The accountancy and allied services market exhibits strong seasonal patterns, with turnover peaking around March, June, and September/October each year. The market has seen steady growth over the long term, with turnover increasing by around £6 million per month. However, trend data from recent years points to a slowdown in the market even before the Brexit vote, with turnover declining in early 2016 compared to the previous year. Price inflation in the market has also fallen, which may increase competitive pressure on firms.

1. Trends in the
Accountancy
and Allied
Services Market
July 2016
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Coventry, CV5 7LH
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2. The Accountancy and Allied Services Market
1
© IRN Research 2016
IRN Research
60 Eastern Green Road
Coventry CV5 7LH
UK
E-mail: info@irn-research.com
URL: www.irn-research.com
___________________________________________________________________________
About IRN Research
IRN Research (trading name of IRN Consultants Ltd) was formed in 1991 and has a strong track record in
providing market research services to the professional services sectors. IRN is a full-service research
agency with research capabilities from small-scale research requests to large-scale international
projects. We utilise a range of research techniques, e.g. desk research, telephone/online surveys, face-
to-face interviews, focus groups, and can provide a full results analysis.
We undertake a wide range of research for professional services firms including:
 Customer Experience Research: We use a range of research techniques and questions to
understand what your customer thinks of your company and brand and what drives such
perceptions.
 Customer Segmentation: We identify and assess how to target customer sub-groups, using a
variety of data including attitudinal and usage information plus consumer demographic and
business structure data.
 Market Understanding: We seek to understand the market you operate in by running usage and
attitude (U&A) surveys and undertaking desk research to come to a clear understanding of your
customer’s needs and potential growth opportunities.

3. The Accountancy and Allied Services Market
2
Table of Contents
ABOUT IRN RESEARCH................................................................................................................................... 1
INTRODUCTION............................................................................................................................................... 3
AIMS OF THIS REPORT.........................................................................................................................................................................3
EXECUTIVE SUMMARY .................................................................... ERROR! BOOKMARK NOT DEFINED.
SUMMARY INFOGRAPHIC .................................................................................................ERROR! BOOKMARK NOT DEFINED.
KEY FINDINGS.....................................................................................................................................................................................3
THE LONG VIEW .............................................................................................................................................. 4
MARKET GROWS BY AROUND £6 MILLION PER MONTH ..............................................................................................................4
WITH VALUE ADDED RISING £39 MILLION PER QUARTER ..........................................................................................................4
IT’S A MARKET WHERE PRICES INCREASES HAVE FALLEN IN RECENT QUARTERS.ERROR! BOOKMARK NOT DEFINED.
A HIGHLY SEASONAL MARKET..................................................................................................................... 6
THE TREND CYCLE POINTS TO A SLOWDOWN IN THE MARKET .................................................................................................8
APPENDIX .........................................................................................................................................................10

4. The Accountancy and Allied Services Market
3 | P A G E
INTRODUCTION
Aims of this report
This is the second free report on the accountancy market released by IRN Research as part of
our wider review of the UK professional services market. Our report The Accountancy and Allied
Services Market (available on our website) looked at the structure of the market and
considered how the market is changing and would progressive in a post-Brexit world.
This brief looks more closely at the long-run and short run trends in the accountancy market in
terms of the revenues generated and its output. In particular, it shows the degree of seasonal
influences on the market.
For the purposes of this report, the accountancy and allied services market is taken to consist of
firms engaged in three types of activities:
 Accounting and auditing activities – representing the bulk of the market
 Bookkeeping activities
 Tax consultancy
Key findings
 The accountancy market exhibits a very strong seasonal pattern to its turnover. Firms in the
market need to bear this in mind when considering their short-run business performance.
 The market is subject to strong peaks of business around March, June and Sept/Oct followed by
troughs in April/May, August and November.
 There are strong underlying trends in evidence in the market that drive the long-term
performance of firms. These long-term trends are strongly influenced the performance of the
UK economy as a whole.
 The underlying trend data points to the market experiencing a significant slowdown in business
prior to the Brexit vote.

5. The Accountancy and Allied Services Market
4 | P A G E
THE LONG VIEW
This section reviews the long run trends for accountancy turnover and the output of the accountancy
market.
Market grows by around £6 million per month
The figure below shows the monthly turnover of accountancy and allied services firms between 1988
and 2016 on a non-seasonally adjusted basis. There is a clear upward trend in turnover, with the average
trend over this period indicating that turnover in the industry rises, on average, by around £5.6 million
per month, or around £67 million per year.
Source: ONS/IRN Research
With value added rising £39 million per quarter
Another key indicators of the health of the profession is the change in value added. The Figure below
shows the output of the accountancy and allied services industry, measured in seasonally-adjusted value
added terms. Value added measures turnover less bought-in goods and services. This figure outlines the
economic output contributed to the UK economy by the profession over time. The Figure show the
quarterly movements in the gross value added (GVA) of the profession on both a current prices and a
£500
£700
£900
£1,100
£1,300
£1,500
£1,700
£1,900
£2,100
1998JAN
1998JUN
1998NOV
1999APR
1999SEP
2000FEB
2000JUL
2000DEC
2001MAY
2001OCT
2002MAR
2002AUG
2003JAN
2003JUN
2003NOV
2004APR
2004SEP
2005FEB
2005JUL
2005DEC
2006MAY
2006OCT
2007MAR
2007AUG
2008JAN
2008JUN
2008NOV
2009APR
2009SEP
2010FEB
2010JUL
2010DEC
2011MAY
2011OCT
2012MAR
2012AUG
2013JAN
2013JUN
2013NOV
2014APR
2014SEP
2015FEB
2015JUL
2015DEC
2016MAY
Long-run trend of turnover of accountancy and allied services companies
Turnover (£m) Long-run time trend

6. The Accountancy and Allied Services Market
5 | P A G E
“chained volume” basis. Chained volume is a measure of GVA in constant price terms (price inflation is
removed) where the constant price (or volume estimates) have been linked (or chained) together.
On average, over the 1997 to 2016 period, GVA in constant prices rise on average by around £38 per
quarter or £152 million per year, while GVA in constant prices rises, on average, by around £34 million
per quarter or £136 million per year.
GVA is, therefore, rising faster than turnover, indicating that accountancy and allied services firms are
increasing their purchases of bought-in products and services at a slower rate than they are increasing
their sales.
The Current Price (CP) and Chain Volume Measures (CVM) figures are produced independently and as such
comparisons between the two can sometimes be misleading.
Source: ONS/IRN Research
The underlying longer-run trends in the market reflect the overall performance of the UK economy. The
accountancy market, over the long-run, tends to move in tandem with the UK economy.
£1,500
£2,000
£2,500
£3,000
£3,500
£4,000
£4,500
£5,000
1997Q1
1997Q3
1998Q1
1998Q3
1999Q1
1999Q3
2000Q1
2000Q3
2001Q1
2001Q3
2002Q1
2002Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1(est)
Gross Value Added in current and constantprice terms (£m)
GVA in pounds millions at current prices
GVA in pounds millions chained volume measure (constant prices)

7. The Accountancy and Allied Services Market
6 | P A G E
A Highly Seasonal Market
A characteristic of the accountancy and allied services market is the strong seasonal influences on
business. A look at the turnover of firms over the past three years shows the very strong peaks of
business around March, June and Sept/Oct – no doubt influenced by the start of the financial year in
April, the timing of company year ends and possibly self-assessment deadlines- followed by troughs in
April/May, August and November.
Source: ONS/IRN Research
The accountancy market exhibits a multiplicative pattern of seasonality in terms of turnover. The
turnover (TO) of the industry is made up of three components:
St: The seasonal component
Tt: The trend-cycle component
Et: The error, or irregular component.
in the following way
TO = St*Tt*Et or Log(TO)=Log(St)+Log(Tt)+Log(Et)
The trend cycle data presents a better view of the performance of the industry over time than does the
raw data. The figure below showing the trend-cycle data and its linear trend indicates the boom and
bust phases for the profession. Not surprisingly, the biggest bust phase (Trend/Cycle is below trend)
came between December 2007 and April 2010, followed by a strong boom recovery phase from April
£1,500
£1,600
£1,700
£1,800
£1,900
£2,000
£2,100
£2,200
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
The seasonal pattern of accountancy tunrover
2013 2014 2015 2016

8. The Accountancy and Allied Services Market
7 | P A G E
2010 to January 2012. Since then the profession has seen its cyclical activity die down somewhat and it
has been close to its trend, although the start of 2016 was below trend.
Source: IRN Research
A similar pattern is in evidence comparing actual turnover with the seasonal pattern of sales
£500
£700
£900
£1,100
£1,300
£1,500
£1,700
£1,900
£2,100
£2,300
1998JAN
1998AUG
1999MAR
1999OCT
2000MAY
2000DEC
2001JUL
2002FEB
2002SEP
2003APR
2003NOV
2004JUN
2005JAN
2005AUG
2006MAR
2006OCT
2007MAY
2007DEC
2008JUL
2009FEB
2009SEP
2010APR
2010NOV
2011JUN
2012JAN
2012AUG
2013MAR
2013OCT
2014MAY
2014DEC
2015JUL
2016FEB
Actual Turnover vs Trend/Cycle
Actual Trend/Cycle Linear trend of trend/cycle
ABOVE BELOW ABOVE BELOW ON TRENDABOVE

9. The Accountancy and Allied Services Market
8 | P A G E
Note: the seasonal data includes the trend/cycle and irregular component
Source: IRN Research
The trend cycle points to a slowdown in the market
Looking at the recent pattern of sales indicates that the accountancy market is undergoing a slowdown
in its business. Since the start of 2016, the rate of growth in turnover compared with the same period of
2015 has been negative or zero for the trend/cycle, although the worst of the downturn seemed to take
place in January and February 2016. However, it is worrying that trend turnover was slowing even
before the Brexit vote threw the UK’s economic situation into some doubt.
£500
£700
£900
£1,100
£1,300
£1,500
£1,700
£1,900
£2,100
£2,300
1998JAN
1998AUG
1999MAR
1999OCT
2000MAY
2000DEC
2001JUL
2002FEB
2002SEP
2003APR
2003NOV
2004JUN
2005JAN
2005AUG
2006MAR
2006OCT
2007MAY
2007DEC
2008JUL
2009FEB
2009SEP
2010APR
2010NOV
2011JUN
2012JAN
2012AUG
2013MAR
2013OCT
2014MAY
2014DEC
2015JUL
2016FEB
Actual Turnover vs Seasonally Adjusted Turnover
Actual Seasonally Adjusted

10. The Accountancy and Allied Services Market
9 | P A G E
Source: IRN Research
4.6%
5.6%
6.9%
5.4%
6.8%
-4.0%
6.6%
-3.0%
-1.9%
-1.4%
-2.8%
3.3%
4.3%
6.0% 5.8%
5.4%
4.8%
3.7%
2.4%
0.9%
-0.4% -1.4% -1.6% -1.3% -0.7% 0.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2015
MAY
2015
JUN
2015
JUL
2015
AUG
2015
SEP
2015
OCT
2015
NOV
2015
DEC
2016
JAN
2016
FEB
2016
MAR
2016
APR
2016
MAY
Annual growth in turnover (% change on same month of preceding year)
Actual Trend/Cycle

11. The Accountancy and Allied Services Market
10 | P A G E
One of the factors that may have led to a slowdown in sales recently is a decline in inflation within the
market. This in itself could point to growing pressure on firms to attached business, leading to pressure
to lower prices or not increase them significantly.
The Services Producer Price (SPP) Inflation for accountancy and allied services provides a measure of
inflation for the market. It is constructed from a statutory quarterly survey which measures changes in
the price received for accountancy services provided by UK businesses to other UK businesses and
government. The inflation index is calculated on a “business to business” basis. This means that only
transactions between UK businesses and other UK businesses or government are included. Sales made
to customers outside of the UK or to members of the public are excluded. Given that most UK
accountancy services are supplied to the domestic market and businesses are the prime purchases of
accountancy services, this presents a good view of price inflation in the market. The SPP index numbers
exclude VAT and are not seasonally adjusted.
Between Q1 2010 and Q1 2016, producer prices rose by 15%. There were especially large rises in prices
between Q3 2014 and Q2 2015, since when inflation has dropped back. The rate of inflation peaked
around 4% at the start of 2015 but has fallen back to around 2% in early 2016.
* Inflation is measured on an annual basis – i.e. the percentage change in the SPP index in one quarter
compared with the same quarter of the previous year.
Source: ONS/IRN Research
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
95
100
105
110
115
120
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
%inflation
Index
Index number of producer prices andannual inflation*
Price Index, 2013=100 Annual price inflation

12. The Accountancy and Allied Services Market
11 | P A G E
Appendix
To calculate the trend cycle and seasonally adjusted series, IRN Research used the 13ARIMA-SEATS (X-
13A-S) seasonal adjustment software developed by the U. S. Census Bureau in collaboration with the
Bank of Spain. This is the seasonal adjustment software currently used by the US Census Bureau and the
Office for National Statistics.