KPMG To Take On High Street Accountants
KPMG has made headlines in the accountancy world by announcing a very generous promise to the UK’s many SMEs: “you can pay us the same as your current accountant but we’ll give you more”.
It’s a disruptive move from the Big Four firm, who as well as making a lot of enemies very quickly are intending to get as much use out of their £40m investment in a new enterprise programme, which includes cloud-based accountancy support for small businesses.
What will this mean for SME firms like Manchester’s Alexander & Co accountants? John McCaffery, a tax partner with the firm, said: “While KPMG have a sophisticated infrastructure to draw on, we imagine that smaller clients will not get as personal and bespoke a service as they might from a local SME firm.” Either way, it’s a worrying prospect that small businesses could face a more uncertain future.
Iain Moffatt, KPMG’s UK head of regions, declared how much of a change this was for the organisation: “This is the biggest investment KPMG has made in the SME market in the past 30 years. The small business accounting platform allows us to enter a market that we haven’t previously had access to.
“It’s a transformational change in our business. For the first time, a Big Four firm can offer services to start‐ups and small businesses for a similar price as high-street accountants.”
Contrary to the common perception of the Big Four, they do make a lot of money from smaller businesses. Apparently, over a third (35%) of KPMG’s revenue (£600-700m) comes from this area of the market.
Moffatt has also made a scary prediction: that in the near future Google or Amazon, rather than big accountancy firms, will threaten the security of the Big Four. It makes sense: Google particularly seem to be making forays into every sector they can, and managing businesses’ finances and even tax seems like a logical step.
Moffat explained that Google and Amazon’s focus on data would make them potential contenders: “The reason I say that is because today, our profession is all about data. The more data you have, the more powerful you are. With big data you can create more effective KPIs, better benchmarking, and more accurate insights. That’s the secret. That’s what the future holds.”
Last November, KPMG began a 10-year strategic partnership with McLaren Applied Technologies’ (‘MAT’), the aim of which is to combine the latter’s expertise in predictive analytics and the former’s superior knowledge of auditing and consulting.