Brexit, the historic departure of the United Kingdom from the European Union, has sent shockwaves through the accounting sector in the UK. In this captivating blog post, we will unravel the grim reality of Brexit's impact on accounting firms, intertwining hard-hitting facts and figures with innovative solutions to mitigate the challenges faced by these firms.
Let's dive into the facts and figures that can provide more clarity:
1. Loss of clients
Brexit has led to a loss of clients for many UK-based accounting firms, particularly those that relied on clients from the EU. Following Brexit, accounting firms in the UK witnessed an average revenue decrease of 12% in the first year as per the Association of Accounting Technicians. Outsourcing can help firms mitigate this challenge by providing access to a broader client base outside the UK.
Outsourcing can also help firms expand their services and cater to the needs of clients in different regions, making them less reliant on a specific market.
2. Increased competition
The loss of clients has led to increased competition among UK-based accounting firms, which has led to a reduction in fees and margins. A survey conducted by the Association of Accounting Technicians (AAT) found that 74% of accounting firms in the UK experienced increased competition after Brexit due to the loss of clients and market uncertainty.
Outsourcing can help firms reduce their costs by accessing a pool of skilled and experienced professionals who can provide services at a lower cost. This allows firms to remain competitive and improve their profitability without compromising on the quality of services.
3. Changes in regulations
Brexit has led to significant changes in regulations and laws that have affected the accounting industry in the UK. The Financial Reporting Council (FRC) highlighted that accounting firms need to adapt to changes in regulatory frameworks, including International Financial Reporting Standards (IFRS), due to the impact of Brexit on financial reporting requirements.
Outsourcing can help firms stay up-to-date with these changes by accessing professionals who have expertise in different areas of regulation and compliance. This allows firms to provide their clients with comprehensive and accurate advice while remaining compliant with regulations.
4. Talent retention
Brexit has led to challenges in talent retention for UK-based accounting firms. Approximately 30% of EU nationals working in accounting roles left the UK within the first two years of Brexit as per the Financial Times.
Outsourcing can help firms address this challenge by providing access to a pool of skilled professionals who can work remotely. This allows firms to expand their services without increasing their overhead costs, making it easier for them to retain existing staff and attract new talent.
5. Uncertainty
Brexit has made it difficult for accounting firms to plan for the future. According to a survey conducted by Deloitte, 98% of CFOs in the UK reported that Brexit has increased the level of uncertainty in their business planning and decision-making processes. A study by the Institute of Chartered Accountants in England and Wales (ICAEW) revealed that 63% of accountants in the UK believe that Brexit has increased uncertainty for their client's businesses, affecting their ability to plan and invest.
Outsourcing can help firms remain agile and adaptable to changes by providing access to a flexible workforce. This allows firms to adjust their operations and services quickly, ensuring they remain competitive and profitable in an ever-changing business environment.
The statistics paint a concerning picture of the impact Brexit has had on accounting firms in the UK, including declining revenue and a shortage of skilled professionals. However, outsourcing presents a data-backed solution to overcome these challenges. By leveraging cost savings, accessing specialized expertise, and focusing on value-added services, accounting firms can adapt to the post-Brexit landscape and thrive amidst the changing business environment.
Are you ready to fight this challenge with the help of outsourcing? If your answer is YES, then what are you waiting for Book a call now.