Sole practitioners: Where do we go from here?

Does anyone have the stats on this?  My recollection from a seminar a couple of years ago was something like; approx 20,000 independent accountancy practices in the UK, with 90% of those being either sole practitioners or 2 partner firms.  If this is correct, and Ron is correct that most practitioners are now in their 50's, then there are some fundamental structural issues facing the profession.

I believe that the key differentiator for accountancy practices in the future is going to be the effective use of technology, to drive down overheads in an increasingly competitive market and provide a platform for the provision of exceptional customer service, which the new generation of businessmen and women will see as a given.  Now, I don't want to generalise, but maybe sole practitioner accountants in their 50's might not, as a group, be the most imaginative and enthusiastic adopters of new technology and working practices.  But, crucially, they are the best qualified and experienced professionals to provide the personal service and "tlc" that business owners love.

An accountancy practice with amazing IT and systems cannot prosper without enough experienced accountants to deliver the "face time" and hand-holding.  Conversely, a typical sole practitioner is likely to be unable to make a decent living in the future (I would argue now) unless he or she can up their game massively on the technology front.  Interesting times ahead methinks..

Adrian Pearson
Top Accountants

I think you are very correct.  There are a large number of sole practioners who have yet to even start embracing technology.  THe next generation of Accountants will be sales orientated and not 'just doing the books'.  But where are they going to come from?

The stats I saw suggested that the ave age of an accountant is 55, IFAs it is 59.   New recruits to the profession are heading for industry because being a sole practioner is about running a business and assisting others in doing so.  Chasing unpaid bills is not a glamorous side. nor are the tight deadlines.

It will be interesting times and I wonder how many small practices will merge or be bought out as the principals approach retiremen?

Far from looking to retire, I am in my fifties and have just set out on my own having worked for larger practices and last year was made redundant. I embrace new technology and can't be the only one who finds these exciting and challenging times (yes - really!). A very dangerous game to generalise so. Many sole practitioners I know who are in their sixties and even older are happy to keep a few clients ticking over and let their lists dwindle through natural wastage. There is a danger here of course that they will not have the incentive to keep up to date with either technology or accounting and auditing standards.-- JS1

I agree with Joan. I too am in my fifties but I worked from home for 19 years. Then 4 years ago in my village a new small business park for office professionals was created. I leased one, moved in and never looked back. A total of 23 years and going strong. Retirement? No chance although I will scale down when I get older. I love working for myself. I may not get rich but that's not what its all about. Helping individuals and small businesses and reaping job satisfaction are just as important.

I embrace technology. Next to the rent, etc, software licences are the biggest expense but a necessary one. I was filing tax returns using the electronic lodgement service for years before internet filing came in. Now everything is submitted online.  When my computer system has problems I fix it. When my clients have problems I fix them. Every day is a different challenge. What about the future? Bring it on.

Stephen Quay

www.s-q-a.co.uk

The ability do do numbers of a packet of fags shouldn't be underestimated! When the digits let us down, it may be the way of the future! The issue here is demographics.

The problem is twofold; a lot of youngsters beleive the received wisdom about getting a degree and a small cog job in a big firm of accountants, with the opportunity to travel to exciting places to do boring audit work for years on end.

The real world of an apprenticeship with a small firm dealing with microbusinesses somehow seems too much like hard work in an age obsessed with meeja whores and fantasy existences. No-one young wants to do beancounting any more.

I'm mid-forties and was almost the last generation to come up the old-fashioned way. I'm not sure that there are enough immigrant accountants to fill the role when the modal age group retires. Outsourcing the whole thing to India isn't really practicable either, in spite of the hype.

Probably a good job that HMRC is trying desperately to stamp out self-employment and any remaining enterprise left in the UK!

Must be the first time in my life that a bit of me fits a statistic, ie I’m a 55 year old sole practitioner, wondering where all the 30 year starters are who will want to take over my practice, in a couple of years (or weeks).

I started on my own in 81, had 6 years as a SP, then went through a number of partnerships and returned to SP (with a thud) 4 years ago.

What doesn’t ring true for me however is any long lasting or substantial improvement in my “lot” through the effective use of ICT. I was programming TBs on my Sinclair ZX81, in 81, and by 84 had spent £8K on 2 PCs. 98% of everything in, around & out the office is electronic, with me & my colleague logging in remotely to work from home or clients’ and I spend a great deal of money every year on full Iris and CCH online facilities.

Yes, I and a couple of colleagues now turnaround the same work that 5-6 would have done 15 years ago however, with the increase in regulation and the need (desire) to turn out a broader and better quality service than I did 15 years ago, I’m not sure I feel that life is any better and I am most definitely worse off financially.

In the past, I’d come back from 2 weeks away to a ton of post & 40 phone messages, last month I returned to 5 pieces of post, 2 phone messages and 275 emails. A perfect analogy I heard on the radio yesterday is that 150 years ago the average traffic speed through London was 10 mph, exactly the same as it is today.

Where I think I agree with others is that in losing SPs like me clients will lose a wealth of experience (especially the mistakes) that I have seen and done and comes wrapped up in one body.

Having said all that, times move on, and with ICT and the net, clients are now able to access far more detailed info without any input from me, ie with a bit of guidance and the HMRC & Businesslink websites, they could pretty much do everything for themselves.

Finally, I have always believed that there is more to life than accounts & tax returns, and I have loads of things I can't wait to do that will make a difference.