy season had caused. Many tax professionals commented that, although the extension of the federal income tax due date to July 15, 2020, was needed at that time, it resulted in a never-ending busy season. There had been no rest the entire year. It seemed that everything was urgent, and combining with the stay-at-home orders and travel bans, many professionals felt that they had no (or very little) vacation days and time off. “Personally, working where I live is very difficult,” one respondent said. “It’s difficult to mentally escape.”
To others, the isolation from clients and colleagues also added stress. The biggest immediate challenge had been how to keep staff and employees mentally in check. It is therefore not surprising that for many accountants, work-life balance had gotten worse because of the pandemic. One response brings the way-too-common Zoom fatigue to a point: “Next thing you know, you’ve been on so many Zoom calls, 10 hours have gone by, and you’ve eaten no food. Being virtual with nowhere to go, no commute, fewer folks taking time off to travel, has almost made us too accessible and not as enjoyable of a work-life balance.” The increased stress was particularly real for those with young children who also struggled with balancing increased work hours and childcare duties. “Both my spouse and I ended up working a lot more hours to catch up since we couldn’t really focus during the day,” one respondent with a 4-year-old and a newborn commented. Others chose to go back to the office in order to get work done. Many employers surveyed have offered flexibility in terms of work hours to people with children.
The difficulty of working remotely also extends to hiring. Fortunately, many accountants told us that they were able to hire during the pandemic or are planning on hiring. Hiring took place in a mixture of in-person and virtual interviews. One respondent reported enjoying the virtual hiring process. “The process of interviewing and onboarding via Zoom is very easy and less intimidating than in-person.” Yet, the majority of accountants stated that they found the hiring process to be more difficult because of the limitations of in-person meetings. Several respondents who hired virtually mentioned that the interviews would have been better in person. There also seemed to be a trend of CPA firms hiring temporary employees to work remotely. After hiring new employees, the immediate next steps of coaching and mentoring new staff also created challenges in a virtual environment. Recruiting and retaining talent will likely remain a big challenge for many CPA firms moving forward. Unfortunately, there have also been layoffs or significant pay cuts—especially at larger firms. Our non-representative sample indicates that about half had furloughed employees or let them go while the other half kept their staff in its entirety. Some firms also offered early retirement packages and temporary salary cuts in order to reduce payroll costs.
Adapting to a New Environment
The authors believe that it is a good sign that most respondents said their revenues and client base had not changed very significantly because of COVID-19. Some stated that they lost clients, but not because of the economic crisis. The general sense is that firms are worried about keeping clients, attracting clients, and their revenues in the near future, but they are not worried about having work to do; if anything, the crisis made the need for accountants more apparent. Some responses from the corporate world also indicated that business declined first, but did rebound quickly.
As for the technologies related to working from home, many accountants stated that working remotely was not new to them. Several CPA firms among our respondents were able to adjust to working virtually very quickly. “We utilized Microsoft Teams and VPN prior to COVID,” one spokesman reported, “and our Teams usage has skyrocketed during COVID for both video calls and document sharing.” Zoom and Skype are also popular choices for video conferencing. For those new to the technologies, the learning curve did not appear to be very steep, and people learned to adapt swiftly. Some bigger firms even provided a financial stipend for employees to purchase or upgrade equipment such as laptops and routers.
There were mixed feelings about using these virtual meeting tools. One CPA stated, “I prefer video-conferencing. Some of our older individual clients currently prefer video-conferencing due to the risk of COVID-19.” Another respondent commented, “I prefer face-to-face, but I think there are some efficiencies by not waiting for appointments to arrive.” The majority of our respondents, however, did prefer face-to-face meetings. “The CPA-client bond is made very strong by in-person appointments, and accounting is very much a relationship business,” according to one CPA. “Video-conferencing doesn’t really add much value to client appointments. There really is no substitute for good old fashioned human contact.”
When asked if there had been any changes to their office set-up, respondents answered in a variety of ways. Some stated that their firms moved staff out of cubicles and into individual offices for social distancing. Others said they plan to downsize office space due to a reduced need for physical space. One firm was able to negotiate a lower rent with its landlord for lease renewal.
Not surprisingly, CPAs listed economic uncertainty and potential changes in the tax law and tax rates as some of their clients’ most prominent fears and challenges. Other issues listed are the worry about possible cybersecurity threats (because of remote work from unsecured locations), politics in general, and the possibility of another wave of the pandemic (and shutdown). Some accountants listed the government help (such as the PPP loans) as “extremely helpful”; others said that in the beginning, the rules concerning these programs were complicated and the processes were obscure.
When looking at the next busy season, accountants are worried about the communication with clients and within the companies since most will still be working remotely. Our impression is that most have either gotten used to working in a virtual office space or are still in the office at least part-time. Yet many expressed a preference for face-to-face meetings and interacting with people.
We also noticed some positive changes in the COVID era. Many respondents commented that the pandemic accelerated the process of digitalization and paperless operation, a trend that was already slowly gaining steam prior to the COVID outbreak. “This has forced many companies to change processes that have long been archaic. I think a lot of good will come out of this forced adapting to new ways of doing things. It will make for a better working environment for accountants.” To others, the flexible work-from-home schedule and less commuting time allowed them to pursue personal hobbies or simply take an early lunch; greater flexibility and improved technology also created excitement for the future of accounting. If anything, the pandemic has forced CPAs to have emergency plans in place, one of which is the need for more secure cyberspace to protect company and client information so that people can safely work from home.
The authors would like to conclude with an optimistic outlook and positive image of the profession. Although CPAs are worried about the coming months and years, and many are facing challenges with regard to revenues and staffing, some of the changes wrought by the COVID-19 pandemic have catalyzed necessary changes in practice. Examples listed by survey respondents included embracing technology, providing more flexibility of work schedules, working remotely in different regions, and accepting clients from other areas. Other possible changes include reducing office space and ensuring the presence of emergency plans. Last, but not least, many individuals and businesses have realized the need for CPAs to understand and utilize various government assistance programs, such as PPP loans. This highlights that CPAs are more than just tax preparers and “bean counters”; accountants have a role as a business consultant where they can help their clients navigate new challenges and plan for a post-pandemic world.