Accountancy and book-keeping providers could face up to a 30% fall in sales next year, according to research by industry analysts Plimsoll. Yet for many firms this could actually be a good thing, according to the report. If operating costs are brought down and debts reduced, the return to a solid financial footing would boost margins for the future.

Contrary to its popular image as an enterprise that requires little capital investment, Plimsoll found that just under 50% of businesses in the accounting and bookkeeping sector are carrying some form of debt, some of which is eroding profitability.

“Companies need to act now, if they are going to weather this storm,” said Plimsoll senior analyst David Pattison, who saw first-hand how accountancy and book-keeping firms fared in the last recession. “As unpopular as job losses and cost reducing is, businesses will have little choice. What we have been able to show in our work is that failure is avoidable, as long as the necessary changes are implemented without delay.”

At the same time, those firms who are cash rich will be in an excellent position to achieve aggressive expansion, Plimsoll suggests.

Plimsoll’s Recession Edition Report looked at 300 accountancy and bookkeeping businesses and found that several could see staff numbers reduce by 40%, with up to 1,200 lay-offs nationwide.