THE CONTINUED pressure on fees is driving down profitability at firms, according to a survey published by CaseWare.
The IT provider found that 80% of firms reported that they continue to see strong fee pressures from clients which is forcing down the profitability they can make from audit services. However, 26% said the situation now is not as bad as last year.
An increase in pressure on services saw 81% of respondents lower their rates and provide more services in order to keep their client, with just 9% standing their ground – while 15% said they would offer more time and services for the same fee.
Simon Warren, (pictured) managing director at CaseWare said: “In the current economic environment, clients are in an incredibly strong position to push fees down as there are lots of rival accountancy firms hungry for their work.
With such strong fee pressure likely to continue, and limited room for manoeuvre, accounting firms need to think strategically about reducing their costs to restore profitability.
“Firms need to take new approaches, such as embracing automation and doing moving away from labour intensive manual or Excel-based approaches.”
CaseWare surveyed 115 individuals from the top 100 firms in April.
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