Will Covid-19 Change Millennial Minds About Accountants?
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As I’ve spoken with small business owners navigating the many uncertainties of COVID-19, I’ve been struck not only by their remarkable resilience, but also by the fact that none of them claim to have all the answers. More than ever they are relying on peer networks, online communities, phone conversations, email interactions with friends and – perhaps most importantly – the advice of advisors such as bookkeepers and accountants as they seek to keep their businesses afloat and profitable.
The value that bookkeepers and accountants can provide to small businesses every day, but especially during times of crisis, is something that millennial business owners never really had to seriously contemplate until now. Xero's recent Young Entrepreneurs Report found that millennials have been responsible for launching more than half (52 percent) of new small businesses in the United States from 2016 to 2018 and have become a major source of growth for the U.S. small business economy. But most of these owners have never been through the depths of a financial crisis as their older peers have, and they have certainly not experienced a challenge as profound, sudden and devastating as the one brought about by coronavirus.
Our survey of millennial business owners was conducted pre-pandemic, so it’s interesting to look at the results, and especially their perspectives on the value of accountants and bookkeepers, with the benefit of a few months of hindsight.
One of the more interesting conclusions of the survey was that millennial business owners have a strong ambition for growth but also found it more challenging to run their businesses than older generations, especially in areas such as increasing sales and clients, controlling costs and learning new strategies and skills. What the research brought home more than anything is that millennial owners are enormously passionate about their businesses, but they can struggle with the kinds of skills that accountants excel at, such as keeping an eye on costs, crunching sales figures, managing cash flow and developing short-term and long-term plans.
It is perhaps not surprising, given the thriving economy of recent years, that millennial owners also tend to be more critical of their existing accountants and bookkeepers. Absent a major crisis, the day-to-day value that accountants provide might have been taken for granted. In fact, our research found that a large percentage of those who use outside advisors told us (pre-pandemic) they wouldn’t recommend them to friends, and more than half said they were likely or very likely to explore replacing them entirely.
In this respect, COVID-19 has given accountants an opportunity to prove their worth to business owners who represent the bulk of their client base for the next 20 years. As I’ve spoken with millennial owners over the past few months I’ve heard countless examples of advisors going above and beyond to help their clients, even as they faced many of the same challenges their clients have been confronting. Advisors have been key in helping young entrepreneurs increase cash flow, maintain staff, navigate government assistance programs and secure badly needed loans. In an environment where business owners need to focus on the day-to-day, accountants have been integral in helping small businesses get back on track.
At the same time, COVID-19 has exposed accountants who are falling short. Those who are excelling have learned to flex new muscles, master new skills and interact with and advise their clients in new ways, with face-to-face meetings out of the question. They’ve invested in strong digital capabilities, are cloud-savvy and highly flexible.
COVID-19 could very well be a turning point that forever changes the millennial relationship with accountants, especially for those advisors who can help businesses successfully make the turn from just getting by to thriving. For entrepreneurs, COVID-19 is an opportunity to look hard at how they are integrating their advisors as part of their overall team and determining whether their accountants are providing the right skills and capabilities to support them through this crisis period and beyond.