If you don’t take an interest in the accountancy world, you might not have heard KPMG’s recent announcement that they’re attempting to corner the SME market.
It’s been labelled a disruptive move by industry commentators; the Big Four firm claimed, in what some have interpreted as supreme hubris, that they will offer the same level of service as smaller accountancy firms but at a better price. Or in their own words: “you can pay us the same as your current accountant, but we’ll give you more”
You might assume that such a large organization, whose motto is “cutting through complexity”, would sniff at the SME market, instead dealing with huge multinationals whose accounts meet that degree of complexity. But you’d be wrong, they’ve historically put more focus on SMEs. According to Iain Moffatt, KPMG’s UK head of regions, the firm already has a significant revenue stream from smaller businesses. It accounts for 35% of KPMG’s revenue (£600-700m).
In Moffatt’s eyes, KPMG are the white knights riding to the rescue of SMEs over the country. “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.” They’ve got massive resources, not least thanks to a 10-year strategic partnership with McLaren Applied Technologies’ (‘MAT’).
The response from accountancy firms across the country was defiant and unequivocal: don’t tread on our toes!
And there are myriad reasons why the firm’s promise seems like wishful thinking:
- It’s hard to believe that many of the small-budget clients will get the same service as can be delivered in a small firm. Surely, the one man bands of this world will be lost in the crowd!
- There is a fear that KPMG will use under- or non-qualified advisers who could damage the reputation of the accountancy industry if they provide a poor service.
- KPMG may well be out of touch with SMEs who in turn might view the firm with animosity given the big auditors’ role in signing off bank’s accounting.
KPMG have responded to this speculation strongly. Bivek Sharma, who is in charge of the small business accountancy proposition said:
“This is not something that we’ve just gone out with and said were going to do and were going to get it horribly wrong.
“We’ve been testing and trialling it for a year and a half really nailing down the processes before we go to market on this. We’re are a Big Four firm and we are not going to do anything that causes reputational risk.”
So Accoutancy Age asked their readers whether they thought the firm would be able to compete with high street businesses: the vast majority of those surveyed (77%) said no.
If you want to have your say, you can take the poll here.
We can’t say this without sounding biased so we’ll just say it: we believe that our tax advisory services to startups and SMEs . We’ve been accountants in Manchester for nearly 40 years with good reason.