There is an ongoing consolidation of small accounting firms in the industry with a net-loss of just under 500 firms between 2017-19 according to Float, a cash flow forecasting company. The number of firms with less than £100k turnover decreased to 19,890 from 21,020 during this time, whereas the number of firms with more than £100k turnover actually increased to 15,630 from 14,985.
The net-loss will no doubt surpass the 500 mark once the full Covid-19 impact is felt and even profitable firms will still feel the pressure to either sell up or merge with another firm to have a greater fallback buffer and economies of scale benefits.
Clients have been more reliant on accountants than ever during the pandemic as the accounting industry keeps on top of the various government support schemes on offer, as well as helping clients with business-critical activities, such as cash flow management, during these difficult times.
Bookkeeping services appear to continue to be on the rise however, with the enhancements of cloud technology allowing bookkeepers to scale up their business more than ever before. This may well be an area accounting firms move towards, but hopefully for the accounting industries customers there will remain a substantial number of small accounting firms in play. It’s not only important for the customers to have a choice of supplier, but it’s also often the small accounting firms who are able to spend more time with clients and maintain a more personal service, bringing more value-add.
Sources:
Comments