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|Balancing the books: UK accountancy sector grows by 7.5% over 12 months|
|Friday, 27 November 2015|
Accounting and audit firms in the UK appear to heed their own advice on following best practice financial management processes, according to new analysis from Creditsafe, the world’s most used provider of company credit reports. Only 251 (approximately one percent) of accountancy firms in the UK have outstanding CCJs, while the value of outstanding CCJs is £501,761, compared to more than £31 million in the more risky construction sector.
Less than one per cent (0.64%) of active companies can be found in Creditsafe’s two highest risk bandings for the accountancy sector1. Two thirds (66%) of accountancy companies are classified as low risk with a further 22% classified as medium low risk.
Creditsafe’s analysis shows that the accountancy sector is also experiencing strong growth, with the number of accountancy and audit firms growing by 7.5% from 23,295 in July 2014 to 25,062 companies in July 2015.
As well as expanding in terms of number of firms, the accountancy sector is growing both business volumes and profitability. According to the latest update2 from the CBI, a third (33%) of business and professional services companies (including accountancy firms) reported an upswing in trading volumes over the previous quarter while 31% said they had increased profitability. This was the highest increase in profitability since November 2007, pre-financial crisis.
Rachel Mainwaring Operations Director of Creditsafe said: “Growth and higher profitability in the accounting sector are a reflection of the wider UK economic recovery since organisations across the whole business environment are more likely to succeed and require the services of professional accountants. The transparency agenda and constant regulatory change are also driving demand from professional accountancy services.
“However, while the risk of doing business with accountancy firms is low compared with other sectors, it still makes sense to check out their financial background as well as the background of their directors.”
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