There are 43,720 registered businesses in the UK classified under the Standard Industrial Classification (SIC) of “Accounting; bookkeeping and auditing activities; tax consultancy”.
Granted, this does not mean each of the businesses is an accountancy practice, and many might only be delivering bookkeeping services. But I’ve scoured the web up and down until it sparkled and these were the closest numbers I came up with.
The information comes from the Office for National Statistics, and the businesses break down further like this:
- United Kingdom: 43,720 businesses in the “Accounting; bookkeeping and auditing activities; tax consultancy” category (up from 43,575 in 2018)
- Great Britain: 43,000 (up from 42,875 in 2018)
- England and Wales: 40,970 (up from 40,860 in 2018)
- England: 39,705 (up from 39,645)
London has the highest concentration of accounting businesses with a whopping 11,680 classified as Accounting; bookkeeping and auditing activities; tax consultancy, beating even all of Scotland (2,275), Northern Ireland (795), and Wales (1,380) combined.
36,110 (81 per cent) of the businesses have four or less employees. And only 150 of them have more than 250 employees.
As for turnover:
- 29 per cent of the businesses (12,770) turn over £49,000 or less per year
- 28 per cent (12,445) turn over between £50,000 and £99,000 p.a.
- 26 per cent (11,420) turn over between £100,000 and £249,000 p.a.
Competition is fierce
Accounting/bookkeeping/tax consultancy businesses are the twelfth most popular business in 615 categories, putting it in the top 0.019 percentile of services being offered in the UK! It is beaten only by such ubiquitous trades as “Business and Management Consultancy”, “Computer Consultancy”, “Restaurants”, etc.
There apparently are more accounting/bookkeeping businesses in the UK than there are hairdressers!
Shew. That’s a lot of competition. If you ever needed a wake-up call regarding your accountancy practice’s marketing channels and overall efficiency, let this be it.
Computer programmers have less competition, lawyers have less competition, real estate agents have less competition. Not only that, computer programmers, lawyers and real estate agents are not services that are generally required regularly. They are specialised services which people will pay for once and then forget about. If the bill was high, time might “heal the wound” by the time the person ever needs such services again.
But the accountant… Oh, the accountant sends his bill regularly to his client, and the client is forced to look at what he is paying so often that he might very well consider “shopping around” for someone cheaper if he doesn’t see value in what is being offered.
Accounting is a tight-margin industry, and unless you have reduced your workload in the extreme, as well as honed your production so that it sings, you’re going to struggle to stay profitable.
But it gets worse.
In October 2019 the FRC reported that registration in the various UK accounting bodies continues to grow and now stands at a whopping 365,000 members in the UK and ROI, and a staggering 550,000 members worldwide.
There are also more students studying accounting than in the previous year.
So, not only is the accountancy field rife with firms, there are more accountants on the way…
COVID-19’s impact on the accountancy profession in 2020
A large number of accountancy practices will be forced to close their doors this year — unless they completely change the paradigm under which they are operating. With the UN predicting a global loss of five to 25 million jobs and “$860 billion to $3.4 trillion in labour income” as a result of the coronavirus, a lot of accountancy practices will be fighting an uphill battle to stay on track.
But it is not all doom and gloom. The coronavirus is a challenge like no other challenge we have faced before. But it is important to keep in mind that it is precisely that: A challenge. And no business worth keeping ever made it through without fighting through challenges.
Billionaire John Paul DeJoria, who parlayed $700 into a $900 million-a-year hair care enterprise, was homeless twice before achieving success. Chris Gardner, who was portrayed by Will Smith in the biopic “The Pursuit of Happyness”, had an extraordinary rise to success that seems almost fictional in its impossibility.
Accountancy firms must modernise in order to stay afloat. Just as the newspaper business was forced to find a way to become profitable when it saw that the internet (and free information) wasn’t going anywhere, so must accountancy practices realise that using a sophisticated combination of curated online tools is the only way to survive this business when things are normal.
But things are not normal now. COVID-19’s impending economic crisis means that optimising your accountancy practice’s workflows, marketing, and efficiency are now more vital than ever before.
You must must must find ways to reduce your workload while at the same time increasing your profitability. There are ways to do it. I have written an entire book about it.
Competition is fierce in the accountancy field, but moving forward you will have the added load of trying to succeed in what very well might be another recession. You can do it, believe me. But you’re going to have to start now, and you’re going to have to modernise in the extreme so that your practice offers more things, better things, and at a better price, than the 43,719 other firms competing with you out there.
