Accounting Advice

Does size matter when choosing a small business accountant?

07 Oct 2015

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.  

Small business dominance 

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.  

Does size matter? 

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.
  

Choose an accountant who can help you grow

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.
  

Keir Wright-Whyte

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Managing Director

0207 043 4000

About the author

Originally graduating with a degree in geography from Edinburgh University, Keir claims that he was then tricked into becoming an accountant by one of the UK's top 5 accountancy practices.The deception extended to the usual training in audit and associated activities.

Keir subsequently worked in a number of advisory roles with clients including in the energy trading, pharmaceuticals and financial services sectors.

He loves working at Accounts & Legal because of the variety of work and clients, the excellent team ethos and morale, the importance placed on genuinely helping and being useful for clients and because he believes what he does matters to clients and helps the firm.

Keir's primary role is to ensure that new clients with complex businesses or needs are on-boarded in the best way and he is a "trouble shooter" both for clients and where complex issues arise internally. He also helps the accounting teams strive to improve what we do for clients, whether processes or services.

When not debiting or crediting, Keir has a penchant for fixing old buildings, skiing, surfing and cycling.

  

We can help you grasp opportunities

 

If you’re setting up or running a business, we are full-service accountants offering tax and accounting support from bookkeeping to business plans, payroll to business strategy, growth, exit planning and general business advice.

 

Call our London or Brighton office today or get an instant quote for our services!

 

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