Massive growth in accountant practices
IRIS Software Group have reported on the UK practising accountant population:
4 mega firms employing over 1m UK & worldwide
50 National firms each employing 200+
400 Regional firms each employing 75+
3,000 other large firms each employing 20+
13,000 mid-size firms each employing 10+
25,000 small practices each employing up 3-5
30,000 micro-practices each employing 1-2
That means (discounting the Big 4 who service the top 7000 businesses):
72,000 practices with 300,000 accountants servicing 6m small / medium businesses
Average practice servicing 83 businesses
Average practice accountant servicing 20 clients
ICAEW stats suggest that small / medium firms pay their accountant an average of £1200 pa, so:
Average practice revenue £100,000
Average revenue per accountant £24,000
And given that not every business retains qualified accountants the real position is below that.
The consequences include:
Not enough revenue in the mass market
Many unviable practices
Heavy price competition
Is there redemption?
Well just one thought:
According to DBEIS small business longitudinal research:
The average micro business (1-9 employees) spends £2000+ pa on general business advice - around double the accountancy market
Which is provided by an unqualified cohort of unregulated consultants
This is a market that accountants could legitimately take by expanding their services to clients they already know and who trust them.