Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Mid-size practices face closure crisis

by
27th Feb 2007
Save content
Have you found this content useful? Use the button above to save it to your profile.

Staff retention problems, partner succession issues and burdensome regulation is threatening mid-size accountancy firms with almost three quarters fearing for the future, new research warns.

The study by practice management experts KATO Consultancy said 72% of independent firms were worried about their continued existence. Staff retention difficulties was the most popular issue cited by respondents, while many said they were struggling to attract appropriately skilled potential partners for their practice.

Increased red tape and the heightened risk of litigation was also a major bugbear.

Phil Shohet, KATO sirector, said: “Even though our experience shows that many firms are struggling with the change process, these results make very unexpected reading.

“Although some firms have obviously accepted the need for change in order to adapt to the needs of the modern marketplace and are managing the process extremely well, the majority are floundering around, knowing they are facing a crisis but unable to avert it.

“There is little doubt that many of the firms responding to this survey will no longer exist in five years' time. This is not only bad for the profession, it is bad for the clients as it reduces their choice and, inevitably in a shrinking market, means that they might have to pay more for services.”

Tags:

Replies (3)

Please login or register to join the discussion.

avatar
By User deleted
01st Mar 2007 13:58

A recent example
A Midlands based firm of Chartered Accountants (with more than 5 offices) has just lost a friend of mine as a client.

The firm of accountants at first sight and to my prior impressions was regarded by me as highly reputable and highly professional.

How far from the experience that my friend sufferred with his business !

To read more :-

http://tinyurl.com/yqt457

I would like to think the trend for the benefit of small businesses is for such a 7 or 8 office under-performing firm to become 7 or 8 individual firms more focussed on local business needs.

The downside of having 7 or 8 individual firms (each having one office) is potentially a lack of specialist knowledge within in the individual firms, but surely this could be overcome by mutual co-operation between individual firms or the smaller one-office firms subscriping to a helpline / accountants technical support group.

Thanks (0)
Dennis Howlett
By dahowlett
07th Mar 2007 13:38

predictions
Interesting prediction but to assert: "There is little doubt that many of the firms responding to this survey will no longer exist" is gratuitious sensation seeking.

Thanks (0)
avatar
By AnonymousUser
09th Mar 2007 22:56

Get off your backsides
Having worked for a six office firm as a manager, the sooner that partners get back to working for their living and actually trying to prepare accounts , getting stuck in to proper tax advice, and stop inflating time sheets for themselves and their staff, the better. Forget all the fancy hyperbole and marketing spin, there is a place for us all if we are prepared to offer value for money services and stop accepting that the donkey work done by junior staff is the key to profit without experienced staff getting actively involved.

Thanks (0)