Author: Heather Townsend, founder of The Accountants’ Growth Club and author of The Accountants’ Millionaires’ Club
You know that feeling when everything is ticking along nicely in your practice. Your accounting firm feels stable, clients are happy, the team seems settled, the bank account looks healthy, and you finally start to feel like you can catch a breath again.
And then, out of nowhere, life hits you. And suddenly again, you have an accounting firm crisis.
It might be a personal loss that takes you completely out of the business. It might be a business partner passing away and suddenly leaving a financial and operational hole. It might be a bad debt so big it fills you with dread. One member, who runs a £600k practice, told us about a £135,000 debt that forced them to remortgage their home, not just once, but multiple times, just to survive. Another with ten years of experience and growing nicely watched 80% of their business disappear in twelve months after the credit crunch.
Yes, these crises in your accounting firm are brutal. But, they are also more common than you think.
Data from the Insolvency Service, for England and Wales, show a 23,872 registered company insolvencies in 2024. This is a slight decrease from the previous year but remains at a historically high level. In other words, trading conditions are tough, and you can’t rely on your clients to carry on trading.
How to protect your Accounting firm
The truth is, you cannot stop life from throwing curveballs. Particularly when you are growing your accounting firm. But you can do more to deal with the crisis in your accounting firm to make sure they don’t take down your whole business. This is why risk management for accounting firms is key to your personal happiness and success.
This article, based on a topic from our monthly members’ mornings, reflects on why it’s so easy to feel out of control when your accounting firm is growing. And why do crises keep cropping up in your accounting firm at inconvenient times. And, most importantly, what you can do to prevent these crises.
Why is it so easy to feel out of control with a growing accountancy business?
On the surface, growth in your accounting firm looks like success; more clients, more revenue; more people on the team. But talk to growing accounting firm owners and you quickly see a different picture. Many small accounting firm owners say that as they grow, managing their business risks becomes harder.
Here is why.
Just looking at the short term
It is natural to focus on the urgent; client deadlines, tax season, a staff issue, chasing payments. But when you’re up to your eyes in the brown stuff, you lose sight of the bigger picture. I.e you step back from leading and managing your small accounting firm.
One Accountants’ Growth Club member, who rans a practice up in the North West of the UK, put it perfectly:
“I keep losing focus on macro matters as the micro takes over.”
The day-to-day keeps shouting for attention. As a result, the ‘working on the business stuff’, the things that will protect your accounting business from crises, as it grows, get pushed aside.
In order to take your accounting firm to the next level you will find that leading and managing yourself and your business becomes a non-negotiable. That means regularly checking the horizon for the medium and long term. Do you need to make changes now in order to avoid a crisis in your accounting firm in the future?
The reality is that you are very unlikely to have a time management problem. Rather a focus management problem. Which is why the first thing we check for in our Growth Assessment is ‘self leadership’. After all, the first person you have to lead in this journey to grow is YOU. This means being in control of your time, taking responsibility for what happens in your practice. To find out how you would score on the Self Leadership indicator, take our free Growth Assessment. You’ll get a personalised report to see exactly where you need to focus your efforts to grow and scale your firm.
Long hours, high stress, no headspace
So many accounting firm owners still try to power through with long days and late nights. The thinking is, if I just keep going, I will catch up. In reality, exhaustion makes you less effective and far more likely to miss the warning signs of trouble ahead.
As one member, with a 2 director practice from the North East, admitted:
“I’m still doing too much myself.” And “I find myself being drawn into what needs to be done now.”
That firefighting habit leaves no energy for the work that would actually prevent a crisis in your accountancy firm.
No real growth plan
It is one thing to say you want to grow. It is another to plan how you will handle the extra workload, systems, and leadership challenges that growth brings. Without a roadmap, or somebody holding you accountable, growth just amplifies the risks you already have.
Without a clear business continuity or crisis plan for your accounting firm, even small setbacks can escalate fast.
When we speak with many accounting firm owners they kid themselves that they have a Growth Plan. But all too often this is at best a ‘wish list’. After all, if you are not looking at your plan every week or month and this is driving the actions of you and your team, then it’s not a plan. But you are in good company, a February 2024 report from the Marketing Centre found that 54% of UK SMEs do not have a documented Business Plan.
Let’s be honest, there are now too many moving parts to keep your Growth Plan up in your head. This is why it is all too easy to slip into another crisis in your accounting firm. When you have the following plans (Growth plan, marketing plan, resourcing/capacity plan and operational plan) you will be able to take the right decisions at the right time to keep your practice growing. As well as prevent the next crisis from happening. To find out how you would score on the Plan indicator, take our free Growth Assessment. You’ll get a personalised report to see exactly where you need to focus your efforts to grow and scale your firm.
Hiring too late
This one comes up again and again. You wait until you are drowning before you recruit. By then, you are already behind. Onboarding gets rushed, mistakes creep in, the strain increases, and before you know it your team has clocked out.
Did you know that members of The Accountants’ Growth Club have access to our in-house recruiter ‘The Accountants’ Recruiter’ and get a 20% reduction on their normal rates. And get to pay for the new team member in 12 equal monthly installments.
Not realising your role has changed
This is one of the hardest shifts to make. As your accounting firm grows, you cannot stay involved in everything. But letting go and trusting your team to handle it is easier said than done. This is why one of the key indicators in our Growth Assessment is to look at your ‘Business Model: Changing Your Role And Mindset’. Click here to get your personalised Growth Assessment and report.
Members were very open about the challenges of their role changing as their firm grows:
“For me I want to be involved in everything, so that’s an issue when growing.”
In fact Paul Donno, owner of 1accounts, talks about in his Growth Story how his role needed to change in order to break through the £300k revenue ceiling. Many accountancy practice owners also admit to feeling like, because they’ve made the initial connection with the new clients, they then need to do everything for them to begin with.
It is a common trap. You try to stay across everything, but instead you end up being a bottleneck.
Growth brings more complexity
And then there is the simple fact that with more clients and a bigger team, the complexity multiplies.
More clients equals more chances for mistakes, therefore growth can mean more problems dragging your time away from the good stuff. It can also mean more likelihood of a crisis happening in your accounting firm.
A member admitted:
“You lose visibility of workflow when you’re managing a growing team.”
Unless you adjust your systems and your leadership style, it soon feels like the firm is running you, not the other way round.
Crisis management for small accounting firms is on-going
We tend to think of a crisis in our accounting business as a freak event. But most of the time, it stems from small weaknesses that build up over months or even years. Effective contingency planning helps identify and strengthen these weak spots before they’re exposed and go on to trigger a crisis in your accounting firm.
The most common triggers for crises we see are:
- Being too reliant on one or two large clients. When one leaves, it can throw the whole business into chaos.
- Letting backlogs build quietly until they are unmanageable. (This can often because workflows are not optimised. We check for this in our FREE growth assessment)
- Having no plan for illness, bereavement, or a sudden absence.
- Over-trusting the team without the right checks in place. As one member put it: “I trust that the team will do what’s needed, but I don’t always check.”
- Burning yourself out to the point where you miss the warning signs.
Crises happen in accounting firms (and most small businesses) regularly because owners are constantly caught in the urgent. Strategic risk management feels like a nice-to-have. But when you keep pushing it down the list, you leave yourself exposed.
What are the preventative things you can do to protect your accounting firm from the next major crisis?
When we asked members what they wish they had put in place sooner, the answers were strikingly similar and fairly simple to implement. They all came down to discipline, systems, and foresight.
Crisis management for accounting firms, AKA Contingency planning
Let’s start with contingency planning. This is one of the cornerstones of business resilience and risk management for accounting firms. How to protect your accounting firm starts with thinking about what could go wrong?
Few firms stop to ask, what happens if I get sick, lose a key client, or my systems go down? It’s often the case for contracts and agreements too. What’s needed is clear terms with clients, employees, and suppliers, and especially partnership agreements, to provide the protection you need when the unexpected happens.
Clarity over roles, compliance paperwork, and processes might not feel urgent, but without them cracks start to show. Exit planning and capacity planning fall into the same trap. Leaders often delay, yet both are essential for keeping a firm stable as it grows. Recruiting six to twelve months ahead, rather than in crisis mode, is a simple example of how foresight can pay off.
Every day routines
Then there are the everyday practices that make or break an accounting firm: staying on top of backlogs, diversifying your client base, keeping credit control tight, and setting regular touchpoints with your team. As one member told us: “Managing competing priorities makes it easy to be sidetracked onto interesting issues. Regular reviews keep me focused.”
Technology helps too. A good practice management system gives you a single source of truth for workflow and deadlines. These systems are a key part of building business resilience and preventing operational crises. But at the heart of all this is you. If you do not look after your own health and resilience, everything else eventually wobbles and burnout creeps in.
Practical steps to get back in control of your growing accountancy firm
If you are reading this and thinking, “I’ve been winging it,” you are not alone. Every accounting firm owner has blind spots. The good news is, it’s never too late to start strengthening things.
Here are five simple steps you can take right now:
- Audit your risks. Write down the top five things that would hurt your accountancy business if they happened tomorrow. Do you have a plan for each?
- Strengthen your contracts. Review client, staff, director/shareholder agreements, and supplier agreements. Are they watertight?
- Check your capacity. Look six months ahead. Will you need more people or better systems? Start planning now. That means having a Growth Plan! The first thing you will do as a club member is put together a Growth Plan to give you clarity on what are your priorities and stop feeling overwhelmed.
- Schedule reviews. Block out regular time in your diary to look at workflow, pipeline of new business, finances, and risks with your team.
- Invest in yourself. Sleep, exercise, and rest are key to help you cope with the ever increasing levels of pressure that come with being the owner of a growing accounting firm.
Building resilience before you need it
The stories from the Accountants’ Growth Club members were sobering. Losing a business partner suddenly. Carrying six-figure bad debts that resulted in their house being remortgaged. Watching most of your business disappear after a crash. These are not theoretical examples. They happened. And these are not all of the massive crises that our members admitted to experiencing.
And yet, those members are still here. Still running their own accountancy firm after experiencing a major crisis. They adapted. They rebuilt and they carried on.
The lesson is not that crises are inevitable. It is that strong crisis management and business continuity planning can make your firm more resilient. And who doesn’t like to have a story to tell when you’re out the other side?
You can avoid many bad situations by putting the right systems, contracts, and planning in place. And for the ones that are simply unavoidable, you can build the strength and structure to weather them.
So take this as your not-so-gentle nudge. Do not wait until you are in survival mode. Protect your accounting firm now. Build resilience before you need it. Because life will knock you sideways at some point. The question is, will your accountancy firm be ready to stand strong?
Your next step to protect your accounting firm
With so much on your plate right now, where do you start? After all, if you had the time to work ON the business you’d be building the resilience in your accounting firm to stop the crises from happening.
A good next step is to complete our FREE Growth Assessment. You’ll walk away with a personalised report showing you where your priority needs to be with your accounting firm and its growth.