(last updated July 2019)
What has been happening in the book-keeping services sector
Because businesses are required by law to keep records of their financial transactions there is always a demand for the book-keeper's services. However, during times of recession, businesses close down and surviving businesses try to cut costs as far as possible. This might involve taking back in-house various services, such as book-keeping, that had previously been outsourced.
During most of the 2000s the overall number of businesses in the UK grew, increasing the potential customer base for book-keepers. There was also a strong trend towards outsourcing book-keeping work so that hard pressed proprietors could get on with their core activities. Other businesses found that there wasn't enough book-keeping work for a full-time employee, so the best solution was to give the work to an efficient and reliable book-keeping firm.
Huge growth in internet retailing also increased demand for book-keeping services - keeping track of online transactions and making sure that these are properly integrated into a business's records.
The economic downturn that started in 2008 saw a fall in the number of businesses, reducing demand for book-keeping services. However, the economy started to pick up again in the second half of 2013 and growth accelerated in 2014. New businesses were encouraged to start up so that during the year the total number of businesses in the UK reached five million for the first time. Economic recovery continued during 2015 and the number of businesses also continued to grow, reaching nearly 5.4 million.
Government figures show that there were 5.5 million private sector businesses in the UK in 2016. This was 2 million more than in 2000, an increase of 59% over the whole period and an average increase of 3% a year. The number increased again in 2017, bringing the total to 5.7 million. Of these, 5.5 million were micro-businesses, which nevertheless accounted for 33% of employment and 22% of turnover.
Despite an average annual increase of around 3% in the number of private sector businesses, the accountancy and book-keeping market is still very competitive so it's very important to think carefully about whether:
- there are enough businesses in your area that will be likely to require your services
- you will be able to compete successfully against other businesses offering book-keeping services
On the positive side, it's likely that many small businesses will need help with submitting their accounts and returns to HM Revenue & Customs (HMRC) online, and making VAT, PAYE and tax payments electronically. The introduction of mandatory digital record keeping and quarterly returns under Making Tax Digital (MTD) will also mean that businesses will have an increased need of bookkeeping services to ensure that they keep digital records in a way that enables their quarterly returns to be made in compliance with HMRC requirements.
Many businesses outsource their payroll management to a specialist book-keeping firm and you might also be able to offer pension auto enrolment services now that so many employers have to enrol their employees into a pension scheme and make contributions to it.
Keeping up to date with developments
Joining a professional body is an excellent way of keeping up to date.
The International Association of Bookkeepers (IAB) represents the interests of book-keepers in the UK and overseas. It offers a range of qualifications and members benefit from services such as a bi-monthly publication, subsidised courses, seminars, continuing professional development and so on. It also produces helpful guidelines on how book-keepers should comply with the Proceeds of Crime Act and the Money Laundering Regulations. Anyone offering accountancy services must register with HM Revenue & Customs (HMRC) if they are not a member of a supervisory body like the IAB.
You can contact the IAB at Suite 5, 20 Churchill Square, Kings Hill, West Malling, Kent ME19 4YU or visit their website for more information.
The Institute of Certified Bookkeepers (ICB) maintains professional book-keeping standards by offering a range of relevant qualifications. The ICB Level IV Certificate in Advanced Bookkeeping and Accounts is recognised by the ACCA as a suitable qualification for exemption from the ACCA Foundation Paper F3 in Financial Accounting. The ICB organises the annual Bookkeepers Summit, attended by members of the profession, software developers, government ministers and industry leaders. The Institute also has a range of guidance material that you can download from their website. You can contact the Institute at 122-126 Tooley Street, London, SE1 2TU - or visit their website.
You will be able to obtain a lot of useful information if you go to a trade show for the accountancy and book-keeping sector such as Accountex. You will be able to meet suppliers of a wide range of useful software packages and see products demonstrated. The Exhibitions website includes details of other trade shows that may be of interest to you.