The number of accountancy, bookkeeping and auditing companies has fallen by 3% in the past year and almost 8% over the past five years.
The Global Payroll Association has analysed the changing market size of the UK Payroll, Auditing, & Bookkeeping industry between 2018 and 2023, based on the number of operating businesses in the sector.
The latest figures reveal that there are currently an estimated 40,275 active accounting, bookkeeping, and auditing companies in the UK. This equates to just 1.48% of all UK businesses. The current total of 40,275 businesses marks an annual decline of -2.9%. It marks a five-year decline of -7.6% compared to 2018’s total of 43,575 active accountancy, bookkeeping, and auditing businesses.
However, Wales is one of only three regions to buck the trend, with an 0.8% increase in active businesses over the past five years.
The North West’s current total of 860 active businesses marks a 3% increase since 2018, while numbers are up 2.1% in Northern Ireland.
London is home to more businesses in this sector than any other region, with 9,670 companies accounting for 24% of the UK total. But compared to 2018’s London total of 11,390, the capital has seen a five-year decline of -15.1% – the largest drop of all UK regions.
Melanie Pizzey, CEO and Founder of the Global Payroll Association, said:
“The stark decline in the number of active accountancy, bookkeeping and auditing businesses suggests that more businesses are bringing their processes in-house in order to avoid the additional expense of outsourcing these services.
“You can’t blame them given the difficult economic environment we have been dealing with for a number of years, but given the importance of accountancy and bookkeeping, of which payroll plays an essential role, it’s vital that when bringing these services in-house, businesses are doing it properly.
“This means hiring experienced staff, installing good processes, and making use of the right software platforms.
“ If in-house processes aren’t properly thought through and end up failing, it can have a huge negative impact on any business. For example, if there are errors in the payroll process, staff can be incorrectly paid or even go unpaid which means they’re going to spend time worrying about whether the money they’re owed is going to arrive in their account, instead of giving full focus to getting their jobs done.”
