UK Accounting and Bookkeeping firms see a slowing of growth in challenging circumstances across the profession.
Based upon the latest FRC Key Facts and Trends in the Accounting Profession report, total fee income for the Big Four firms grew by 11% in the last year, which was slightly lower than the 11.9% growth seen in the prior year.
Outside of the Big Four, total fee income increased by 13.2% compared to an 18.5% increase in the prior year.
Despite growth being higher outside of the Big Four, the slowing of growth is a concern for many firms, with a longstanding of set of four challenges that continue to plague the profession:
- Global economic impacts (from supply chain issues, rising interest rates and inflationary pressures, depressed capital markets, wars and conflicts etc) are driving increased demand for accounting services, which is increasing the cost of labour as well as benefits; According to Reed’s UK salary guide 2024, workers’ top-three desired benefits are: an annual salary increment (45%), a four-day working week (36%), and flexi time (36%).
- Talent and skills shortage doesn’t look to ease anytime soon as the pipeline of new talent into the profession has declined year on year; FRC state a 0.2% reduction in the number of UK and ROI students compared to last year, compounded by a 5% reduction in the number of worldwide students who became members in the last year (which is a steeper decline than the 0.8% in the prior year)
- Clients expectations continue to grow, not just in variety of requests, but in speed of response; In KeyPay’s State of the Accounting Report (2022), 82% of respondents agreed that clients’ expectations have significantly increased in the last 2 years and 60% agreeing clients want faster response times.
- Technology evolution is forcing firms to evolve their technology adoption and mindsets faster than ever; This is also being driven by 56% of respondents to KeyPay’s State of the Accounting Report (2022) stating their clients have increased desire for support and advice surrounding technology.
To understand how other firms are continuing to grow despite these challenges, take part in The Cox Report (the annual benchmarking and data publication on the performance of UK accounting firms) from ProTRENDS to get your complimentary copy of this inaugural benchmarking report: https://bit.ly/cox-report-survey
