The study paints a picture of an industry that is remarkably resilient. Even in the midst of the COVID-19 pandemic, just over half of respondents (51%) told us that their business is growing at a similar rate or even faster than it was pre-pandemic.
We share some of the key highlights from the study. Click here to download the full report.
The industry is looking to hire, but finding the right talent is the challenge
Almost a third (30%) of the firms we surveyed said they are looking to hire more full-time staff in the year ahead.
While this is a great sign of an industry that’s experiencing growth, follow up interviews with accountants and bookkeepers highlighted that making the right hires might be easier said than done.
“Whenever I speak to other accountants, recruitment always comes up as a huge challenge”, says Pamela Phillips, Director & Co Founder of de Jong Phillips. “We know we could take on a lot more business if we could hire more staff, but it’s so hard to find the right talent. Firms like mine are looking for people who are commercially minded, genuinely interested in their client’s business (not just in their numbers) and get excited about helping them grow. We also want people who get excited about what tech can do to help our clients. And finally, we need someone who’s actually a qualified accountant with some good experience in practice. Getting someone who can do all three of those is really hard… to be honest, getting someone who can do any one of those is really hard.”
Practices are growing just as fast, or faster than pre-pandemic
With many practices looking to hire, it makes sense that just over half of respondents (51%) claim their client base is growing faster, or at a similar pace than pre-pandemic, while only 4% say their client base is declining.
Where is this growth coming from?
While our report shows a link between technology adoption and business growth, it’s also worth highlighting that the pandemic caused many small businesses to rely on their accountants and bookkeepers more than ever before. Our previous study of small businesses in 2020 found that the COVID-19 pandemic had even prompted 14% of them to turn to an accountant for the first time.
While few will have made it through the pandemic unscathed, the sector’s commitment to their clients during this time appears to have strengthened those key business relationships and encouraged the formation of new ones.
Firms with higher usage of online accounting software report higher average annual revenue per client
Fast growth has frequently been linked to the adoption of technology-based solutions.
In our study, practices who said they were growing faster than prior to the pandemic were also the most likely to have 100% of their clients using online accounting software (17%).
And it’s not just growing client bases where the use of online accounting software is making an impact.
We also found that practices with a greater proportion of clients using online (or ‘cloud-based’) accounting software enjoy higher average annual revenue per client.
The average annual revenue per client for firms with just 0-25% of clients using online accounting software is £1,334, whereas for firms with 75% or more of clients using online accounting software, it’s considerably higher at £1,636.
It appears much of the industry feels they’ve only started to scratch the surface when it comes to the opportunity that lies in rolling out accounting technology across their firms.
Accountants and bookkeepers are committed to supporting their clients
Alongside harnessing the power of technology, providing continued support for clients through Making Tax Digital was also flagged as a key area of focus for accountants and bookkeepers (43%) for the coming years.
When asked about their key challenges, 54% flagged supporting their clients as they rebuild from the pandemic as their main focus.
This further backs up our 2020 study in which 43% of small business owners said that their accountant had been crucial to their pandemic survival. Similarly, 45% said their accountant is more important to their business than ever before.
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Don’t forget to download the full UK 2021 Accounting and Bookkeeping Industry Performance Report for all the key data to help you make the right decisions to build a healthy business.