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Nearly half (49%) of UK accountancy firms are facing “huge blows” to their growth amid an ongoing skills and salary war that is “raging” across the sector, according to new research from IRIS Software Group (IRIS)

It comes as KPMG found that many firms have been “hit hard” by labour shortages, with many forced to turn work away due to a lack of staff, while IRIS’s own research found that 32% of firms cite the current skill set of talent in their firm as a barrier to growth in the next 12 months writes Heather Sandlin in Accountancy Today

IRIS surveyed British accountancy firms to help “uncover the state of the profession as demands on their time increase as they play a vital role in helping businesses get back on their feet and boost the economy”. 

Its research found that nearly one in five firms did not want to grow any fee-paying areas over the next 12 months, however, with 23% citing a lack of time and skill to market the business within the firm as the main reason why they aren’t looking to expand. 

Jim Scott, MD for accountancy at IRIS, said: “While technology is vital to driving growth, it will never replace the insight and guidance an accountant can provide businesses. They are the forgotten heroes of the pandemic. 

“Yet the number of firms being affected by the skills shortage is eye opening and this is only being exacerbated by the “Great Resignation”. It is truly an employee’s market. The industry must do more to support firms in listening intently and working with teams to create a culture with flexibility and hybrid working at its heart to attract and retain the best talent.”

Edited

Tel Aviv has been named as the most expensive city in the world to live in, as soaring inflation and supply-chain problems push up prices globally.

The Israeli city came top for the first time in a survey by the Economist Intelligence Unit (EIU), climbing from fifth place last year and pushing Paris down to joint second with Singapore.

Damascus, in war-torn Syria, retained its place as the cheapest in the world.

The survey compares costs in US dollars for goods and services in 173 cities.

The EIU said the data it collected in August and September showed that on average prices rose 3.5% in local currency terms – the fastest inflation rate recorded over the past five years.

Transport has seen the biggest price increases, with the cost of a litre of petrol up by 21% on average in the cities studied.

Tel Aviv’s climb to the top of the EIU’s World Cost of Living rankings mainly reflected the soaring value of Israel’s currency, the shekel, against the dollar. The local prices of around 10% of goods also increased significantly, especially for groceries.

The survey found Tel Aviv was the second most expensive city for alcohol and transport, fifth for personal care items, and sixth for recreation.

Tel Aviv’s mayor, Ron Huldai, warned in an interview with the Haaretz newspaper that rising property prices – not included in the EIU’s calculations – meant the city was heading towards an “explosion”.

“Tel Aviv will become increasingly more expensive, just as the entire country is becoming more expensive,” he said.

“The fundamental problem is that in Israel there is no alternative metropolitan centre.

In the United States, there is New York, Chicago, Miami and so on. In Britain, there’s Greater London, Manchester and Liverpool. There you can move to another city if the cost of living is too onerous.”

Last year, Paris, Zurich and Hong Kong shared joint first place in the EIU’s survey. Zurich and Hong Kong were fourth and fifth this year, followed by New York, Geneva, Copenhagen, Los Angeles and Osaka.

Tehran climbed the most in the rankings, jumping from 79th to 29th, as US economic sanctions continued to cause shortages of goods and rising import prices in Iran.

The EIU said the rankings continued to be sensitive to shifts brought about by the coronavirus pandemic.

“Although most economies are now recovering as Covid-19 vaccines are rolled out, the world’s major cities still experience frequent surges in cases, prompting renewed social restrictions. In many cities this has disrupted the supply of goods, leading to shortages and higher prices.”

It added: “Fluctuating consumer demand has also influenced purchasing habits, while investor confidence has affected currencies, further fuelling price rises.”

The EIU said it expected price rises to moderate over the coming year as central banks cautiously increased interest rates to stem inflation.

Source BBC

BDO’s latest PCPI index revealed that deal volumes in the first three quarters of 2021 exceeded the total for 2020, “confirming market recovery” writes Jaskeet Briah in Accountancy Today

Deal volumes surpassed pre-pandemic levels with a 69% rise in the first three quarters of 2021, BDO’s latest PCPI Index revealed. 

Deal volumes were up 22.5% in Q3 and they also exceeded pre-pandemic levels, up 15% and 18% on 2018 and 2019 respectively. 

BDO said the increase was reflected equally across trade and private equity activity, with trade volumes rising by 22.7% to 622 deals, and private equity transactions by 21.2% to 103 deals.

Deal volumes in the first three quarters of 2021 exceeded the total for 2020 and the full year result is expected to be “one of the strongest seen for years”, said BDO.

Additionally, deal volumes reportedly strengthened in Q3 as activity “intensified”. Trade multiples settled again on 10.6x compared to 10.2x in Q2, while private equity multiples increased to 12.4x from 11.8x in Q2. 

The FTSE All-Share Index reportedly climbed higher with a multiple of 18.0x, “reflecting the positive forward-looking profit expectations of the stock market”.

Roger Buckley, M&A partner at BDO, said: “The recovery of markets and volume of money in the marketplace continue to drive both trade and private equity M&A activity. Times of change create opportunity and we’re seeing an incredibly active M&A market and a competitive environment for buying. 

“Quoted companies, large private entities, PE and debt markets are all open for transactions as they seek to grow on a non-organic basis, reposition their businesses post-pandemic and consolidate marketplaces.”