KPMG has announced this month that its Small Business Accounting (SBA) unit, launched in 2014, will be closing.
A KPMG spokesperson has said that the company is “proposing to withdraw the provision of our Small Business Accounting (SBA) service in the UK, which offers cloud-based bookkeeping to small and micro-businesses”. KPMG said it is contacting existing SBA customers to inform them of this decision and has reportedly informed these customers that they will continue to receive support whilst they seek an alternative arrangement.
Some reports showed that the unit was facing closure as early as last autumn.
Why has KPMG’s Small Business Accounting unit closed?
It would appear that heavy subscription fees have made it hard for KPMG to gain traction in the small business accountancy market.
KPMG’s Small Business Accounting unit was launched in 2014 with hopes of disrupting and dominating the market, which was predominantly made up of high street firms and small to medium-sized accountancy practices.
According to the SBA website, one of the more typical packages will set you back by about £425 a month. This includes accounting and bookkeeping, as well as services relating to tax, payroll and compliance. This package also includes a subscription to cloud-based accounting software Xero.
Nowadays, the compliance side of accountancy is fading. An accountant is no longer a person who sits in a room, number-crunching – the software can do this for us now. In light of this, businesses are looking for their accountant to provide them with that extra edge and, in many cases, this tends to be via the provision of advice pertaining to business growth and development. Likewise, a level of proactivity might be expected from the modern accountant; perhaps he doesn’t just track your tax liabilities, but actively seeks out ways in which he can reduce them. Already, therefore, this particular package seems only to focus on the “skin and bones” compliance side of accounting, in a world where businesses are beginning to expect far more than this from a modern accountant.
When the scheme was first set up, it was agreed that all accountants would be based in the UK and that each and every client would have their own designated account manager. Understandably, customers and accountants alike viewed KPMG’s new venture with a distinct level of scepticism. With expensive salaries and city centre offices to fund, many struggled to see how KPMG would match the sorts of prices offered by other firms in the market.
As the service matured, reports showed that some customers were unhappy with the service that they had been receiving. The main complaints were what you’d expect: their accountant had no understanding of their business; mistakes were made far too frequently; and their account manager was changing every few months. These are exactly the sort of teething problems that a large firm like KPMG would find almost unavoidable when trying to conquer the small business market. It shows that big firms just aren’t the answer for small businesses.
Small businesses don’t want red tape, hold music and the impersonal, number-in-a-system approach of large corporations. Small businesses want real advice from someone they trust and who knows their business inside and out. With that in mind, KPMG’s Small Business Accountant (SBA) offering was probably doomed from the beginning.
Small Business Accounting with Phebys
At Phebys Accountants, we tailor our packages towards small and medium-sized businesses. Our scalable packages, including the newly-introduced MTD Solo aimed specifically at freelancers, provide you with a designated and committed account manager, as well as real, honest and trustworthy advice, not just with respect to compliance, but on how you can grow your business and achieve your goals.
To find out more, call Phebys Accountants today on 01480 896267, or email firstname.lastname@example.org.