David Lucas explains how businesses can access funding and trade through the COVID-19 crisis.The COVID-19 pandemic has impacted businesses throughout the country. Cash flow is scant, debt is mounting, and many companies have yet to resume trading in any meaningful way. Those that are trading again have returned to a desolate and unfamiliar environment. Shops and high streets are empty, many stores remain shuttered and, with further restrictions in the pipeline, dented consumer confidence in certain sectors looks unlikely to rebound fully until a vaccine is developed.SME supportsWithout access to significant cash reserves, liquidity and cashflow are critical concerns for many small- and medium-sized enterprises (SMEs). Fortunately, SMEs adversely affected by the COVID-19 crisis can access a range of Government supports. The schemes listed below have been well-received by business owners, but preparation is the key to a successful application.SBCI COVID-19 Working Capital SchemeThis scheme offers loans from €25,000 to €1.5 million at a maximum of 4% interest to SMEs and small mid-cap enterprises. Applicants must meet at least one criterion related to the impact of COVID-19 on their business and one innovation criterion as per the European Investment Fund’s (EIF) standard conditions. No security is required on loans up to €500,000.Future Growth Loan SchemeThis scheme aims to make up to €800 million in loans available for terms of seven to ten years to SMEs and small mid-cap businesses. Loans range from €25,000 to €3 million per eligible company, with loans up to €500,000 available without security. The initial maximum interest rate is capped at 4.5% for loans under €250,000 and 3.5% for loans more than or equal to €250,000 for the first six months. The rates after that are variable.Sustaining Enterprise FundSupport of up to €800,000 can be provided to eligible companies that have been negatively impacted by COVID-19. Funding will be provided for five years using repayable advances, grant aid, equity, or loan note, comprising a combination of repayable and up to 50% non-repayable support. Administration fees on repayable support will be 0% over the first six months and 4% per annum after that. Repayments will be due in years four and five.Restart Grant PlusRestart Grant Plus is an expansion of the Restart Grant scheme. It provides grants of €4,000 to €25,000 to businesses with 250 employees or less, turnover of less than €100,000 per employee, and a 25% reduction in turnover as a result of COVID-19.Trading Online VoucherGrants of up to €2,500 (with 10% co-funding from the business) are available to companies with ten employees or less seeking to build an online presence. The voucher is targeted at small businesses with little or no online presence, turnover of €2 million or less, and at least six months’ trading history.Business Continuity VoucherBusinesses employing up to 50 staff are eligible to apply for a Business Continuity Voucher to the value of €2,500 towards third-party consultancy costs to assist with developing short- and long-term strategies to deal with the COVID-19 pandemic.Pandemic Stabilisation and Recovery Fund (PSRF)The PSRF is set up to invest in large- and medium-sized enterprises employing more than 250 employees or with annual turnover of over €50 million. Enterprises must be able to demonstrate their business was commercially viable prior to the COVID-19 pandemic, and that they can return to viability and contribute to the Irish economy. Investments are made on a commercial basis and they will seek a return for this and can invest across the capital structure, from equity to debt.Temporary Wage Subsidy SchemeBusinesses have also relied on the Temporary Wage Subsidy Scheme (TWSS), which was replaced by the Employment Wage Subsidy Scheme (EWSS) in September. The main elements of the EWSS are as follows:A €203 flat-rate subsidy per employee per week for businesses with a decrease in turnover of 30% or more;Employers in all sectors may qualify, subject to meeting certain qualifying conditions; andThe EWSS will expire on 31 March 2021. The legislation, however, provides that it may be extended beyond that date.CashflowThe measures above can provide critical relief and cash support to businesses. However, there are other proactive and straightforward ways in which companies can meet their liquidity needs before repayment moratoriums expire in Q4.Businesses can optimise by selling slow-moving stock to generate cash, for example. Also, debtor management might sound obvious, but assets can become tied up and the longer a debt remains unpaid, the less likely it is to materialise.Debt fundingMany people talk about loan-to-value and property, but at the end of the day, cash repays debt. Property and asset values are significant from a security perspective, and the banks draw comfort from having this as security. However, in recent years, cashflow (and its recurring nature as the first port of call in servicing debt) has been increasingly analysed. Banks are not in the business of selling companies or property unless they have to, but they do need to see cash being generated to service the existing debt quantum.In this volatile business landscape, SMEs may need to renegotiate covenants or restructure debt. Many businesses will find themselves over-leveraged and unable to make their debt repayments as they fall due. Banks expect this in cases where COVID-19 has hit businesses hard, but the key to success is open communication with the bank or funder.Think of it as a partnership approach. Businesses must be extremely well-prepared as approaching a bank can be painstaking and time-consuming. That said, they do understand the position you are in; all business owner/managers want to be able to pay down debt and keep their businesses alive.The standard suite of bank covenants comprises leverage (net debt/EBITDA), interest cover, and debt service cover ratio (DSCR), with the latter often proving the most difficult to manage. As a result of existing trading circumstances, all three may have been breached or be approaching a breach. The banks have provided moratoriums in many cases, but they will need to be looked at and renegotiated as they expire later in the year.The amortisation or repayment profile on debt may also need to be readjusted to match the company’s ability to repay. COVID-19 has devastated many businesses, and some may never return to the same trading levels as before. This outcome would, therefore, require a re-calibration of amortisation; back-ending or reducing it may be the only option. Banks will likely begin to pursue ‘cash sweep’ mechanisms to reduce debt positions in a restructure. Cash sweeps can be administratively cumbersome but show the bank that you intend to work with them to pay down debt.Meanwhile, businesses seeking access to further funding must become familiar with the various options available. Alternative lenders can be less onerous in terms of covenants. They tend to lend a little bit more than the traditional banks and offer increased flexibility, but they also charge higher interest, often as high as 7%.Invoice discounting, where banks lend based on an entity’s debtor book, has also become a popular form of lending from a working capital perspective. It gives the lender increased security, as they have direct access to the debtor book. The facility limits can also grow concurrently with business growth.Private equityEquity is another potential option for SMEs in need of a capital injection. This route has become increasingly popular in recent years, as investors provide experience and growth potential as well as capital.Many business owners are apprehensive about trading a piece of their business, but it is always better to own 70% of a thriving venture than 100% of a failing one.ConclusionOpen communication is crucial at this uncertain time. Lenders understand the position many businesses are in and will expect requests to pay down debt at a slower rate, given that earning profiles may have changed. The key to success, however, is organisation and planning.Seven tips for approaching a bank during a crisisSeek expert advice. A skilled and experienced adviser will know what the bank and its advisers want and will be able to communicate this effectively.Accept the situation. Look for the positives and work with the advice given to you to identify areas for improvement in the business. Listen to recommendations and have robust discussions about solutions.Be honest. A bank likes certainty and predictability. These are uncertain times, so work with the bank and do your best.Prepare a deliverable plan. Create a budget that is real and deliverable, with actions and assumptions clearly laid out. Communicate. Deliver the information clearly and precisely to reduce the potential for misinterpretation and confusion. Don’t ignore the bank and hope that the problem will go away.Prepare. Talking to your bank can be a very confronting and stressful process. Be prepared for hard questions, and don’t take it personally.Have back-up plans. Speak to your adviser about alternatives in the market, be it a direct lender or private equity investment.David Lucas FCA is Corporate Finance Partner at PKF O’Connor, Leddy & Holmes.

John Convery discusses the important elements when creating a start-up and how you can improve its chances of success.Entrepreneurship is actively promoted and regularly encouraged. Being a business owner can be very fulfilling but starting a business is no easy task. This is a journey where you will meet a rollercoaster of highs and lows. It is a challenging, demanding, frustrating, testing, isolating, lonely, long road on the way to – hopefully – profitability and success.Research suggests 20% of start-ups fail in year one, just under 50% make it to year five, 66% have failed by year 10, and by year 15 only 25% are still surviving. Some businesses deemed to survive merely limp along for years, often referred to as 'the living dead'. However, with the right planning, mindset, and funding, improving start-up survival rates is achievable.Why start-ups failThere is a myriad of reasons why start-ups fail. In my view, it is usually due to a combination of factors rather than just one. Figure 1 summarises the most common reasons start-ups fail. They are broken into four areas:  market, founder, finance and other.Improving your chances of successTo improve your chances of having a successful start-up, you must get some fundamentals right.Sell a product/service that customers want A key reason start-ups fail is because there is an insufficient market need for the product or service. This can be mitigated through focus on the customer from the start. You must be customer-centric before you build, design, or develop anything. Take the time to put your ideas down on paper, and then go out to customers.Talk to potential customers or users, listen to them, try to identify their biggest pain points or struggles. Do market research.Build a basic, early version of the product.Go back to some potential customers, get their views and feedback.Refine, modify and enhance your product based on the feedback. Go back to potential customers again, get their views and any further changes or improvements needed.Enhance your product again.It is only with constant feedback and user reaction that you can improve the product and arrive at a point where it can begin to appeal to potential customers. It is a test and feedback loop. After the testing is done, you will begin to get a feel for a business model and pricing.Create a balanced teamFind good people with complementary skills who gel with one another – preferably a designer, engineer and marketeer. Teams build companies, not individuals. Investors also want to see a team, not a single founder.Control cashflow tightlyIt’s the job of the main founder or appointed finance person to make sure the company does not run out of money and to control finances tightly.Write a business plan The process of writing a business plan is not an academic exercise, it is a validation exercise on the product and overall business. The business plan should corroborate whether the product and overall business has potential. Appoint a savvy external business mentor or adviserTheir role is to ask hard questions, challenge you, objectively evaluate progress against targets set and hold you accountable. This person should not be a close relative or friend.Is entrepreneurship right for you?Creating a start-up is not for everyone. Like any career choice, not everyone is cut out for certain roles. It may not suit your interests, temperament, passion, or skills. The requirements or skillset for an entrepreneur are not specified, yet the skills required to be successful are rarely discussed other than in academic textbooks.Your character and resilience will be severely tested in a start-up, especially in the early stages. Delays, disappointments, criticism, rejection, frustrations, travel, endless presentations, knockbacks and 80-hour weeks with little pay is what a founder is facing. Fundraising is arduous, where it can take six months of meetings, calls, presentations and visits to secure investment. This takes a toll on you mentally and physically, and your ability to face these knocks and challenges while remaining optimistic is difficult. Successful entrepreneurs show some essential personality characteristics such as patience, an ability to listen, learn, accept criticism, and stay positive. They are a people person, and able to get along and deal with all types of individuals. Failure does not defeat them, and they learn from mistakes. They can take things in their stride and are willing to adjust or pivot when required. Successful entrepreneurs possess drive, ambition, and determination.Anyone who might be considering creating a start-up should do some self-examination as part of the planning. They need to ask themselves honestly if they have some or any of the requirements that an entrepreneur needs to have. Ask yourself questions such as:Do I have that entrepreneurial drive and determination?Am I cut out for this?Why do I want to start a business? You should only start a business for the right reasons. Self-indulgence, fulfilling a dream and pleasing someone else are not valid reasons.You fail and you learnThe aim of a start-up is to solve a problem for a customer. The customer comes first. Your starting point is talking to customers, discovering their pain points, and then using that feedback.If you are not getting good market traction, be prepared to pivot and change. If the business is still struggling to get off the ground, be prepared to disengage. This can be a difficult decision but necessary. You can always start again. Remember: you will pass failure on the way to success. A failed start-up is a valuable lesson. You fail, you learn, you start again and you do things better.I believe it is possible to improve start-up survival rates with good planning, the right mindset, and a funding plan. If your product/service is good enough, you will always secure funding. While the risks of failure in a start-up are high, the entrepreneurial spirit will nevertheless always be alive.John Convery FCA is a business adviser to start-ups and small businesses.

2020 has been a year of expected and unexpected change for the pensions industry, but even more change lies ahead, argues Elma Fox.When looking forward to 2020, the pension industry anticipated a year of change and development. We have certainly experienced much change, unfortunately, much of it from unanticipated events. We can learn a lot from our response to these events, which will inform how we deal with future changes and developments.When looking forward, we expected change to arise from the usual sources – legislative changes mainly from the EU, and both domestic and international political developments. Anticipated changes included:The transposition of the IORP II Directive into Irish law;The implementation of the European Union Anti-Money Laundering Beneficial Ownership of Trust Regulations 2019 requirement for a beneficial ownership register for pension trusts;Clarity on the application of the European Union Supplementary Pension Rights (Outgoing Workers) Regulations 2019;European Central Bank Statistical Data Reporting requirements to the Central Bank of Ireland;Guidance on, and increased use of, master trusts;Preparations for the increase in the state pensions age to 67 in January 2021;Further consultation on, and development of, the structure and system for auto-enrolment pensions for roll-out in 2022;The impact of a new government with potentially different pensions objectives, following a general election;The ongoing impact and fallout from Brexit; andPotential market volatility during the US presidential election campaign.These issues have, and will continue to have, an impact on the development and future of the industry. This will be covered in more detail later in this article.Amid this hectic period of change and development for the pensions industry came the global COVID-19 pandemic. The first restrictions and lockdowns in March coincided with a significant drop in investment markets. The pensions industry, along with every other industry, faced challenges and circumstances it hadn’t dealt with before. The immediate impact and response fell mainly into two areas:Providing essential services while facilitating work from home practices across the board. In normal circumstances, such a change in working arrangements would take months of planning and implementation; andEnsuring that benefits continued to be paid and assets kept secure while ensuring contributions could still be paid and invested.Immediate considerationsOnce the immediate actions were taken to ensure that services could be provided from homes around the country, several items had to be considered for the short- to medium-term operation of pension schemes and the provision of benefits. They included:The Pensions Authority’s announcement on 27 March and its subsequent update on 24 April. These announcements covered several topics, such as:o The prioritisation of pension and other benefits payments, and the collection of contributions;o Making immediate investment decisions, which was cautioned against unless necessary;o Dealing with requests to cease or suspend contributions, obligations to pay what has been deducted, checking contracts of employment, scheme rules (and, in some cases, legislative requirements), funding commitments for defined benefit schemes, and interaction with the Temporary Wage Subsidy Scheme (TWSS); ando Obligations on disclosure requirements (annual reports, member benefits statements, communicating changes etc.)The Emergency Measures Act, which didn’t mention pensions. The TWSS payment could not be reduced, so it was assumed pension contributions could not be deducted from it;Business continuity plans for service providers, employers, and pension schemes had been implemented and needed to be reviewed, updated and, in some cases, documented;The ability to hold meetings, both in terms of hardware/software and the power or authority to hold them. Meetings had to be held to deal with the usual cycle of trustee meetings, which covered administration, service, compliance, and investment. COVID-19 response meetings were also necessary;Employers’ and members’ current circumstances in terms of employment, remuneration, and contributions;Notwithstanding the Pensions Authority’s caution against making immediate investment decisions, trustees needed to consider the implications of the fall and subsequent rebound in asset values, the impact on their investment strategy, and the performance of the funds against their benchmarks and expectations. Were changes required? Would the funding of the scheme be affected? Was there a need to communicate with the employer and members? The results of Mason Hayes Curran (MHC) and Irish Institute of Pensions Management (IIPM) survey found that 71% of schemes had not adjusted their investment strategy as a result of the pandemic;The ability to maintain risk benefits for members and employers where employment or contributions are temporarily suspended. Insurance companies were supportive in providing cover in most cases; andThe information to share with members to reassure and assist them and how to issue those communications.COVID-19’s impact on pensionsThere are also longer-term impacts and associated economic and employment effects to consider, arising from the COVID-19 pandemic. They include the effect on valuations of changing and volatile liability and assets values, and the potential for lower contributions (e.g. the suspension of employer and employee contributions, reduced salaries, and/or reduced contribution rates). Other potential impacts include changed membership (e.g. temporary or permanent layoffs, reduced working hours, phased returns to work) or changed employer status, which may impact on the employer covenant, the ability to pay, and on benefits and pension budgets.The general outlook for pensions provisionThe outlook for the pensions industry, taking into account the changes anticipated for 2020 but filtered through a COVID-19 lens, leads to the following conclusions:There will be an increased focus on governance and risk management. The crisis may highlight the strengths and weaknesses of the current system;Timelines for IORP II implementation will be needed, given the number of other challenges in play;The changed economic outlook may impact the planned timelines for auto-enrolment. The results of the MHC/IIPM survey found that 66% of respondents expect the roll-out to be delayed due to the current crisis;Concerning the state pension age, employers and employees need to know what they are planning for. The current Government deferred the planned change from age 66 to 67 pending a report on the issue by a Commission on Pensions, which will be established to examine various issues related to the sustainability of, and eligibility for, the State pension; andIn terms of ECB/EIOPA reporting, one wonders if outputs or feedback will be provided to the Central Bank, when we might expect clarity on EIOPA reporting requirements from the Pensions Authority, and whether the reporting requirements will be coordinated.The effect of 2020’s expected and unexpected changesThe impact of both the expected and unexpected changes on the pensions industry – and the broader political, legal, and economic environment – places enormous demands on those involved in providing pensions to respond and adapt to changed outlooks for schemes, sponsors and members. Professionals should also expect increased governance and compliance standards, increased reporting requirements, and the need for new functions, including internal audit and risk management.The increasing professionalism of trustees to meet these growing requirements and expectations will also be a point of sharp focus, resulting in a need for upskilling, training, and qualifications for new roles and requirements – not to mention knock-on implications for service providers.The pensions industry has proven that it is resilient and capable of adapting to the changes and challenges presented by COVID-19. We must continue to learn, develop and innovate to ensure that we are ready to deal with the immediate and longer-term challenges and can continue to provide stable, reliable, and sustainable pensions for members.Elma Fox is President of the Irish Institute of Pensions Management.

The new auditing standard on estimates will have a significant impact on management as well as auditors. Brian MacSweeney reports.The revisions to ISA (Ireland) 540 (Revised) will have important implications for chief financial officers, financial controllers and management responsible for financial statement preparation and the determination of accounting estimates. Its impact may be felt outside finance functions where others contribute to the calculation of estimates – for example, valuation specialists, taxation teams or pension specialists. It will also give rise to additional considerations for audit committees recommending financial statements for approval.What are the implications?The new standard requires the auditor to perform additional understanding and risk assessment procedures over estimates, along with other new requirements. This means that:more time is needed from management to help the auditor perform these procedures;management will need to articulate their processes and controls around estimates better;there will be more dialogue between auditors, management, and those approving financial statements about the critical aspects of estimates; andthere will be a better and more robust audit approach to auditing accounting estimates in the forthcoming financial reporting cycle.Why was the standard revised?The preparation of financial statements involves many different elements, but the preparation of estimates is perhaps more complex than others. Estimates are monetary amounts (recognised or disclosed), which are a fundamental part of entities’ financial statements. They are subject to estimation uncertainty due to inherent limitations in knowledge or data, and as a result, there may be a wide range of measurement outcomes for any estimate. In forming estimates, management apply methods or models where they make assumptions and use data. They exercise judgement involving complexity and subjectivity when measuring the estimate. Due to the nature of this process, estimation is susceptible to material misstatement, and for the users of financial statements, they are the main focus.Over time, accounting estimates have become more prominent and visible in financial statements, garnering additional scrutiny from readers. This is caused by increasingly complex business environments (now made more complicated due to the COVID-19 pandemic) and the introduction of new accounting standards over the last number of years. The previous version of the ISA 540 standard was written before these changes and they, along with challenging audit inspection findings, meant that a new framework was needed for auditors to robustly audit estimates. In response to these challenges, the Irish Auditing and Accounting Supervisory Authority (IAASA) issued ISA (Ireland) 540 (Revised).What is the aim of the new standard?The new standard aims to:address changes in financial reporting standards and business environments that make estimation more difficult;enhance auditors’ professional scepticism, considering recurring audit inspection findings criticising the quality of audits of accounting estimates; andRealise public interest benefits through better two-way dialogue between the auditor and management concerning estimates.What is new?Enhancements contained in the new standard include:Enhanced risk assessment: the standard requires a robust risk assessment of estimates. The aim is to heighten auditors’ understanding of processes and controls around the identification of estimates and the determination of the related monetary amounts. This risk assessment is performed at a granular level and focuses on the models, assumptions, and data used to determine the estimate. The assessment is made with reference to inherent risk factors, including the complexity of the estimate, its subjectivity, and estimation uncertainty.Scalability of testing approach: the testing approach options in the old ISA 540 are maintained. These include testing management’s calculations of the estimate, developing an independent estimate, or using events after the year-end as audit evidence for the estimate. However, the new standard focuses on aligning the level of procedures performed to the assessed risk. This gives the standard scalability, where the level of audit effort is dictated by the complexity and risk associated with the estimate.Professional scepticism: ISA (Ireland) 540 (Revised) has several provisions designed to enhance the application of professional scepticism. These include:o A requirement to design and perform further audit procedures in a manner that gives more focus to evidence that may be contradictory.o A requirement to evaluate the audit evidence obtained regarding the accounting estimates, including both corroborative and contradictory audit evidence.o Changing the language in the standard to use purposeful words like 'challenge', 'question', and 'reconsider', thus reinforcing the importance of exercising professional scepticism.Disclosures: there are enhanced requirements to assess whether the estimate disclosures are “reasonable”.Communication and representations: there are new requirements to consider when communicating with those charged with governance. There is a requirement to request written representations regarding the reasonableness of methods, significant assumptions, and the data used.What is the impact on management?Table 1 sets out the key changes required by ISA (Ireland) 540 Revised and their impact on auditors and management. This summary was prepared by Chartered Professional Accountants Canada and was adopted by the IAASB (International Auditing and Assurance Standards Board) for its client briefing document dated November 2019.What happens after implementation? The standard-setters intend to undertake a post-implementation review after the effective date of ISA (Ireland) 540 (Revised) to see if the revised standard has achieved its intended objective. They will focus on whether the standard is sufficiently scalable and whether it enhances the exercise of professional scepticism.First impressionsHaving read the new standard and prepared illustrative audit work papers to see it in practice, it is clear that this is a significant change to how auditors will approach the audit of estimates. The key message is that auditors will need to prepare early to perform a detailed understanding and risk assessments procedures. Management will have more to do to help the auditor in their risk assessments, but early communication and engagement between the auditor and management will ensure successful adoption.In addition to the above, due to the COVID-19 pandemic, developing estimates for expected credit losses, going concern analysis, and related disclosures, in particular, is more challenging. A focus on the audit of estimates is therefore paramount. Overall, in a financial reporting environment that is evolving due to changing business environments and accounting frameworks, ISA (Ireland) 540 (Revised) provides audit practitioners with a good basis to audit estimates and to serve the public interest by fostering audit quality.  Brian MacSweeney ACA is a Director at KPMG Ireland.

Brendan O’Hora reports on the findings of the 2020 All-Member Survey.For more than a decade, Chartered Accountants Ireland has surveyed its members every two years to track levels of satisfaction and identify their needs and perspectives. This summer’s survey was markedly different. Reflecting the challenging social and economic circumstances across the island and beyond, this survey focused on members’ experiences of COVID-19 and how members have been coping in their business and personal lives, while also recording views on the Institute’s performance in serving its members.The survey was conducted in June by independent research agency, Coyne Research, and built on other flash surveys undertaken in the wake of the lockdown. All members who had provided an email address to the Institute were invited to participate. Almost 1,900 members completed the survey, a 10% increase on the last survey in 2018. This is much appreciated as this level of participation helps us build a much more accurate picture of member experience.The survey was launched just a month before the publication of the Institute’s new strategy, Strategy24. Many issues of importance that emerged in members’ responses also resonate through our new strategy, reflecting the level of member contribution to the strategy development process.Impact of COVID-19 on membersMembership of Chartered Accountants Ireland means being part of a network of professionals, working in support of each other. Therefore, it is now vitally important that the Institute understands how members have been managing during the COVID-19 crisis so we can respond with new initiatives and services.The survey included several questions assessing the impact of the pandemic on every aspect of members’ lives, and members engaged openly and candidly with these questions.Economic uncertainty is evident in every part of the economy, and it is clear that our members are in no way inured. One in five members expect some changes to their current role because of the pandemic.WellbeingWhen questioned as to the impact of COVID-19 on various aspects of members’ daily lives, 40% responded that it had had a negative effect on their physical health. In contrast, one in three members claimed that the pandemic led to a positive impact on their physical health. More than half of members report that their mental health has been negatively impacted.Around half of all members report that COVID-19 has had a negative impact on their financial security, with members in practice more likely to agree with this statement.CA SupportAwareness of the Institute’s member support service, CA Support, stands at 80% with awareness higher among males and those aged over 40. Of the services provided by CA Support, respondents indicated that they were most interested in accessing support in the areas of mental health and resilience, retirement planning, and financial planning.Impact of COVID-19 on firmsThe survey asked members to compare the financial position of their business or practice before the start of the pandemic with the present day, and the contrast was stark. For members in business, 83% said that their organisations had been either stable or expanding before COVID-19, dropping sharply to 38% post-lockdown. For firms in practice, the contraction was more acute. 93% of members in practice considered their firms to be stable or growing at the start of the year, but 63% changed their description post-COVID-19 to being somewhat impacted or struggling.Over half of all members stated that returning staff safely to work is one of the top three challenges facing their business/organisation over the next 18 months. A higher proportion of members in practice were concerned with liquidity/cashflow (45%) as well as meeting spikes in demand (25%).Economic recoveryMembers were also asked to estimate the length of time before our economies return to 2019/early 2020 levels. The average answer was just under two years, subject to subsequent twists and turns in the public health crisis.Satisfaction with the InstituteLooking at Institute-related results, the standard benchmark questions on satisfaction and relevance were once again included. Satisfaction with membership of Chartered Accountants Ireland remains high and consistent with 2018, and there has been a 4% decrease in those claiming to be dissatisfied. Results were consistent across business and practice, though Republic of Ireland satisfaction levels surpassed their Northern Ireland equivalent.The perceived relevance of membership scored highly, and scores for lower relevance dropped by nearly 10%. More than two in five members said that membership represented good or very good value for money, similar to 2018.In terms of the relevance of communications received from the Institute, encouragingly two in three members described themselves as satisfied. This represents an increase of 24% since 2018, with those dissatisfied with how we communicate down significantly by -14%.Net promoter scoreThe net promoter score (NPS) is a widely recognised measure to assess members’ likelihood to recommend the qualification. This is an exacting metric, and even for brand leaders, NPS sometimes tends towards single-digit results. It was, therefore, encouraging to see the Institute’s NPS increase to +44%, an uptick of 3% since 2018, with over half of members regarded as promoters. NPS ratings from members in business shaded those in practice, while the Republic of Ireland figures slightly exceeded the Northern Ireland equivalent.Members servicesMembers were invited to rate a range of Institute services based on their experience and degree of satisfaction. Accountancy Ireland and our suite of electronic newsletters ranked most highly, but the standout results were for the new suite of webinars and online CPD, developed and launched to satisfy members’ professional training requirements during the lockdown. The new COVID-19 hub on the Institute’s website also received a strong reception from members.The 2020 All-Member Survey points to a profession that is coming to terms with the harshest economic and personal challenges in decades and is already planning for future recovery. Over recent months, teams across the Institute have responded rapidly to member needs with new online professional development platforms, consistently effective and targeted advocacy and representation on behalf of members, and enhanced communications and webinars.Chartered Accountants Ireland is of its members and for its members, so member satisfaction is the most critical measure of our performance. Member satisfaction remains consistent with 2018, and there is also a high level of satisfaction with communications to members. Our recently launched Strategy24 will help us grow these figures even further, with a strong focus on optimising member experience and further strengthening the relevance and reach of the Institute’s voice. While the overall research findings are very positive, specific challenges remain for individual segments of our membership, and these will receive a particular focus. The Leadership Team has begun to address some of the immediate issues, and we will work with the Members Board to bring these insights into the 2021 business plan and our implementation of Strategy24.Brendan O’Hora is Director, Members, at Chartered Accountants Ireland.

Chartered Accountants in practice have had a lot to contend with over the last six months. Here, they share the lessons learned from the challenges faced during the COVID-19 pandemic.Chartered Accountants and their skills have been at the forefront of business during this pandemic, ensuring that businesses across the island of Ireland – including their own – continue to stay afloat. In this feature, three Chartered Accountants describe what challenges they and their clients have faced during the COVID-19 crisis.Members in practice, Conor Woods from Woods & Partners, James Kelliher from Kelliher O’Shea and Wendy Merrigan from Williams Merrigan share their insights on current business challenges, the lessons they have learned during the pandemic and what the future holds for SMEs. Meeting adversity with growthConor Woods FCA, Managing Partner at Woods & Partners, outlines how technology and innovation have enabled him and his staff to keep the business running through the COVID-19 crisis.QHow has your business been impacted by the COVID-19 crisis?Initially, it was a shock to the system for everyone. However, we have invested heavily in our cloud platform over the last five years, so we were able to adapt to remote working relatively seamlessly. The greatest initial challenge was not having a ‘physical' closing meeting with our clients nor being able to have team meetings in the same format we were once familiar with. What is the most challenging aspect of leading a practice in this environment?On-boarding new staff is the most challenging aspect of growing a firm in the present environment. We have hired 12 staff in the last three months and it's challenging to integrate, train and induct them into an organisation where ‘normal office conditions’ do not prevail. The strength of our profession is in the quality of the training that our articled clerks receive in practice, so we must ensure that this training continues to the highest of standards in the current social distancing climate. We have been lucky our size enables us to continue this training which has proven to be a key attraction for high calibre graduates to come to our firm.What business changes have you made to ensure that you continue to deliver for your clients?Due to growth across our practice, we have recently opened new offices in Laois and Cavan to meet client and market needs in these locations. Clients want premium advisory, audit and taxation services close to their businesses without having to travel to Dublin and so we see this as a key opportunity. Additionally, more and more of our staff do not want to commute, so having regional locations helps us with staff retention and attracts a high calibre of staff from the city and larger firms. If you could make one change to the supports available for your clients, what would it be?We would like to see an expansion to the Local Enterprise Office Business Continuity Voucher scheme for another six months for SMEs. This proved to be a hugely supportive and popular scheme for them. What does the future hold for small- and medium-sized accountancy practices, in your opinion?The future is bright and exciting for firms who innovate and continue to re-invest in people and technology. It’s critical that firms maintain financial liquidity and strength to enable them to hire the best and invest in technology within their practices. The firms that have strong technology platforms have found it easier to adjust to the enforced changes in work patterns. I see smaller firms engaging in more collaboration with each other due to increased regulation and, perhaps, more consolidation in this space. As a practice leader, what has been your most important lesson to date?It’s just as important to work on the business as it is to work ‘in the business’. Practices must manage working capital, lock up, and liquidity relentlessly. This is now more important than ever before. This can be difficult as our clients, may want more leniency in terms of credit, support, and time in the present environment, so there is a fine balance to be achieved. Managing client expectations and our own business performance is a pivotal aspect of our own practice strategy.Adapt and be flexibleJames Kelliher FCA, Partner in Kelliher O’Shea, Chartered Accountants, has found that flexibility with staff and clients has been key to navigating business changes that have cropped up because of the pandemic. How has your business been impacted by the COVID-19 crisis?As a small accountancy practice, we offer a wide range of services. We provide bookkeeping services to a number of businesses in the hospitality sector which was impacted severely. We have a diverse client range across many sectors from hospitality, media, motor trade, retail, nursing homes and agriculture who all had various challenges and continue to do so as we work through the crisis. Our workload, in terms of dealing with client queries, increased dramatically, especially around the introduction of the Temporary Wage Subsidy Scheme (TWSS) and other government supports. What is the most challenging aspect of leading a practice in this environment?There has been a level of disruption to both the practice and client business which has had a knock-on effect on the timing and delivery of work. The business disruption will have an impact on filing deadlines being met later in 2020 and this will be an issue for our staff and clients in an already demanding year. What business changes have you made to ensure that you continue to deliver for your clients?Although our office was closed for a period, we were still very much accessible throughout for our clients by phone, email and Zoom/Microsoft Teams. We also facilitated some of our staff with young children to work shorter hours. Our audits have been conducted remotely this year; previously, we would have carried out the fieldwork for our larger clients on-site. We have had to be flexible with our clients and cognisant of the fact that some of their finance personnel were also working shorter hours with an enhanced focus on their short-term cashflow management.If you could make one change to the supports available for your clients, what would it be?For many small businesses, funding during the current crisis has not been easily accessible. While the TWSS and Restart Grant were successful, many small businesses failed to secure additional short- or medium-term facilities from their lending institutions as a result of the uncertainty surrounding the crisis and the impact it was having on current trading levels. We would have liked to have seen a simplified, low-interest government loan or capital grant made available for PPE expenditure, which was significant for many SMEs in reopening. What does the future hold for small- and medium-sized accountancy practices, in your opinion?We believe there will be further consolidation within the industry among small- and medium-sized practices. This trend had started pre-COVID-19. The talent pool for small practices was at an all-time low because of the larger firms attracting the majority of graduates to the cities. Consolidation should enable practices to attract better people and possibly offer a more attractive work-life balance that people crave. Smaller practices need to continue to invest in technology and their people, and use technology to move towards a paperless environment. The current crisis has highlighted how reliant we are on technology.As a practice leader, what has been your most important lesson to date?The ability to adapt and be flexible is key to leading our practice and being able to advise our clients. This has never been more prevalent than in the current COVID-19 climate where guidelines that impacted on both decisions that needed to be made for the practice, as well as advice given to our clients, were evolving on a weekly and sometimes daily basis.Focus on positive actionWendy Merrigan FCA, Co-Founder and Director at Williams Merrigan, has seen the workload in her practice increase in the last six months, but believes opportunities are there for accountants who concentrate on serving clients’ needs.How has your business been impacted by the COVID-19 crisis?We have a small team and the level of queries regarding COVID-19 issues has been overwhelming. This has led to a slower turnaround time for some work which has its own impact as we approach large filing deadlines later this year. While working remotely was used by our practice for several years, COVID-19 meant some staff no longer had childcare facilities and had to home-school children for a period. Ensuring staff did not take on too much work and balanced their homelife with their need to provide ongoing quality, timely service to clients, specifically regarding tax filing return deadlines, was a specific challenge. Right now, it is unknown what will occur during winter months regarding schools and this is stressful for staff. What is the most challenging aspect of leading a practice in this environment?Staying on top of the ‘normal’ workload as well as managing client queries. A serious challenge has been planning and scheduling work while also finding time to keep up-to-date with Government and legislative changes as they arise to ensure clients are kept informed. This increased workload has meant I have had less time as I would like with staff members.What business changes have you made to ensure that you continue to deliver for your clients?Responding to email and telephone queries proved highly challenging. For some queries that arose, it became more practical to share information generally by way of email or, in certain circumstances, on social platforms. This has meant less time repeating answers to queries that many clients have. Sharing knowledge with other accountants and making new connections to discuss the impact of COVID-19 on our profession has been beneficial also.If you could make one change to the supports available for your clients, what would it be?Grants have been made available to review cashflows and financing, yet necessary ongoing compliance costs for accountancy services were not included. I would have granted subsidies to businesses to allow their usual monthly or yearly fee to be included in the grants awarded. Ensuring clients have tax clearance for subsidies and grants mean accountancy services were vital for all businesses yet not provided for.What does the future hold for small- and medium-sized accountancy practices, in your opinion?Regardless of size, I believe we are fortunate to have a qualification whereby our services, expertise and advice are continuously sought and needed. Our practice is small yet, as I mentioned, there are always opportunities to be found when you are laser-focused on serving client’s needs. I believe services will always be sought from proactive accountants with good communication skills.As a practice leader, what has been your most important lesson to date?I've realised uncertainty can be positive and have learned to let go of the need for control. Inspiration and creativity come from not being rigid in views or practices. It's important to move with the times and learn to embrace new working environments and social networking platforms to serve client needs efficiently. Above all, the most important lesson has been the realisation that uncertainty is neutral; we can continue to focus on positive action.