The UK accountancy landscape it changing. Research by SJD Accountancy in May 2015 found that the total number of accountancy businesses in the UK has risen by a massive 15.5 percent since 2008. This means there are thousands of new competing accountants looking to make their firm a big success. And competition is coming from all corners – from consultants, professional services firms, other accountants, and even the internet.
As the industry changes, so do the rules of competition. Firms of all sizes are being affected by the changing technology. Earlier this year, KPMG changed the game by investing £40 million in its Enterprise programme that delivers tax and accounting services via a cloud platform to SMEs. A huge investment like this signals a change in tactics, and an aggressive entry by a Big Firm to enter an SME market which, in the past, had been a stronghold of high-street accountants and mid-tier accountancy firms.
And the only way to stay competitive is to evolve, adapt and keep up with the changing business model. But it is one thing to say that your firm needs to adapt and evolve and quite another to find out how best to do it. In this article, we’ll look at how outsourcing can actually be a strategic partnership instead of a one-off deal.
Research by ICAEW found that businesses today are looking for more than compliance support from their accountants. They want an accountant who understands their business and provides them with regular proactive advice in the fields of life-wealth management, financial services and corporate finance. Even though compliance services are important and help to keep the practice running, getting caught up with these tasks can get in the way moving the practice forward and being able to respond to client requirements. The modern accountant understands that at this stage having strategic partners is key to growth of the firm. Getting into a partnership with an outsourcing provider often allows accountants to offer services like bookkeeping and payroll to their clients which were earlier not undertaken due to the low-margin levels.
This step-up is incredibly powerful as offering more services not only opens up a new revenue chain but also leads to a deeper engagement with clients. Plus accountants now get the time they need to move toward an on-going advisory model.
As discussed earlier in this article, competition is increasingly tough and firms these days are often found competing on price instead of quality. And with bigger firms like KPMG moving into the SME market for better collaboration with clients, it’s important to lift your capabilities and scale up.
However, capital-constrained firms can’t scale up because of the lack of infrastructure, skills or access to technology. One practical way of thinking about this problem is through innovation; but scaling up requires access to skills and technology. And when you’re limited by your own resources, working in partnership with a company which can provide these missing elements might be one true solution to this problem. Adaptation should be the goal here.
In its Tomorrow Practice initiative, ICAEW president Arthur Bailey asked firms to evolve and innovate if they were to survive the competition.
As a practice owner, imagine if you could get access to technology and best practices at more reasonable prices than the bigger firms who are sitting on expensive overheads. Imagine if you could get time to focus on lucrative niche markets you want to work in.
And looking at an experienced outsourcing firm to partner with is an instant route to the skills, technology and additional services you need to move your firm forward and to drive business growth. Many UK firms are already reaping the rewards of the additional services they can offer their clients, the advanced software they can now access and the extra pairs of hands which enable them to take on new business. Innovation also means the introduction of something new, not necessarily something new in itself. Looking at the introduction of outsourcing to your firm is an innovative way of solving the problem you are faced with and one which may just work for you.
My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.