UK accountancy sector sees growth across nation

A new study has revealed that the UK accounting services sector has experienced consistent growth across the country, with increased demand for their services resulting in a 62% increase in new businesses in the sector since 2017.

Tyl by NatWest, the payments partner supporting UK SMEs and micro businesses, has commissioned the Evolving Enterprise Index report, revealing the fastest growing and fastest emerging sectors in the UK. In partnership with Data City, the report analysed five years of data from Companies House, showing the number of accounting services providers opened in the UK since 2017.

The UK accounting services industry is valued at around £6.4bn, with 2022 observing a 10% increase in the number of new accountancy firms opening nationwide. This post-Covid upwards trajectory is symptomatic of the UK economy’s recovery as businesses have re-opened and consumer demand has increased following periods of lockdown.

The rate at which the sector has grown varies across the country, with cities that maintained a pre-existing market for consultancies displaying strong growth. London exhibited the highest individual growth rate in the sector at 69%, whilst Manchester saw a similarly large growth rate in the number of new providers opening since 2017, with 1,982 appearing. Birmingham also showed impressive growth in the sector as 1,017 new accountancy firms opened up over the period.

Table One: Fastest growing markets for the accounting services sector between 2017 and 2022

The consistent growth, particularly in large cities such as Manchester and London, demonstrates the demand nationwide. As many of these new ventures are often independently run, it is more essential than ever that these small businesses are supported effectively to allow them to capitalise on growth opportunities.

Mike Elliff, CEO of Tyl by NatWest comments:

“These findings just go to show how when faced with new challenges, the UK’s professional services industry has found a way to not just survive but thrive. The growth observed in new ventures across the sector is a testament to the very best of British business and the way in which they shape our economy, and our country. At Tyl by NatWest, we know the importance of SMEs having the right tools so they can dig deeper and go further in their business to build stronger communities. Our Evolving Enterprise Index offers valuable insights, helping new ventures understand and contextualise the unique business blend of their local market. And ultimately helping them continue to thrive.”

Teresa Heath-Wareing, small business expert adds:

“The key to a thriving SME economy is in a wide variety of sectors that will appeal to a diverse range of consumers. It’s reassuring to see the positive outlook for small businesses who take the time to understand their local landscape and business climate.

“Small businesses are fighting an uphill price battle against larger organisations. To succeed in such a competitive environment SMEs must embrace the ways they add value to their customers that go beyond the bottom line.”

Tyl’s top tips for SMEs to improve their products and services:

1. Get to know your customers better

Tailor your product and service offerings to fit the wants and needs of your customers using data. AI tools such as chatbots and predictive analytics can help you make informed business decisions to help grow your customer base. Investing in business analytics is a useful way for SMEs to have an accurate handle on sales, payments, and inventory, often keeping track of everything in one place and at the same time. Features like the Tyl Portal help by providing visibility over transactions, invoices, and settlement history, and can help you find out when the busiest times are in your business. These insights are vital when it comes to refining your business model and gaining an understanding of issues such as staff numbers and what products are flying off the shelves, ultimately helping you maximise your profits.

1. Embed your business’ purpose in the community

With the role of business increasingly recognised in the fight against the climate crisis and social mobility, showing that you at least consider these factors in your business model is rapidly becoming a minimum expectation for many consumers and investors. However, the real growth and strengthening of customer relationships comes when you go that one step further, showing how your business’ commitment in these areas specifically improves life for the local community.

1. Diversify your payment methods

Bricks and mortar shops are an important brand building piece for retailers, but consumers want flexibility and choice in how and when they pay. With more ways of taking payments than ever before, like Tap to Pay and Buy Now Pay Later, it’s never been easier to give your customers a payment method that suits their spending habits and gives them more transparency over their finances. Adopt new ways to pay like payment links and QR codes to give your customers the most convenient shopping experience.

Download the full Evolving Enterprise Index report here.

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