Large firms to swallow up smaller practices
Large numbers of mid-tier and smaller accounting practices are expected to be swallowed up as consolidation sweeps through the industry
A survey of 262 accounting practices by professional services advisers Kato
Consultancy found that 72% of respondents felt threatened about their
independent status, highlighting concerns over the burden of government
legislation and regulation, plus increased risk through litigation.
‘I can see a third to a half of these businesses disappearing in the next
three years, they’ll merge with larger or niche firms that have got their act
together commercially,’ said Kato director Phil Shohet.
Smaller firms were concerned about the threat of competition from outside the
profession, and three quarters of respondents warned of barriers to the
retention of able staff, including a growth in recruitment competition from
larger firms.
Only 29% are looking to be more targeted in their approach to new clients and
investigate creating areas of specialisation within their own firms.
‘It’s terrifying, firms can’t get or keep staff and it has a domino effect on
succession. People train with these firms but leave to go to larger firms or
into industry. They can’t see a future in a smaller firm,’ said Shohet.