Top 50+50 Accountancy Firms 2023: Firms report total fee income growth amid market volatility
Mid-market firms experience largest percentage increase in fee income in 2023, as consultancy services start to become leading income streams for the UK accounting sector
Brought to you in partnership with Source Advisors, previously known as GovGrant in the UK.
Total fee income across the UK’s top accounting firms grew in 2023, with mid-market firms experiencing the greatest percentage increase, according to Accountancy Age’s 2023 50+50 data.
In this year’s rankings, in partnership with Source Advisors, previously known as GovGrant in the UK, the average total fee income across the top 100 firms was £224.28 million, up from £205.51 million in 2022.
For the Big Four, this jumped to an average of £4.27 billion, up from £3.75 billion the year prior. Unsurprisingly, the Big Four dominated in monetary terms. EY saw its fee income increase by over £1 billion, the largest jump among the accounting giants; KPMG came in second.
However, it was the mid-market that exhibited the largest proportional gains. Shaw Gibbs’ fee income increased from £8.37 million in 2022 to £21.15 million in 2023, a significant increase of approximately 152.69%.
It was closely followed by TC Group whose fee income rose from £36.70 million in 2022 to £68.00 million in 2023, an increase of around 85.29%.
AAB Group also experienced a significant increase in fee income from £42.62 million in 2022 to £77.00 million in 2023, a growth of about 80.67%
Among the top 25 firms, excluding the Big Four, fee income jumped to £232.4 million from £204 million in 2022.
Source of income
The 50+50 also gathers information on where fee income is generated within firms – focusing on core business areas including audit, tax, and consultancy.
In 2023, accountancy practices generated substantial revenue growth from advisory and consultancy services – on average, the top 100 firms generated £74.6 million in fees. In 2022, Audit was the source of the largest share of fees at £57.14 million.
Among the Big Four, consultancy fee income averaged £1.3 billion. This drops to £11.28 among the top 25 when excluding the advisory giants from the rankings.
With high inflation, rising interest rates, recession worries, etc. businesses likely sought guidance from accountants on strategic planning, cost control, cashflow management, and adapting to the shifting landscape.
For accountancy firms seeking to capture greater value, current disruption signals a lucrative window to double down on consulting-based offerings and better support clients through change management.
Specifically, in 2023 there was high demand growth for guidance on strategic planning within inflationary environments, talent retention policies amid labour shortages, global tax reform structuring, and technology implementation.
DNS Accountants, 77th in the 2023 rankings, reported a 100% increase in fee income from its consultancy arm in 2023. They were followed by Harris & Trotter (54%), Sedulo Group (48.8%) and Hazelwoods (38.5%).
Audit remained a core source of income for firms in 2023, averaging £66.3 million. Among the Big Four, Audit bought in an average of £971 million.
With ongoing changes to accounting standards in areas like leases, financial instruments, and revenue recognition, audits now involve assessing more judgmental estimates and disclosures. This growing complexity translates into higher fees.
2023 also started to see IPO activity rebound after a relatively subdued couple of years, as over 850 companies went public globally. Each listing requires a financial statement audit, directly driving more work for audit firms.
AAB group, which ranked 21st in the 2023 rankings up from 26th in 2022, recorded the highest percentage increase in fee income from audit at 98%. They were followed by Wilson Partners (97%), Sedulo Group (54.7%) and Hentons (50%).
Audit was followed by tax (£51.5 million), corporate finance (£27.89 million), insolvency and restructuring business (£26.94 million), and payroll (£20.74 million).
Tax appears to be where fees are dropping for a large share of firms. WRG partners reported a 10% drop in tax fee income with a 33% increase in consultancy fees. Similarly, RPG Crouch reported a 7.5% decrease in tax fee income, but a 26% increase in audit fees.
