Accounting Firms

Accounting sector plays ‘critical’ role in economic recovery, Xero finds

According to new research from Xero, 51% of firms are growing their customer base at a faster, or a similar pace to pre-pandemic levels

The strength of the UK’s accountant and bookkeeping sector is playing a “critical” role in the rebuilding of the economy, with firms providing a “vital lifeline” to small businesses during the pandemic. 

According to new research from Xero, 51% of firms are growing their customer base at a faster, or a similar pace to pre-pandemic levels. 

Its latest Accounting and Bookkeeping Industry Performance Report found that on average, firms added 10 business clients and six other clients in the past year, with growth being seen among all sizes of practice.  

When asked about key challenges in the coming years, 54% of accounting firms said that supporting their clients as they rebuild post-pandemic was their “main focus”. 

Looking ahead, harnessing the power of technology (37%), and providing continued support for clients as they get ready for the next phases of Making Tax Digital (43%) were also seen as the biggest opportunities in the next five years. 

Lauren Harvey, founding director, Full Stop Accountants said: “When the pandemic hit, client contact increased massively – it was fight-or-flight. 

“Our immediate response was, “we’ll do what it takes to get you through this”: BBLS applications, furlough, grant finding, cashflow… all of those things. But after a period, together with our clients we could switch to being more proactive instead of reactive.”

James Ashford, founder, GoProposal, added: “What we’ve learned over the last 12 months is that firms should try to be consistently profitable across EVERY service. When the pandemic hit, we found that many clients needed help with payroll and compliance as well as advisory services. 

“Firms that were able to offer all these services (profitably & sustainably) were better placed to help existing clients and win new ones.”

Glen Foster, director, Accounting Partners and Small Business at Xero concluded: “Behind nearly every resilient small business there’s a diligent accountant or bookkeeper. They’ve played a huge role in supporting business survival and growth. 

“Against a challenging backdrop, many firms have adopted new ways of working and have prospered as a result. They are leading the way in economic and business recovery.”

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