Accountancy Consolidators

You only have to take a look at the UK’s Accountancy Age list of top firms to see the consolidators – generally those backed by private equity – are shooting up the charts. Growing revenue inorganically though is not necessarily a measure of success; the first wave of consolidators during the noughties all failed to develop synergies, economies of scale, or use their mass to win bigger or more valuable clients.

New practices can grow quickly but then hit scaling issues, as clients demand more time and more complex servicing. Larger practices are built on years of client and people development – but consolidation can be disruptive. I expect to see some of the private equity houses look to sell on and make a good return… how easy that will be is very much up for debate.

Election

We will have an election in the UK this year, and it’s by no means certain that the current incumbents will stay in power. Whatever the case may be, I hope for greater stability and planning in its thinking to encourage growth.

A bugbear of mine has been this government’s lack of planning to encourage entrepreneurs and investors to stay here and invest. There are EU countries ready to snap up the best people through a combination of their tax treatment and both residence- and investment-friendly policies. Can whomever forms the next government drive the economy forward?

AI

We couldn’t have a ‘2024’ list without mentioning AI. The ‘warm glow’ created by ChatGPT still exists, but now time will tell whether AI can revolutionise how we as citizens live and work.

Certainly, there’s been concern among corporates (and governments) about making information freely available to be absorbed and interpreted into large language models. The next step could be AI platforms placed in ‘data bubbles’, with organisations then linking the platform with their own systems and information to help inform decision-making (as well as automating tasks).

Conversely, software providers are also adapting and embedding AI into their solutions.

Whether these private data bubbles will be effective or not, when information into them is constricted, remains to be seen – but it will be fascinating to find out the next level of AI utilisation in the real world.

Shared services and outsourcing‍

You can see in AdvanceTrack’s own growth that firms know they need resource and the recruitment market is difficult and costly. They are looking for someone they can entrust with supporting their practice. Some firms have looked to maintain control by setting up centres abroad – to varying degrees of success.

Expect to see more and more practices look to grasp the resources nettle – which will mean the outsourcing/offshoring offering will become more popular. I hope that, as firms transition towards models that involve greater automation and external resourcing, they stay laser-guided on developing their existing people while keeping a keen eye on what their clients want from them.

It is by no means easy to undertake that task, but resourcing is a means to an end. Without understanding what you want your firm and its people to provide (and to whom), then everything undertaken is done without foundation.

Opportunity and investment

Practices’ services have been in demand, and we have worked more closely than ever with them to work through resourcing bottlenecks or, more often the case, as the backbone of their core services. In doing so we’re very proud to have maintained compound annual growth of 60%… Can we do that again in 2024? Well, that’s a tough ask – but not too shabby for a 20-year-old business! Staff numbers have

increased, as have our office locations. We expect numbers to rise again in the next 12 months.

Speaking of our team – it seems a great opportunity to announce that former EY partner Craig McKell has joined AdvanceTrack. Based in Sydney, Australia, the chartered accountant will support our growth in the Asia-Pacific region. Craig has run a tech business for more than ten years and understands the steps to scale an organisation. AdvanceTrack has a core of experienced professionals managing at both strategic and operational levels. As important, we’re ready to take things to the next stage.

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Save the date: 14 May to see us at AdvanceTrack GBX!

AdvanceTrack’s conference gets a new name and new approach… join us at our ‘growth booster’ event!

At AdvanceTrack we never stay still. As a business that has existed for 21 years, and whose growth is still high, the only way to achieve is through a continually evolving plan alongside investment in people and technology.

Our new ‘accounting practice growth booster’ event, GBX is our investment in developing our conference into a series of sessions designed to support you in growing your firm.

Needing no introduction is Dragon’s Den star and business investor James Caan CBE. James founded his own recruitment business, Alexander Mann, which he would sell for £95m. Investing in himself, James then attended Harvard Business School before starting a recruitment investment organisation, Hamilton Bradshaw.

Again, a familiar name to accounting practitioners is our next keynote speaker, Xero co-founder Hamish Edwards. In his role at Xero, Hamish has played a pivotal role in revolutionising the way businesses manage their finances, and this has had a big impact on the practice community too.

Hamish is executive chairman of Firmcheck, an AML management system for practices which launched in 2022.

Our founder Vipul Sheth and CTO Ian Gregory will update attendees on the future of AdvanceTrack, and where we all fit in a world which continues to develop at a rapid pace.

Gary Turner advises and invests in early-stage tech in the UK and internationally. As an operator, he led the UK arm of the global cloud accounting platform Xero from 2009 to 2022. Under Gary’s leadership, Xero’s UK business grew from revenue of £56k in its first year to over £150 million ARR and more than 850,000 customers.

We’d love to see you on 14 May at the British Museum, London. Contact us through our website if you’re interested in attending or e-mail us at events@advancetrack.com.