VIBRANT competition is the top threat to profitability in accountancy, according to a poll seen by City A.M.
Out of all potential risks to their profitability, intense competition on accounting fees was cited as the top peril for earnings by 29 per cent of accountants surveyed by Bloomsbury Professional.
This put it ahead of pressure from the client side, which was cited by 21 per cent as the biggest threat, and late payment, highlighted by 26 per cent.
“Revenue worries are keeping accountants up at night,” said Bloomsbury managing director Martin Casimir. “They are very concerned that the tough financial climate means clients will be keen to keep fees low – and that this pressure from clients will also translate into increased fee competition among firms.”
Bloomsbury said that this pressure had already pushed firms into fixed fee work – cost overruns from which were cited by 21 per cent of the respondents as another high risk to the businesses’ bottom lines.
A much more optimistic area for accountants was the loose labour market, which was helping companies keep their costs low and hold onto key staff. Ninety-three per cent of respondents to the survey said the possibility of competitors poaching their staff was not a risk to their profitability, while over three quarters said the same for pay rises.