THE PROFESSION is rebounding from the recession, with new accountancy firm start-ups outstripping firm closures for the first time since 2008, according to research by Bloomsbury Professional.
There was a net gain of 850 accountancy firms last year, following a net loss of 360 firms in the preceding two years, the research found.
According to Bloomsbury, the number of start-ups was 14% higher last year, compared to the depths of the recession in 2009 – while firm closures were down by 16% over the same period, from 3,985 to 3,360.
“The market has stabilised as the economy has started to recover from recession. New firms are joining the market, clients are now willing to increase their spend on finance and accountancy advice, while the firms that survived the recession are financially tougher and less likely to fail,” said Martin Casimir, managing director at Bloomsbury Professional.
Martin Casimir, managing director at Bloomsbury Professional explains: “Accountancy firms endured a tough recession during which a lot of the weaker firms were forced out of the market. Many firms struggled to retain existing clients or attract new ones without being forced to drop fees.”
Bloomsbury added that the post-recession accountancy profession looks very different, with the arrival of micro-firms and firms with non-traditional business models boosting the number of new accounting businesses.
“A lot of accountants are leaving larger firms and deciding to start out on their own. Restricted promotion opportunities and low wage growth during the recession, as well as redundancies, have been big drivers of this,” said Casimir.
“There are very low entry barriers to the accountancy market too: potential sole practitioners only need a computer, a spare room and a good knowledge of start-up rules and regulations. Most accountants are more than familiar with these.”
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