Recession fears are everywhere. The UK GDP fell 0.2% for three months leading up to September 2022, which paints a bleak picture for 2023. The expectation of a recession will be high among your clients, but you can help them prepare to weather the storm and calm their concerns with some simple tactics.
Here are three ways accountants can quell client concerns over impending recession:
When a recession looms, your clients will often sit with an outlook at one end of the spectrum: too optimistic or too pessimistic. Recessions happen and are “normal” within any economy. It is essential to remind your clients of that. Most of them will have lived through a recession before, and while it might not have been their favourite period, they did get through it.
You can help your clients get through the coming recession if you allow them to set realistic expectations.
Their sales and revenue may fall, and clients may not extend contracts. This can be scary in the short term, but recessions eventually end, and the better prepared your clients are for it now, the better they will come out on the other side.
Share your past experience with your clients and advise them that it’s better to make a plan now. If they wait until we’re in the throes of a deep recession to make decisions, they will be in crisis mode and find it difficult to think objectively.
No one wants their business to stall or lose revenue. However, maintaining a rosy outlook and pretending that problems may not be around the corner is not a smart business move. Helping your clients mentally prepare for a recession now will benefit them in the long term. And coming to terms with a period of economic downturn, especially when you were expecting a profitable year, is often challenging, so better to get started sooner rather than later.
The next piece of advice you can share with your clients to quell their concerns is to review expenses. Advise your clients to think critically about what is essential to their business.
What was once necessary may not be in the face of a recession. Review your clients' expenses with them and find where the money is going out that’s not contributing to the business.
Remind them also to consider upcoming expenses. They may have annual software or vendor contracts that they may want to renegotiate or size down in the coming months.
In times of economic stress, your clients will need you more than ever. One way you can assist them is to help them look for ways to streamline their business processes. Use your knowledge to steer them in the right direction with their technology modernisation.
New technology is constantly evolving to help businesses improve efficiency in every area of operations. Help your clients understand what areas of their business cost the most money or have the greatest potential to be streamlined.
With greater efficiency, your clients can not only help minimise the impacts of lost contracts or decreased spending but also help put employees at ease. By finding cost-saving measures within operations, your clients can retain valuable human talent and keep morale up as staff will feel more secure in their roles.
Prepare your clients for a recession with the help of our global community
Are you interested in getting more support during these tough economic times? We are partnered with accountancy firms across the globe. When you become a member of INAA, you can join our community of accountants, auditors, and consultants and tap into this wealth of knowledge to help guide you. Visit our join us page today.