A fall in number of accountancy, bookkeeping and auditing businesses nationally has been blamed on companies bringing processes in-house instead of relying on external support.
Analysis from The Global Payroll Association (GPA) indicated that the number of businesses in the accountancy sector operating in the UK has fallen by three per cent in the past year and almost eight per cent over the past five years.
And the GPA urged businesses to make sure they are running their in-house processes ‘properly’ if they choose not to outsource these services.
The latest figures from the Office of National Statistics reveal that there are currently an estimated 40,275 active accounting, bookkeeping, and auditing companies in the UK. This equates to just 1.48 per cent of all UK businesses.
Of all UK regions, London has seen the steepest five-year decline of 15 per cent, while there are just three regions which have seen an increase: the North West (up three per cent since 2018), Northern Ireland (2.1 per cent) and Wales (0.8 per cent).
Melanie Pizzey, CEO and founder of the Global Payroll Association, said the ‘stark decline’ suggested businesses were bringing accountancy process in-house.
She 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.”
