Practitioners view consolidators as one of the greatest threats to their continued existence and in the present environment small practices lacking funds to expand into other niche services are ripe for the picking.
Speaking at the ICAS practice management conference last week, , MD at accountancy support company SWAT Ltd, Mike Sturgess suggested Sage could be the next big consolidator in the UK.
The onset of online bookkeeping and other traditional services being handled electronically means that many small practices could see profits plummet if they have not already adapted to the technological change.
But a spokesperson at Sage denied it had any plans to take over small practices.
With Tenon’s first acquisition of the non-audit services of Morison Stoneham at the beginning of this month, practitioners’ concerns were brought to the fore at the conference. Tenon is the first UK quoted accountancy-based business services company to launch itself onto the consolidator path, a path already well worn in the US.
Besides staff loyalty, e-business and a lack of trained people, Sam Allred, partner responsible for computer consulting at Montana-based Anderson Zurmuehlen & Co, said consolidation was one of the biggest threats to UK practices.
‘The UK has not yet been impacted nearly as much as firms in the US. But, practitioners should start to create a consolidation strategy now,’ urged Allred.
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