Smaller accounting firms still scaling as large practices feel cost pressure, says BOSS
Announcement posted by BOSS Outsourced Accounting 08 Sep 2026
Key facts
- KPMG Australia reported FY26 revenue of $2.257 billion, down 1%, with Consulting down 16.9% while Audit & Assurance rose 11.0% and Tax & Legal rose 10.9%.
- IBISWorld valued Australian accounting services at about $35.2 billion in 2025-26, with revenue up only 0.6% in the latest year as inflation squeezed client budgets.
- Macquarie's 2026 Accounting and Financial Advice Benchmarking Study found average revenue growth of 12.9% a year among participating firms, median organic growth of 10.4%, and firms under $10 million growing at 11.3% versus 7.8% for larger peers.
- The same Macquarie cohort reported recurring revenue of 78% on average, with 41% of firms in a 30-39% EBITDA band.
- Rob Knights & Co's 2026 Typical Fees data put average net margins at 38.0% for CPA firms, 35.5% for CA firms and 33.8% for IPA firms, with fee increases of only 1.8-3.6% by designation.
- MYOB's Accounting Industry Monitor, reported by Accountants Daily on 30 July 2026, estimated AI and automation could add about $835 million in extra sector revenue in year one and about $4.8 billion over five years; 98% of firms using automation reported a revenue or profit lift.
Sydney, Australia - September 8, 2026
A two-speed market for Australian practices
The mid-year picture is not that accounting work has disappeared. Demand has become uneven. KPMG Australia's 24 August 2026 result showed tax, legal and assurance still growing while consulting contracted sharply. Management also warned that soft conditions and slower client investment could last into FY27 and beyond.
INTHEBLACK's May 2026 review of AFR Top 100 figures pointed the other way for many second-tier firms. BDO Australia, for example, lifted revenue 12.3% to $606.51 million in 2025. That pattern matches what partners in smaller firms already feel: mandated compliance still has pricing power, while discretionary advisory is slower and more contested.
Industry-wide growth of 0.6% can sit beside double-digit organic growth in a well-run sub-$10 million practice. The difference is usually mix, write-offs and how much partner time is trapped in low-margin work. That is the practical test of practice scaling 2026, not whether a firm copied a larger service mix.
What this means for firms
The mid-year evidence points to realisation, not a consulting rebuild. Fee lifts of under 4% will not hold a 30%+ margin if write-offs and salary inflation keep rising. Revenue growth alone also misleads: recurring income, profit per client and partner utilisation are clearer FY27 tests than top-line.
Firms still posting double-digit organic growth tend to keep senior time on review and client decisions, and they treat unprofitable work as a pricing problem rather than a volume target. Extra capacity only helps after that mix is clean. Adding overhead first usually widens the cost base faster than fees.
Some practices are looking at dedicated offshore capacity and the steps in how firms prepare work for outsourcing so compliance throughput does not sit on partner desks. That is an operating choice, not a substitute for deciding which clients stay.
"The firms growing under $10 million are not winning because the market is easy. They are winning because they refuse to fund unprofitable work with partner overtime. Extra capacity only helps if it protects margin and leaves principals free for review and client conversations."
Peter Vickers, Managing Director - Australia, BOSS Outsourced Accounting
BOSS comment
BOSS Outsourced Accounting has supplied experienced offshore accountants to Australian firms since 2004. The firm is commenting because this split shows up first in the compliance queue: practice scaling 2026 stalls when production work consumes the people who should be pricing, reviewing and deciding which clients stay.
That is an operating view from capacity work inside Australian practices. It does not replace partner judgement on advisory work. More on BOSS' operating model is on Services & Solutions.
Frequently Asked Questions
Why are smaller Australian accounting firms growing faster than larger ones in 2026?
Macquarie's 2026 benchmarking found firms under $10 million recorded median organic growth of 11.3%, compared with 7.8% for larger peers. Smaller practices often have a higher share of recurring compliance, faster pricing decisions and less exposure to soft consulting demand.
What do KPMG Australia's FY26 results mean for mid-tier firms?
KPMG Australia's overall revenue fell 1% to $2.257 billion, with consulting down 16.9% while audit and tax grew about 11%. That split suggests mid-tier and smaller firms can still grow if they stay close to mandated compliance and do not over-build discretionary consulting in a cautious market.
Are Australian accounting firm profit margins still healthy?
Where cost control is tight, yes. Macquarie reported 41% of benchmarked firms in a 30-39% EBITDA range, and Rob Knights' 2026 Typical Fees data showed average net margins of 38.0% for CPA firms, 35.5% for CA firms and 33.8% for IPA firms.
What does the 2026 two-speed market mean for practice scaling?
Practice scaling 2026 is less about adding service lines and more about realisation. Firms that clean unprofitable work and keep partner time on review are still posting double-digit organic growth beside industry-wide growth of 0.6%.
Can automation replace the need for extra accounting capacity?
MYOB modelling reported in July 2026 suggested AI and automation could add hundreds of millions in sector revenue if firms redirect time into higher-value work. Most practices still need people for review, exception handling and complex Australian compliance, so tools and capacity usually work together.
What should partners measure if revenue growth alone is misleading?
Recurring revenue share, profit per client, write-off rates and how much partner time sits in review versus production give a clearer view of whether growth is worth keeping.
For more detailed analysis, real-world examples, and additional strategies, see these resources from BOSS Outsourced Accounting:
Profit Margins & Cost Management
About BOSS Outsourced Accounting
Australian accounting firms are increasingly engaging outsourced accountants and bookkeepers to secure skilled resources without the delays associated with traditional recruitment. These professionals offer rapid turnaround, in-depth expertise in Australian tax legislation and accounting software, and the ability to be onboarded within a week—enabling firms to scale efficiently during peak periods.
For more information, visit:
Why Choose BOSS for Offshore Accounting?
Media Contact
Lee Court
Client Relations
BOSS Outsourced Accounting
Phone: 1800 889 232
Email: lee@boz.com.au