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Its surprising but true. The prosperity of the auditors/ accountants is proportionate to the prosperity of the clients mainly in the case of the small practioners. The work will be more in the adverse situations but the remuneration will not be proportionate, as the clients plead inability to pay correspondingly.
Its surprising because in the case of big practioners, there should be spill over opportunities to other small practioners due to the competition and then conflicts of interests in the case of consultancy assignments. However, its not happening that way for whatever be the reasons.
Re: Keynote Accountancy Report
This is completely in line with the research that we at The Corporate Finance Network have conducted on our member firms’ fees. We found that general practice compliance fees have decreased by 4% on average, but 3% across the firm, because their corporate finance fees tempered the effect, with an average increase of 26% across the network.
We have had some very impressive results from our firms this year. One £1.5m turnover firm which was already billing in six figures for corporate finance work in 2008/9, has now more than doubled those fees this year. The firms that want to do more corporate finance work are finding our tools extremely beneficial, as they are unique and not available anywhere else in the market. The more savvy accountancy firms are realising that in order to diversify away from compliance work, not only do you need the right approach, but you need to have the support and access to centralised resources that make that it viable to offer these services effectively. I'm not sure that there's anything equivalent for Forensic Accountancy, so it's not an area I think many small/medium sized practices will be able to offer.
Old Practitioners
Not a problem where I am. It seems there is a glut of people wanting to buy accountancy firms and no one selling... The agents hardly ever have anything for sale and when they do theres a queue of people buying. Dont see this as an issue myself.
If you put the same in you will get the same out.....
(or something like that).....many accountancy firms have not changed the way they do things to take account of the 'recession', they are doing the same things they did before...only that as clients go out of business, or reduce in size so it follows the fees go down. They don't deal with as many company purchases/sales, companies who were above the audit threshold fall below, employee numbers in clients fall and so payroll fees fall, businesses go out of business and as businesses reduce in size so does the fee. So whats new!? I would guess this happened in the last recession?! (and the one before that!?).....
Doing a little SWOT analysis may unearth some little gems (how many small businesses will be starting in the next 1-2 years)....
Aren't we here to provide business advice (to help our clients survive and prosper in these times) as well as the more traditional work.....
We can only benefit from the recession if we make it our friend....if firms don't change the way they do things its not surprising we see these type of figures. Some firms will be benefiting, but only those who have identified what the clients require and have followed this by making th apprpriate changes.
Conflict of interest should give more work to smaller accounting
One reason is that conflicts of interest does not interest the big players. They don't care. Seen a number of instances of this.
Easy pickings
I see it the other way, there is more opportunity than ever before.
There is no doubt that the economic climate provides a unique opportunity for firms with ambition because the market is disturbed and business owners are looking for better value. Firms can connect with clients on the pain caused by the recession. They can educate the market on why their proposition is better and win new and better business.
The weakness is established firms is their inability to agree and implement a strategic plan. New, young and small firms can take advantage of this.
The questions are:
How many ambitious firms are there?How quickly can they mobilise and implement?How much do can they take on?
Too many firms are going through the motion with too many clients and I wish the proactive, ambitious firms well. They and the UK businesses deserve each other.
Bob Harper
I don't always agree with you Bob...
but on this occasion I do....its the firms who are unwilling to change that struggle....those with ambition and a willingness to accomodate the changing requirements of the client or indeed the services they offer the client will win in this environment....so small businesses able to apply such changes quickly are well positioned...
One other thing....who is it that assumed that accountants would benefit in the current climate anyway....?!? what basis have these people come to that conclusion......