What 2021 might look like for the accounting profession - predictions for 2021

Hey, it's Mark Wickersham here. And in this video I'm going to share with you my predictions for 2021 for this coming year. I'm going to share with you in particular, number one, what I believe is the most important thing for your clients over 2021. I'm going to share with you. Secondly, I'm going to share with you what is the big mistake that we must avoid in the profession as accounting firms. And number three, what is the big opportunity?

Okay, so my predictions for 2021 and before we dive into those, in case you don't know who I am, my name is Mark Wickersham. I'm a chartered accountant. I've been in this profession since, crikey, way, way back now. In 1988, I came out of university, Sheffield University, started a training contract for a large multi partner firm of accountants in Sheffield, qualified as a chartered accountant after three years and then became a tax specialist and corporation tax manager. That was up until May 1996. In 96 I decided I want to go it alone and I started my own accounting firm. I had no clients. I was starting from a clean sheet of paper, always going out there to win new business. And May 96, it was an exciting time. It was a time full of hope, full of enthusiasm, excitement. I was going to build this big firm. And certainly if back in 96, 97, 98, you were on the outside looking in at my accounting firm, you might have thought I was building a really successful firm because I was growing fast. I grew from my bedroom into my first offices inside three months. I outgrew those offices in 15 months and move into bigger premises after about three or four years. I had a team of 13 people. I had over 200 clients. I had getting on for 300,000 in fees. Four or five years in, I was growing fast. I looked successful. However, the truth was far removed from that. I was, I was struggling. I was really struggling two and a half years in. By the end of 98, my life was a mess because I'd made so many crazy mistakes and I'm going to touch on one of those in a short while. Anyway, I sold my accounting firm to the client managers. A few years later I made some changes and turned it around. They bought it from me. I was then very fortunate to go into business with Steve Pipe. I ran AVN with Steve Pipe for over a decade now, helping UK accounting firms build more successful accounting practices. And then in 2014 I founded the Value Pricing Academy. And all I do now is I teach Accounting firms around the world. I teach value pricing. I'm the author of a number of books like Effective Pricing for Accountants, A Practical Approach to Pricing and Pricing Price the Fast Way to Change Profits. And I teach accountants around the world and bookkeepers every single month through the Value Pricing Academy. We go live every month. And I teach value pricing, I teach some marketing, I teach a bit about business advisory as well, and how to profit from that. So let's go into my predictions for 2021, and as I said, I'm going to talk about three things. Number one, what is the most important thing for businesses for your clients in 2021? Number two, what's the big mistake that, that we must avoid in the profession? And number three, what is the opportunity? So, as you know, 2020 was incredibly tough because of the pandemic we had to change. And a phrase that I used a lot in a lot of my webinars in 2020 was, we have to reinvent and really reinvent in a number of ways, reinvent in ourselves personally, about our own personal lives because so many changes have taken place. You are perhaps that now you're working from home rather than from an office. So we're having to change ourselves. We're also having to reinvent as a firm in terms of how we communicate with our team, how we communicate with our clients. And also our clients have had to reinvent because many of those have gone through some fundamental changes. Many have perhaps struggled in business. Some have had to get to grips with new technology in perhaps the same way that you have and started to figure out things like Zoom. In fact, interestingly, I wrote, I have a piece of software called Effective Pricing for helping accounting firms give a price with confidence based on value in a meeting. And I was talking to my software developers in March 20, March, April 2020, when the lockdown in the UK happened. And in the past, before then, I used to go to their offices, we'd chat over coffee and so on. And it was interesting that despite the fact they were an IT company and having to shut the office and work from home, they were really struggling with the technology. So I was giving them tips on how to use Zoom. Now they love it. Now, some months on, we get together much more frequently, communicate better as customer and supplier, using technology, using Zoom. It's a better way of doing business. So we've all had to change your clients. You have, your firms had to change, change. It's been a challenging year. However, despite the challenges, I would suggest that for your clients, those that are still in business for your clients. I predict that 2021, the next 12 months is going to be even harder still. 2021 will be harder for businesses than 2020. Yes, 2020 was tough on us from a personal point of view, but with this pandemic and lockdowns and the fact that we had to change our lifestyles and the fear of this disease. But I think in terms of 2021, it will be businesses that find it harder. Why? Because, as you know, we've had the governments around the world have been doing various reliefs, tax breaks and so on. For example, deferral of tax, deferral of VAT to help businesses survive in 2020. The problem, of course, is, is that many of the things that your clients have had access to, cash, has been something they've got to pay back at some point. Whether it's a loan, whether it's deferrals of tax, whether it's deferrals of vat, it's going to have to be paid back. And they've still had this big halt from 2020 where they've struggled. And in 2021, we're into it now, as I do this video, we've still got lockdown. We're not over this. And so the fact that a, we're not fully open to business yet, combined with the fact that your clients are going to have to start repaying these taxes, these loans, means that 2021 will be harder in general for businesses. And so that brings me to the first point is I think, I believe that for your clients, the number one thing for them, the most important thing for them is going to be cash. Cash flow more so than ever. Yes, cash is king. Cash has always been important, but so is growing a business. So is revenue, so is profitability. So as margins, all those things have always been important. Cash has always been important. I think of all those things, cash is going to take an even greater importance because of the fact that a, we're still not fully open to business, clients are still having to reinvent, having to change, having to find new sources of revenue, and at the same time having to pay back all this money that they've had from deferrals of tax and loans and so on. So cash is going to be a challenge, and therefore cash flow, of course. And that means that.

Because of that issue, we may fall into what I believe is the big mistake that some firms make will make some firms are doing right now, and it will also helps us with the opportunity. So what is the biggest mistake that Firms make. Well, the big mistake that firms make is when times are tough as 2020 was. When times are tough, when the client, when clients are struggling, when they're struggling with cash, then accountants, there's an effect on accountants and bookkeepers and there's a natural tendency to say to ourselves, we need to keep these clients, we need to keep them happy. We keep them, we need to win more clients. And so we're going to that by keeping our prices low. And I've seen many discussions on social media platforms of accounting firms talking about reducing their prices to attract more clients to help their existing clients. And that is a huge, huge mistake. Because as a profession, historically, we've always been way too cheap. That's why as a profession, we're working crazy hard for not enough money. We work too hard and not don't make it the profits we deserve because the root cause is our prices are too low. We don't know how to price. We're pricing the wrong way. We're pricing the old fashioned, redundant way, pricing based on the hour. We have to change that. We have to change the way that we price. And the thing that's interesting about this pandemic is many people think that because times are tough for businesses, we need to reduce the prices. However, we should actually do the reverse. Why? Why should we put our prices up? The reason for that is because firstly, not every client will survive. There are businesses out there who probably shouldn't really be in business. And so the challenges of 2020, the challenges of 2021 will start to weed out some businesses that really shouldn't be in business. But there are plenty of other business out there who are reinventing, who are building great businesses, and they're the ones that you want as clients. And the thing is, when times are tough as 2020, 2021, when times are tough, your clients need you more than ever before. This is a great time for our profession to really rise up to the challenge because we can deliver value in so many ways because of this greater need through things like helping with cash flow, through helping understand all the various rules, the changing rules with furloughs and tax deferrals. And in cash, clients need you more than ever. And you have an opportunity to add more value. When you add more value, when you can help your clients survive these tough times, help them survive and grow and thrive, then you can also charge higher prices when you value price, not when you price based on the hour, but when you value price. And that brings me on to the third point. So.

The huge opportunity is clients need you more than ever. Cash is so important and so we have to have and this is not a new message. You know this, it's been talked about since Paul Dunn in the accountants boot camp in the 1990s. We have to add more value. We have to shift from doing purely compliance work to moving to advisory. And so things like helping clients understand cash better, doing forecasts, giving them advice, helping them to become better at advice, at building a business, surviving these challenging times, using advisory services, you can add huge amounts of value. So just to recap the three things, my predictions for 2021, cash is going to be more important than ever because 2021 will be harder for businesses than 2020. Number two, we must not fall into the trap of thinking we have to reduce our prices. Instead, what we want to do is focus on adding more value in changing clients lives, in helping them through these difficult times and pricing appropriately. This is an opportunity. And number three, recognize that because clients need us more than ever, because cash is so important, we need to be having more of a focus on business advisory. And that's the opportunity for us as a profession. It's going to be more talked about than ever before. If you want to find out more, my name as you know is Mark Wickersham. My website address is www.wickersham.co.uk. you can get some more information there. But the best thing that you can do is go and join my Facebook group. It's a community of almost 8,000 accounting professionals. It is called Value Pricing with Mark Wickersham. So just go to Facebook, type in the search box Value Pricing with Mark Wickersham. You'll get the opportunity to join the group. It asks for two questions. Please do answer those two questions because we don't let anybody in. But I will let you in. Just say that you question number two, just put Profit Pro. That'll be sufficient. I'll know who you are, I'll let you into the group and once you're in the group then you can ask me questions. You can network and share with other people in the group and and also look out for. Every month I run free training events, webinars to help you with your pricing and your marketing. I always put the details in the Facebook group. Thank you so much for listening to me. Goodbye for now.