We recently spent some time analysing some data from Companies House, which showed that there are a little over 30,000 firms of accountants operating in England alone.
It’s well known that the big 4 accounting firms exist to serve the audit needs of the country’s largest businesses. According to Accountancy Age, their fees total an eye-watering £9 billion with their partners bringing in an average of £3 million of revenue each.
But, these firms and their clients aren’t remotely representative of the accountancy sector as a whole.
According to the Federation of Small Businesses, 99.3% of all private sector businesses are in fact small businesses, and as you might expect, the vast majority of accounting firms fall into the SME category too.
In fact, our analysis shows that the average firm of accountants in the UK has only 75 active small business clients. Allowing for some personal taxation work, that probably means most accounting firms are turning over less than £200,000.00 with 4 or 5 members of staff.
With nearly 6,000 firms of accountants in London, there are certainly plenty to choose from.
So the question for small business owners is whether the size of the accounting firm they choose makes any difference at all.
Our advice to small business owners looking for a new accountant would be to make sure that the accounting firm that that you appoint has the ability to grow with you and provide you with the support that you need.
We often find that small business owners are particularly price conscious when they are looking for are firm of accountants. It is true that preparing statutory accounts is somewhat commoditised, but it usually isn’t long before businesses need help with financial forecasting, writing a business plan and raising external investment. And not all accounting firms are well placed to help with anything other than basic accounting compliance.
So we’d suggest that the best metric for selecting an accounting firm is not size or even price, it is really much more about the value that they are able to deliver by helping you maximise your rate of growth. Incidentally, we are not as expensive as you might think – get an Instant Quote to find out exactly what we would charge.
Accounts and Legal was set up to look beyond the balance sheet and actively help small businesses grow utilising the benefits of online accounting software wherever possible. We have dedicated Business Consultants who are on hand to help you interpret your numbers, benchmark your performance against competitors and optimise your commercial performance.
If you are thinking about starting your entrepreneurial journey or switching accountants, please don't hesitate to drop us a line.