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Accountants and bookkeepers face possible 30% drop in revenue

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17th Nov 2008
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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.

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By AnonymousUser
01st Dec 2008 20:12

Not all bad news
Losing some work maybe a good thing, providing is the wrong work for the right reason.

Giving clients a price freeze or even a fee reduction can significantly improve profits, if it’s part of a practice strategy to more effectively manage resources, improve operational performance, recovery rates and cashflow. Remember, the phrase turnover for vanity, profit for sanity, cash is the reality.

In 2005 when the Sage ABC survey was published, it reported that 21% of businesses said they we’re going to review their relationship with their accountant over the next twelve months. This means negotiating a lower price or moving to another firm and in the current climate perhaps more clients are interested in reviewing their options. If this is the case then now’s a great time to launch an accountancy or bookkeeping business.

Our experience indicates this is the case because we're currently assisting some start-up accountants and bookkeepers with their strategy, operations and marketing. If you get the proposition right and develop effective sales and marketing systems you’ll have no problem winning profitable work way from over-priced, complacent service providers.

If you think you maybe an over-priced complement firm then develop a strategic plan quickly and implement with passion. The Credit Crunch, and the following recession, is going to be the catalyst for THE change that so many have been predicting for so long. The ICEAW report Profitable and Sustainable Practice maybe the key to help you.

Remember, the key to any strategy is getting the operational process streamlined; otherwise you’re not going to be able to turn a good profit at the market price. Without a good profit you’re likely to be weak and venerable both in terms of customer service and investment in marketing.

If you are struggling with January and writing off time then you’re probably not wowing clients with your customer service. Things like reviewing all your client’s current year profits and looking for ways to reduce tax payments and maximise Tax Credit Claims could be one idea.

Our whitepaper “Connecting for Profit” is available which explains how to develop and implement a technology lead practice strategy.

Bob
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