In the Accountancy Age TV video this month (I recommend that you watch it) they discuss why the value of accountancy firms is falling – with some generating less than one times turnover.
The main reasons cited for this are:
– The predominance of “lifestyle” practices
– Poor quality staff – without the necessary skills and drive
– Poor management of WIP (possibly due to long standing client relationships)
– Succession issues
– The younger partners not interested in buying the firm
– Inadequate pricing plans
What is shocking is that these are not new issues – they have been known about for a long time. The fact that the recession did not jolt firms out of their complacency and old ways is really quite shocking.
PS On another matter entirely, interested to see that PricewaterCoopers finally changed its name to pwc – I remember the financial press suggesting this when they first merged all those years ago!