Whilst the Accountancy and Bookkeeping sector isn’t immune to the economic disruption caused by an economic crisis or recession it is uniquely placed to help clients to cope with the economic impacts of it.

If you work in this area, you’ll be able to provide practical advice to clients about how best to protect their business and reduce the risk of damage, whilst also providing essential emotional support too.

So, with that in mind, we’ve examined 7 ways accountants can support their clients during a recession or economic crisis. Have a read below.

What causes economic crisises?

To put it simply, an economic crisis or a recession is when an economy is shrinking rather than growing. Generally, an economy is considered to be ‘in a recession’ if its GDP (the combined value of the products and services that a country has produced in a period of time) shrinks in two successive quarters.

Unfortunately, recessions and periodic economic crises are one of the side-effects of our economic system, capitalism. They reflect the ‘boom and bust’ cycle of growth that is fundamental to capitalist economies, where the economy expands rapidly and then contracts harshly.

As recessions are a fundamental aspect of capitalism, there’s nothing we can do to stop them, short of changing economic system. We can take steps to prepare for, and mitigate, the damage that they cause and help companies build their resilience to cope with them. This article should hopefully give you some thoughts about how you can do that.

Is the UK in a recession yet?

For the last year, the UK economy has puzzled most economists by avoiding dropping into a recession, despite soaring interest rates and the effects of record-high inflation. It seems likely that this luck is about to change though.

A recent report by insolvency firm Begbies Traynor found that there had been a startling 25% jump in the amount of businesses who were reporting being in ‘critical financial distress’ in the October, November and December 2023. This combined with other symptoms, like retail sales dropping, 3.2% in December (the busiest time in the year) are making economists jumpy about the UK’s economic healthy.

Whilst the figures haven’t been released just yet, many are starting to state that it’s likely the UK entered a technical recession in the last few months of 2023. This means it’s time for everyone working in the accountancy and bookkeeping fields to get ready to provide support to their clients.

1. Provide advice on the financial support available

During an official recession, the Government is likely to be more forthcoming with dedicated support schemes that affected businesses can make use of, or more vocal about measures it is taking to reduce the pain. Although (as of writing) it hasn’t been officially announced that the UK is in recession, keeping an eye on the media, the Government website and on key industry websites can help you to stay up to date with the latest support that’s available.

One of the most useful resources you can recommend to clients feeling the pinch is the Government’s Business Support Helpline, where they’ll be able to access more detailed advice about the various schemes that are in place to help businesses weather the cost of living crisis and the current state of the economy.

The specific helpline that they’ll need to call will depend on which country of the UK they’re situated in, as advice and support will vary but all of the information is on the Government website.

2. Communicate clearly

Times like these really show the importance of good communication, and, in particular, clarity in the company-client relationship.

Clear, regular communication will help to keep your clients reassured that you’re doing your job to the best of your ability and it will also help them to feel some sense of control over their business in what is ultimately a very uncertain situation.

Make a point of phoning your clients at least once a week to check in with them. Online meetings can be a useful way to connect on a more human level with your clients, especially during social distancing measures, when most people haven’t really seen, or interacted with, people from outside their household for a while.

We could spend this entire article talking about the art of communication when it comes to client care, so we won’t go into the specifics here. This blog by Hostinger Academy has some great tips on how to improve your communication with clients and this article by Indeed runs through the specifics in great detail.

And of course, the most important way to communicate effectively is to…

3. Listen

The majority of business owners are probably going to be very anxious at the moment.

They’ll have concerns about everything from how to pay the rent and salaries of staff when they can’t trade, through to worries about what the wider economy and business climate is going to look like after the pandemic has ended.

People are going to need a friendly, familiar person to talk to about what they’re experiencing. As a result, listening is an easy way, to support your clients through this crisis.

Active listening can help you understand what a person is really saying. Active listening is a series of listening techniques that are used by counsellors, therapists and psychologists to help get to the root of problems and offer practical advice.

Some useful active listening skills include:

• Building trust and a rapport
• Showing genuine concern
• Asking specific questions
• Using short verbal affirmations

4. Keep calm!

The last thing clients need during a stressful period like an economic crisis is an accountant who’s panicking.

Studies have shown that fear can be contagious and if you actively come across as being terrified of the situation and not in control, you’re likely to panic your clients. This can make you look very unprofessional and can end up costing you clients.

However daunting the economic situation, keep a clear head and stay calm. Fear and panic can do funny things to our minds and can cloud our judgement. By staying in control of your emotions – and managing those of your clients – you’ll be able to make better decisions.

5. Think carefully about cash-flow

Needless to say, liquidity and cash-flow are likely to be some of the most pressing concerns that your clients will be facing at the moment.

Recommending ways in which your clients can boost these during the current crisis will help to shore up their defences. It's a very pragmatic way that you can support them. Above all else when it comes to cash-flow, ensure that your clients have adequate liquidity to weather the short and long term consequences of the economic crisis.

6. Provide accurate financial reports

Businesses are obviously going to be paying particularly close attention to their finances right now.

It’s likely that your clients will want up-to-date financial reports so that they can base their decisions on the evidence in front of them, rather than having to guess about the financial health of their company.

You can improve your ability to respond to requests like this by thinking carefully about the way that you organise raw data and the way that you present it in reports. Looking at the processes that you have in place to manage requests like this and thinking about ways to improve them can help boost your capacity too.

7. Be flexible in terms of payment

No-one really knows what the future holds for the economy at the moment – but all signs are that it’s not going to be pretty.

Help your clients cope with the impact of the crisis by being flexible in terms of payment (if you can).

Obviously, you’ll have bills to pay too, but offering longer payment terms or some kind of arrangement to help clients spread the cost will be very appreciated.

We hope you've found this blog useful and that it's given you a few ideas about how you can use your accountancy practice to support your clients during economic hard times. 

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