KPMG has declared its intention to disrupt and dominate the SME market by telling small businesses “you can pay us the same as your current accountant but we’ll give you more”.
That’s the bold stance taken by the Big Four firm as it seeks to reap the rewards from its £40m investment in its enterprise programme, which includes subscription-based cloud accountancy support for small businesses.
KPMG announced it will take on high-street accountants and the mid-tier accountancy firms that focus predominantly on the SME market, at a Business Development Leaders’ Network event.
Iain Moffatt, KPMG’s UK head of regions, said: “This is the biggest investment KPMG has made in the SME market in the past 30 years. The small business accounting platform allows us to enter a market that we haven’t previously had access to.
“It’s a transformational change in our business. For the first time, a Big Four firm can offer services to start?ups and small businesses for a similar price as high-street accountants.”
Moffatt stressed that while the firm would continue to work with larger organisations it had made a conscious decision to invest in the SME market – particularly the lower end. And it’s actively recruiting for – and building – a new arm to service that ambition.
He decried the false perception that the “Big Four are more interested in the HSBCs and BPs of this world”, stating that over a third (35%) of its revenue stream (£600-700m) is derived from smaller businesses.
“We operate in that space already and we do it well. Our upper middle market share is around 25%; our lower middle market share is around 10-15%. We want to push that latter figure up to 25%.
“We’ll do that by saying to small businesses: ‘You can pay us the same as your current accountant but we’ll give you more’. We want to work with companies all the way through their lifecycle. We’re building a fully integrated business proposition.”
Moffatt also believes that within the next five years, Google or Amazon, rather big accountancy firms, could be their biggest threat.
“The reason I say that is because today, our profession is all about data. The more data you have, the more powerful you are. With big data you can create more-effective KPIs, better benchmarking, and more accurate insights. That’s the secret. That’s what the future holds.”
In November, KPMG and the McLaren Group forged a 10-year strategic alliance to use McLaren Applied Technologies’ (‘MAT’) to fuse their expertise in predictive analytics and the firm’s audit and consulting capability.
EY has appointed Janet Dawson as its global and UK&I government & public sector assurance practice leader
Former PwC employees Antoine Deltour and Raphael Halet have been found guilty for their role in the Luxleaks scandal
A crisis always gives advisers plenty to do - but there are questions as to whether Brexit will give them the lucrative work they desire
Given the events of the past week as we enter new territory our SMEs now more than ever need the support of their accountants, writes Bobby Lane