Continuing our regular feature focusing on the most popular small business types, we take a closer look at the role of accountants.
What do they do?
Small accounting firms often handle the books for other small businesses. This can mean managing everything from incomings and outgoings to payroll and tax issues.
They can offer the company financial advice, provide warnings if things aren’t going well and audit their accounts to see where they stand.
They might also handle aspects like tax planning, business mergers and acquisitions, major purchases like property, bankruptcy and insolvency.
Public practice firms provide advice and guidance to any client who pays them to do so, from large companies to individuals.
Getting started
Like many professional industries, the first step is to get qualified. This usually takes the form of a degree.
Unlike, say lawyers, there’s no specific requirement for that degree to be in accountancy. Though related subjects like business or economics are useful.
To become a fully qualified chartered accountant, you’ll need around an additional 3 years of training and the same amount of time working in the industry following your degree. This includes taking exams that take place alongside working for an accountancy firm.
After that, you’re free to set up your own small business as an accountant. It’s useful to have a good list of potential clients, a good reputation in the industry and possibly a specialist area like tax or fraud. This can help you to stand out in a crowded marketplace.
Becoming part of one of the institutes of chartered accountants is also important in proving your credentials. This not only requires you to be fully qualified and experienced, but also committed to professional development goals each year.
Industry challenges
Accountancy is similar to consultancy, in that’s it’s dominated by a handful of big firms with a crowded market place of smaller businesses all competing for the rest of the work.
The key is to find a way to stand out. This might mean having good local knowledge, specialising in a certain area of accountancy, having a multi-national staff roster to attract foreign clients, or finding a new way to deliver your services.
There’s also the challenge of technology. Software and apps have made many of the basic accountancy jobs like filing tax returns or auditing businesses much more straight forward, so some small business owners have decided to take these roles on themselves.
This has led to a change in what people want from their accountants. Instead of just doing the numbers, they’re more concerned about receiving advice and guidance.
Personal challenges
As with many small businesses, there can be long hours involved. Plus, you need to stay constantly up to date with changes in technology, legislation and the industry landscape.
Most jobs are based in big cities, with accounting centres in the likes of London the best places to find new work. It can either mean relocating to these centres, or lots of travel.
The rewards can be good though, with salaries higher than the average and those who own their own business taking good cuts of the work.
Industry facts
• The 7 main accountancy bodies have over 342,000 members in the UK, according to the Financial Reporting Council (FRC)
• The proportion of female members increased from 33% in 2011, to 35% in 2015
• The number of registered firms is in decline (6,331 in 2015) – a fall of 304 firms from 2014
• This industry is worth around £4 billion a year (IBISWorld)
• The industry is expected to grow at a compound annual rate of 1.5%
Case study: The 2020 Innovation Group
Sometimes an industry needs a guiding light to drag them into the modern world. In accountancy, this light was provided by The 2020 Innovation Group.
The group was set up to provide innovative solutions for progressive accountants and tax professionals worldwide.
Realising that technology was playing an increasingly big part in accountants’ lives – and that some firms were struggling to keep up – the group was formed to help firms to improve their client proposition using new technologies. The group now has offices in the UK, USA and Canada, Australia and South Africa.
A big part of the offering is their annual awards that recognise innovations in forms of all sizes from individuals and small businesses to larger firms.
And they have also launched 2020 Tax Protection – a partnership between the group and PFP to provide tax fee protection to UK accounting professionals.
If you’re thinking of setting up an accountancy firm, the group is a good place to start for advice and industry news.
