Why has the number of women establishing accountancy firms fallen?

We speak to female accountants about the pros and cons of business ownership, and barriers to entry.

New research by Instant Offices identifies a significant drop in the number of women who set up their own accountancy businesses in 2022 compared to 2021. The Instant Office research, which analysed Companies House data, found that just 12% of accounting and auditing businesses were set up by women last year, compared to 22% in 2021.

The implications of this research are unexpected when lined up next to other industry-focused statistics. For example, the Women in Finance Charter shows improvement in the number of women in senior roles, with a 35% increase during 2022. Of course, these statistics look at different things so are not directly comparable, but it’s still interesting to look at the wider trends in the market.

We spoke to female accountants – including business owners – to hear about their experience in accounting.

Industry needs to empower and encourage women

Eva Mrazikova, Senior Manager, Accountancy Sales, IRIS Software Group

Running your own accountancy firm has many advantages and is very rewarding. But that is only one of the many hats that women must wear: typically, we are also ‘running’ families.

One of the reasons I went into accountancy was the flexibility. Raising a family in a foreign country away from my support network, I knew I needed a certain amount of flexibility to be able to have a family and a fulfilling working career.

The issue arises if you, as a practice owner, become the indispensable person the business can’t function without. Deadlines and client needs don’t account for a sick child, for example.

Unfortunately, in many UK accountancy firms there is still a gender bias with women seen as “part-timers”, so we can’t be good managers or partners.

In my experience, setting up a business is easy. It’s working with biases afterwards that can be challenging.

The industry needs to empower and encourage women who want to set up their own accountancy firms. Help and support them to be more confident and assertive in their abilities. But equally, educate wider society about the additional challenges that woman as practice owners have outside of running firms. Let’s not be apologetic for running a successful business and having a family at the same time.

Verdict: Gender bias across accountancy firms is still prevalent – the industry needs to empower and encourage women into setting up their own business while educating wider society too.

Lower number of women founders suggests a talent pipeline issue

Liza Robbins, Chief Executive, Kreston Global

These are clearly very disappointing results. Anecdotally however, we are not observing a disproportionate number of men compared to women entering the accounting sector in the UK. The lower number of women starting their own accountancy firms suggests a talent pipeline issue, with fewer women reaching top positions.

Historically, there has been insufficient support for women in accounting, including limited flexibility, mentorship, underdeveloped return-to-work programs and inadequate familial support schemes, which are prevalent across various sectors.

Therefore the diminished talent pool of women in leadership roles may explain why fewer women are venturing into founding their own accounting firms. While not all accounting entrepreneurs need prior leadership experience to succeed, this is a well-trodden path that has traditionally been less accessible to women.

Additionally, women often face more challenges securing funding and experience higher loan charges compared to male entrepreneurs.

The focus on addressing the lower number of women setting up accountancy firms should be on accommodation and amplification. How can we better accommodate female careers through initiatives like pay equity, inclusive policies, returnship programs, and flexible work arrangements?

We also need to amplify the community of exceptional women in accounting through mentorship, networking, and tailored leadership programs. This would provide women with the necessary network, inspiration, and resources to support transitioning their accounting technical skills and business management expertise into entrepreneurial endeavours.

Verdict: It’s a talent pipeline issue – there needs to be better leadership support for women throughout their careers.

Mentoring programmes would boost confidence and capabilities

Kat Wellum-Kent, Founder, Fractional Finance

As a female founder, I am surrounded by many other female founder circles. I’m always hearing about new female-led firms and meeting new female leaders, so to see that the numbers have dropped was a shock.

However, I haven’t noticed a decline in the number of women wanting to set up: it’s more that they are taking their time to do so – and that’s no bad thing. Setting up on your own is more than just a name and a logo and hoping it works out. Many founders want to know not only what their company looks like but to ensure its core purpose and values are ingrained within the company’s fibre before it goes to market.

In my experience, people have made frustrating assumptions around my reasons for starting a business – assuming I did so because I wanted something to fit around my family. I felt it meant people thought my business had limitations because I was a working mum – this isn’t an assumption male founders would need to manage.

When starting out, I found a lot of practical guides on business regulation, but there wasn’t a lot on the psychological side of starting a business. That’s where there’s a real gap in the market for support.

I’d like to see mentoring programmes with female founders matched up to female experts in the field. They’d be able to provide experienced insight into how to get through those tougher days that we all have as business owners.

Verdict: I’m surrounded by other female founders so I haven’t noticed a decline – but mentoring programmes matching female founders with female experts would boost confidence and capabilities enormously.

Annie Makoff is a freelance journalist and editor.