Why we're doing this

Welcome to the 2018 GoCardless Accountants Benchmarking Report. We're lucky to count more than 3000 UK accounting firms as our customers and partners - and this report has been created with help from many of them (take a look at our panel of experts - from cloud software specialists to experienced practitioners, consultants and journalists).

With change a constant for today's accountants, seeing where your firm stands in relation to peers and competitors is invaluable. 297 practices completed our survey, answering questions around three core themes: onboarding and managing clients; billing, pricing and payments; and adapting to change. Read on to see what they said - and to see comment from our panel and video clips that discuss the findings in more detail.

If you'd like to get involved in next year's survey, contact content@gocardless.com

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Our expert panel

From small firm owners to big firm directors and cloud specialists, software providers to consultants and media houses, our panel have the collective experience to bring out the insights from our research.

Anoop Rehal

Director, BDO UK

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Anoop has a proven track record of problem solving and assisting clients with the implementation of systems and building accounts departments. Having spent a number of years developing his knowledge of accounting software, he has spent the last few years investing a considerable amount of time in researching cloud technology. He has worked with large, medium and small accountancy firms, specialising in owner managed businesses, helping them to grow and scale up in the UK and internationally.

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Simon Woodhams

Head of Cloud Accounting Software, Wilkins Kennedy

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Starting as a Business Software Consultant back in 2012, Simon now heads up the Cloud and Accounting Software division at Wilkins Kennedy, where he has built up a large portfolio of SME clients, in a variety of sectors. Simon is in charge of the MyWK project, which launched in 2016 to offer cloud accountancy services to Wilkins Kennedy's clients. He also provides clients with software identification review and upgrades, networked software solutions and bespoke training services.

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Sharon Pocock

MD and Principal Accountant, Kinder Pocock

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Sharon established Kinder Pocock Chartered Certified Accountants in 2005, following 15 years working in the accountancy profession. Her aim then, as now, was to offer professional yet straightforward advice and support to small and new businesses. Sharon is also Xero UK's Most Valued Professional 2016.

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Edward Berks

Director of Banking, Fintech and Ecosystem, Xero

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Edward has been with Xero for nearly three years. Under his leadership, Xero is working with banks, fintechs and regulators to ensure that Xero's rapidly growing EMEA base of some 300,000 SME customers realise the potential of Open Banking and the next generation of digital financial services. Previously, Edward held senior leadership roles with a number of software and cloud businesses, including Microsoft. He has founded two cloud businesses; a VC-backed challenger in IT security, since acquired by a UK PLC - and a business applications vendor for SMEs.

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Paul Bulpitt

Co-Founder - The Wow Company & Head of Accounting at Xero

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Paul founded The Wow Company in 2004, building a fast-growing national firm exclusively serving small businesses. With a nationwide client base, Wow has won many awards including Xero Partner of the Year, AccountingWeb's Practice Growth Award and Xero's 100% Cloud Award in 2015, to name a few. In 2015, Paul was appointed as Xero's Head of Accounting in the UK, on a part-time advisory basis.

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Shane Lukas

Managing Director, AVN

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Shane is a strategist, coach and speaker on the future of the accountancy profession. Over the last three decades, he has worked with businesses, putting systems and processes in place to improve efficiency, productivity and team culture. Since 1998 his business, AVN, has been giving accountants greater choice about the role they play, the hours they work, the income they take and the difference they make. Shane is author of Amazon No.1 Best Seller, What's Next For Accountants.

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Tom Herbert

Editor, AccountingWEB

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Tom is editor of AccountingWEB, the UK's leading independent website for accountants and finance professionals. Tom is responsible for setting the site's editorial agenda across all aspects of accountancy, including tax, technology, business and practice.

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Nicola Anderson

VP Marketing, GoCardless

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Nicola Anderson is VP Marketing at GoCardless. Founded in 2011, GoCardless is taking Direct Debit into the digital age, making it easy for all business to take recurring payments. GoCardless currently processes more than £5bn per year for over 30,000 businesses, including 3,000 accountancy firms. Nicola has worked in digital marketing for over 18 years covering a variety of sectors from sport and gambling to printing and beauty. Prior to GoCardless Nicola worked at MOO as GM, International. She's also a mentor for Virgin Startups and is studying for a diploma in coaching and mentoring.

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Cameron John

Global Director of Accountant Partners, Sage

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Cameron is Sage's Global Director of Accountant Partners. A qualified accountant, he is passionate about enabling accountants' relationships with their clients to flourish. Cameron has extensive experience across technology and Professional Services industries, he combines inspiration and insight with practical advice.

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Nathan Keeley

Partner, MHA Carpenter Box

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Nathan is a cloud expert and a key member of leading cloud software providers' advisory boards, helping them to formulate their roadmaps for software development and Making Tax Digital. He has been influential in advising many of the cloud community add-ons and heads the MHA Digital Solutions Group. Nathan also offers a wide range of services to family businesses and business start-ups, including corporate accounts and corporation tax, business plans and projections, payroll VAT and personal tax. MHA Carpenter Box was Xero accounting partner of the year 2016/2017.

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Mark Wickersham FCA

Chartered Accountant, public speaker and author

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Mark Wickersham - Chartered Accountant, public speaker and author - is known as the most sought-after profit improvement expert in the accounting community. Mark is also a widely published author on practice issues. In May 2011 his first book, “Effective Pricing for Accountants”, was a number 1 Amazon bestseller. In 2015 Mark was shortlisted in the AccountingWeb “Outstanding Contribution to Accounting” award. Mark has over 100 recommendations from accountants on LinkedIn; Connect with him on LinkedIn to get access to free resources Mark has created for accountants in practice.

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Who completed the survey

297 UK accountancy firms completed our survey in Spring 2018. Just over two thirds of respondents come from small firms with less than 5 employees, but over half reported that they served more than 100 clients in the last year, with the biggest proportion (36%) serving more than 150. In the video below, our panellists discuss whether cloud technology is driving profit growth and client acquisition at their firms.

How many employees does your business have?

Shane Lukas Quote Headshot

Nearly three quarters who completed GoCardless' survey are in small teams of five or less. There has certainly been a move for accountants to leave larger practices and set up on their own from the comfort of their home or micro office. Cloud-based technology is making this easier than ever before as well as increasingly automating tasks and giving instant access to outsourced resources such as PAs, phone answering services and even bookkeeping and compliance work; shifting from fixed costs to variable and direct costs.

Shane Lukas, Managing Director, AVN

How many clients has your business served in the last 12 months?

What is your annual turnover?

Paul Bulpitt Quote Headshot

There is a high correlation between revenue, client numbers and staff numbers among our respondents, which suggests to me that the many firms are not yet harnessing the power of digital to transform their business. The exciting thing about this is that it shows the scale of the opportunity yet to be realised - with the power of cloud behind them, firms can drive revenue and service more clients, with fewer staff.

Paul Bulpitt, Co-Founder at The Wow Company & Head of Accounting at Xero

Which services does your business provide?

Around 90% of our respondents offer basic bookkeeping and payroll services; most also offer tax preparation services. Almost three quarters also offer business advisory services to their clients.

Tom Herbert Quote Headshot

A much-covered trend in accountancy has been the evolution of services offered. While the vast majority of firms offer bookkeeping, payroll and tax services, nearly three quarters (74%) offer business advisory in some way, shape or form.

More than a quarter of firms (27%) also offer a version of the ‘outsourced CFO' model. While this number may seem low, it is reflective of the direction of travel, and as smaller firms use the latest tech tools to adapt to the market I expect this number to rise rapidly in the next two or three years.

Tom Herbert, Editor, AccountingWEB

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Priorities for 2018

We asked firms: what is your number one priority for 2018? 41% said it is to acquire more clients, while 23% said they are looking to improve business efficiency through technology, and 19% are looking at how they can increase the value of existing clients.

Tom Herbert Quote Headshot

The survey results hint at increasing economic confidence. In times of recession many businesses prioritise cost saving and batten down the hatches to weather out the storm. However, only 3% of firms listed are reducing costs as their top priority for 2018.

Tom Herbert, Editor, AccountingWEB
Cameron John Quote Headshot

When we combine the top three responses to the question - acquire more clients, increase the value of existing clients and increase automation, all of these speak to a growth mindset of the data set. Efficiency is therefore key to delivering this growth. The solution unlocked by GoCardless, connected to an accounting engine is what will power this growth and places the accountant in firm control.

Cameron John, Global Director of Accountant Partners, Sage

Our panellists, Nathan Keeley, Sharon Pocock, Simon Woodhams and Anoop Rehal, discuss their business priorities for 2018, and whether cloud technology is enabling them to serve more clients.

Onboarding and managing clients

Around half our respondents offer services pre-signing up - and most of those offer an initial consultation or meeting. When it comes to onboarding, only 46% of our respondents manage this as a company-wide process, with 50% leaving it up to the individual partner or accountant.

Our respondents also report that on average half of their client base are using cloud accounting software; and of those clients, only 57% use the firm's preferred software. The majority of firms (85%) don't make it mandatory for clients to use their preferred cloud accounting platform. Watch the video in this chapter to see our panellists discuss this.


Do you offer free services pre-signing up?

Mark Wickersham Quote Headshot

Are 'free services' lazy pricing in disguise?

It's interesting to see almost half the respondents provide free services before signing up a client. This illustrates how little the profession values what it does. There are few excuses for doing work for free.

I was helping a bookkeeper recently with pricing a one-off clean up project. Normally she would carry out an initial diagnostic process, reviewing the clients' accounting records, identify the state of the mess and then use that information to create a proposal - all for free. However, even the process of carrying out the review and at the end, recommending the next course of action, is valuable.

I helped her to craft the proposal for a 2-hour meeting to review the work required and she successfully charged $250. Paid in advance. This was not an existing client.

The fact that this potential client was willing to pay up front demonstrates they see value in what this bookkeeper does, is willing to pay for that value, and this helped her craft a proposal for $4,000 to carry out the next stage of the project.

So why do accounting firms do so many things for free?

I think the real reason is they haven't got a pricing system in place. They don't know how to price, and so it is easy to do small projects for free than have a pricing conversation. The trouble is, over the course of a year, these small projects add up.

Mark Wickersham FCA

How do you onboard new clients?

Those Accountants that we work with who have a company wide process to onboard new clients deliver a consistent positive experience and those that set up Direct Debits from the start are best placed to build a great experience for their clients.

Cameron John, Global Director of Accountant Partners, Sage

Avg. % of clients met face to face 84%

Shane Lukas Quote Headshot

It is important for accountants to explore the numbers that matter to their clients and look at ways to improve on them. This is best done through face to face conversations that will lead to promoting a paid-for business advisory service. The survey shows that 16% of accountants are not having face to face discussions and are therefore perhaps both leaving money on the table and falling short of building a relationship.

Shane Lukas, Managing Director, AVN, & best-selling author of ‘What's Next for Accountants'

Avg. % of clients that use cloud (online) accounting software 53%

Shane Lukas Quote Headshot

There has been an accelerating trend for accountants to move their clients onto cloud-based products. Businesses using cloud-based products now stands at over 50%. Just 12 months ago, that number was very different; AVN performed its own survey and then just over 20% of clients were on cloud-based software. This still means that there are over two and a half million businesses not using the cloud in the UK. The GoCardless survey shows that most accountants don't insist on a software package. Interestingly, I see many accountants who work only with businesses who use a specific package. This keeps things simple for the accountant.

Shane Lukas, Managing Director, AVN

Avg. % of clients that use your preferred software 57%

Is it mandatory for your clients to use your preferred cloud accounting software?

Avg. no. of clients turned down in last 12 months for not using preferred cloud software 2

Highest no of clients turned down by a single firm for not using preferred cloud software 10

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Billing, pricing & payments

Fixed pricing was the most popular model among our respondents, with almost three-quarters offering this to clients; while 40% still charge clients by the hour. The majority of firms billed in arrears (58%), and 42% are kept waiting for payment more than 21 days past the due date. A quarter of our respondents spend more than 5 hours a month chasing payments.


How do you charge?

Mark Wickersham Quote Headshot

‘Fixed' and ‘value' pricing are not the same

While a increasing number of firms are moving to value pricing, it is still the minority and a surprising number of our respondents are still pricing based on time. It's a crazy way to price. Customers hate it, it's not fair and it also results in lower prices and less profits.

What I have noticed over the last decade is an increasing move to fixed pricing. It's a better way to price because it gives the client certainty. However, there is a big misconception. Fixed pricing is not value pricing. Having a single fixed price for any service cannot be based on value since every client values things differently.

When I ask accounting firms how they have arrived at their fixed price they tell me it is based upon their best guess at how long it will take to do the work. This is just another form of cost-plus pricing. There is no value in an hour of time. The value is in the end result. Fixed pricing is not value pricing and it usually results in much lower prices.

Mark Wickersham FCA

Avg. % of work billed in advance 34%

Avg. % of work billed in arrears 58%

Mark Wickersham Quote Headshot

The value of upfront billing

Most accounting firms still bill in arrears, although it's reassuring to see the proportion billing in advance is growing.

Whenever we buy anything in life we want certainty. We want certainty over what we are getting and certainty over what we will pay. Your clients are no different. You must give them a price upfront. You should raise the invoice upfront, and you should ensure you are paid before you complete the work.

I continue to find most accounting firms have debtors on their balance sheet. Money they are owed by clients. Why?

There is no professional or legal requirement for accounting firms to give credit. We should be paid before completing the work (even better, before starting the work). That's the norm in the service industry.

I saw a bookkeeper asking for advice in a Facebook group. She had a client disputing the number of hours she had spent, wanting to see timesheets and wanting to pay less. She is in for a long drawn-out dispute with the client which could have easily been avoided by giving a fixed price in advance and getting paid in advance.

When you price upfront, raise your invoice upfront and use GoCardless to collect the money, you avoid fee disputes and avoid having to chase money.

Mark Wickersham FCA

What is your business's average debtor days?

Edward Berks Quote Headshot

This GoCardless study into debtor days complements Xero research that small business owners are spending an average of 10% of their day - which equates to two days per month - chasing late payments. This can be a huge waste of time.

Beyond tax and compliance, small businesses are increasingly turning to their accountants for guidance on best business practices. And the best advisors know that their clients can save time and boost cash flow through the adoption of payment services like GoCardless.

Building on success in the UK, with great feedback from our accounting partners and customers alike, we're delighted to be extending our partnership with GoCardless into additional Xero markets.

Edward Berks, Director of Banking, Fintech and Ecosystem, Xero

How many hours each month does your business spend chasing payments?

Compare this time spent chasing payments to the 20% who desired to increase automation through technology and we can see the loss in productivity and the constraints to growth this causes.

Cameron John, Director of Accountant Partners - ‎Sage

An astronomical 80% of accountants spend a minimum of two hours per month collecting debt. That time could be better spent delivering value to clients.

Shane Lukas, Managing Director, AVN

What % of your clients pay their fees late at least once a year?

For too long accountants are happy to provide extended credit terms to their clients allowing them to miss payment dates.

Cameron John, Director of Accountant Partners - ‎Sage

How do you take payments?

It's positive to see that 42% of client fees are collected through Direct Debit, this percentage can be much higher through the seamless service and integration of GoCardless. It puts the Accountant in full control.

Cameron John, Director of Accountant Partners - ‎Sage
Nicola Anderson Quote Headshot

Direct Debit reduces aged debts and time spent chasing payments

Our analysis shows there's a clear correlation between Direct Debit usage and a firm's average debtor days, as well as the time they spend chasing payments (shown by the graphs below). The higher the % of client fees taken through Direct Debit, the lower a firm's average debtor days are likely to be and the less time they tend to spend chasing payments.

This correlation is one of the reasons that many firms choose Direct Debit to collect their own fees - and advise their clients to do the same. This data also shows that uptake matters: firms who move a greater percentage of their payments to Direct Debit, are really feeling the benefits. It's one thing to ask a new client to pay by Direct Debit, but moving over existing clients can be difficult. If you're facing that challenge, take a look at our new guide - How to get your customers to move to Direct Debit.

Nicola Anderson, GoCardless

These graphs show the correlation between average debtor days (above), or time spent chasing payments (below) and the % of fees a firm takes via Direct Debit. In the above graph, firms with 0 debtor days - who are always paid on time - collect a median of 85% of their fees by Direct Debit.

The same goes for time spent chasing payments (below): firms who spend zero hours chasing payments each month, collect a median of 69% of fees by Direct Debit.

Adapting to change

We asked firms how they are adapting to change in three key areas: cloud accounting, hiring, and regulatory and technological change. Read on to see what they said.

Cloud accounting

More than 70% of our respondents feel they have adopted new technology like cloud accounting ‘well' or ‘very well' - you can listen to what our panellists think this means and what cloud plugins they recommend, in the video clips below. We also look at what firms are doing to train their staff on cloud accounting.

How effectively have you adopted cloud accounting?

Listen to our panellists as they discuss what it means to adopt cloud accounting ‘well' (above) and hear their recommendations on the cloud plugins that add the most value (below).

Our panellists discuss what's next for cloud accounting - and if cloud data could help accountants to develop new services for clients (below).

Do you train your accountants in cloud accounting?

Watch the video below to hear our panelists discuss what cloud training they have in place for their accountants.

Hiring talent

We asked firms whether cloud accounting was changing the make-up of their team: are they hiring more non-accountants to staff cloud roles? Our panellists also give their top tips for hiring in the video clip below.

Average % of staff that are non-accountants 29%

Average % of current vacancies that are non-accountants 12%

Regulatory and tech change

We asked how firms are keeping up with regulatory and technology developments - and how confident they feel advising clients on these.

Where do you go for valued advice?

How do you keep up with regulatory developments

Do you feel more or less confident advising on regulatory changes than you did a year ago?

Tom Herbert Quote Headshot

You saw in section 4 of this report, that only 5% of firms stated that their top priority was to deal effectively with regulatory changes like GDPR, bucking the perceived wisdom that change in the profession is largely legislation-led. Indeed, despite the government's tinkering, we see here that only 7% of firms felt less confident about offering advice to clients regarding regulatory changes than they did a year ago.

Tom Herbert, Editor, AccountingWEB
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