New company size thresholds: Accountants, get ready 

In line with EU legislation, the thresholds that determine a company’s size (and financial obligations) have changed in Ireland. This brings a welcomed cut in red tape for your small business clients, and some considerations for you, as their accountant. 

In this article, we explain what changes are coming and when, how they’ll affect companies, and the opportunities to look out for. 

What are the new company size thresholds for Ireland? 

To account for inflation, the new law (Adjustments of Size Criteria for Certain Companies and Groups) increases thresholds for “micro”, “small”, “medium”, and “large” companies in the Companies Act 2014 by around 25%. 

This took effect on 1 July 2024 and the new thresholds will apply for financial years from 1 January 2024.  

Companies have had the option to apply the thresholds (before they were mandated) since 1 January 2023. 

The changes are based on 2 criteria: net turnover and balance sheet total. The average number of employees for each category stayed the same.  

What this means for your clients 

With the broadening of the thresholds, your clients may shift into different categories, changing how much information they need to disclose in their annual financial statements, and whether they need to conduct a statutory audit.  

More companies will shift into “micro” and “small”, so they’ll be able to file abridged (instead of full) financial statements at the Companies Registration Office and will become exempt from audits. 

This makes life easier by simplifying accounting and reducing their disclosure obligations.  

Opportunities for accountants  

As an accountant, this will lighten your workload, particularly when supporting your clients with their year-end financial statements and the B1 form. 

Overall, it’ll give you the opportunity to provide more advice and guidance. 

To be proactive, start dividing your client list based on who will be impacted and when (based on their accounting date). From there, start having conversations around the changes to help them understand what they’ll need to do differently. 

Your expertise is valuable here, because your clients don’t have to take advantage of those reduced responsibilities. Many will want to avoid the hassle of audits, but there are plenty of reasons to still run them. For example, shareholders might require them, they may value the assurance audits bring, or they may want to prove the security of their supply chain. As a trusted advisor, you can help your clients make this decision. 

Yogesh Dhanak, senior technical advisory manager at ACCA, says offering more advisory services will balance the pressure on fees, and enable you to show the extra value you can bring. This could include consultancy and non-financial reporting, like sustainability. 

Yogesh recommends reviewing your marketing strategies to find ways to attract new clients. “If an SME no longer requires an audit or falls into the micro reporting regime, it may move to a smaller accountant firm to save costs,” he says. “Look at your business matrix carefully to see which client sizes fit you best.” 

Final thoughts 

To become a strategic partner to your clients, take the new company size threshold changes as an opportunity and start those conversations. Get ahead of the next financial year and speak to your affected clients about their annual financial statements and audits. 

If you’re already delivering advisory services, this is a great chance to provide more. And, as clients move into new thresholds, you may also find that certain work that used to be prohibited can now be done. 

Either way, start planning for the changes now and you’ll be better prepared for any impact to your fee income.