The transition to digital tax services will “change beyond recognition” the accountancy profession, according to the managing partner of one of Scotland’s oldest firms.

Phil Morrice ends 2017 having overseen the 150th anniversary of Glasgow-based Alexander Sloan, a business which has retained its independence in as sector of constant consolidation.

And Mr Morrice said that consolidation would likely continue, while he warned that firms which did not modernise faced going out of business.

Loading article content

“It’s because we move with the times that we survive,” he said. “If we were set in our ways, like lots of accountancy and legal firms are, they are the ones that end up not surviving.”

Mr Morrice said in its 150th year, the business has had a “reasonably good” performance, turning over around £2.5m – but he added that market conditions remained tough, and the firm was adapting to a changing world.

“The world of accountancy is changing beyond recognition,” he said. “Making tax digital coming in, the whole cloud-based services, and we’re moving into things like virtual financial services for clients.”

The Government’s making tax digital plan, which will see all tax returns for businesses filed online by 2020, reducing the requirement for tax return teams. This has forced accountants to diversify.

Virtual financial services is one such focus. “There are lots of SMEs who need a finance director but can’t afford one,” said Mr Morrice. “With IT nowadays you can provide that service remotely. If we were to go to medium-sized engineering company every day the cost to them would be huge, so they’d have to employ someone themselves, but they can’t afford either of those options.”

Instead, Alexander Sloan can manage the firm from its own office and visit once or twice a month. “That’s where we see the future,” he said. “Pretty much all our services are going to have to change. Making tax digital is going to transform services for business, you have to be on the front foot for that.”

Of the firm’s enduring independence, he said: “There have been opportunities over the years, firms have approached us; we’ve acquired firms ourselves, and basically each time we’ve weighed it up and we’d rather keep out independence”.

He added that the firm, which last made an acquisition more than a decade ago, was looking at potential targets again.

“We have had discussions, we’re always interested in what’s out there,” he said.

The firm has 50 staff, with 40 based in Glasgow, and the remainder in an Edinburgh office which was opened ten years ago. In March, David Jeffcoat was promoted to partner at the Edinburgh office, and Mr Morrice said: “We want to push on and grow that business, we see opportunities there, it is definitely a place with a lot of potential for growth.”

Mr Morrice said that as well as staff being attracted to a firm with such a rich heritage, clients also like it.

“We’ve got clients we’ve worked with for over 100 years and it is part of their tradition. Family business who have used Alexander Sloan as their accountant is part of who they are,” he said.

Many of these long-term clients joined staff from the firm at a civic reception held at Glasgow City Chambers to celebrate the 150 year milestone.

“It was brilliant, went extremely well,” said Mr Morrice of the event. “It is a magnificent building and everyone was just thrilled. It was great for staff, we wanted to focus that event on staff rather than just clients.”

The company’s website gives little away about the age of the company, contemporary branding deliberately portraying the business as one which operates in a digital world.

“We don’t want to fall into the trap of people thinking we’re an old-fashioned accountants,” he says. “If we were we wouldn’t be 150 years old because we’d have been swallowed up.”