How accountancy practices can plan for the new era

Feb 25 2009 by Tom Scotney, Birmingham Post

Now is the toughest time for financial services firms for decades. Justin Hodgin, head of the finance wing of recruitment firm Ortus Professional Search, looks at why mergers could be on the cards for many accountants.

The world has changed over the past 12 months and that has affected the Midlands on every level, including accountancy practices. It has been well publicised that the national practices have cut staff from top to bottom, with nearly ten per cent being made redundant. Regional practices are also making decisions that we would not have envisaged 12 months ago.

The challenge for the small practices in the region has changed but certain issues that needed to be addressed are still there; during these challenging times, they need addressing with more immediate urgency.

Having spoken to over half the sole practitioners in the region, it is surprising how many partners who think they will retire over the next five years have not made any solid plans about how they will actually do this. Ironically, this is something they emphasise the importance of to their own clients.

There are about 800 practices with two partners or fewer in the region and this figure is estimated to fall to about 600 in the next three years.

Even before the changes in the market place, with the banks not being as “open” as they were, these practices always had certain issues, with succession, staffing, marketing and IT costs being among the most commonplace.