Mid-market professional services firms seeking expansion believe offering clients a full package of accountancy and specialist consultancy services is the most effective way of stimulating growth.
While the Big Four firms have long dominated the business advisory and consultancy market, mid-tier accountants are now maneuvering to increase their capabilities in this area.
Mark Craddock, regional managing partner for Azets, says a strong portfolio of advisory services is an important differentiator and helps tie in loyalty.
“Clients prefer to receive services from one trusted adviser, so with a client who wants to retire, for example, we can provide them with the accountancy services, advise on the sale and also on their tax planning.”
A further growth stream, Craddock adds, is outsourcing. Here, the firm will step in, either long or short term, to provide financial management beyond basic bookkeeping.
This ranges from acting as financial director, or more commonly as financial controller. According to Craddock, this is increasingly in demand from SMEs who are finding it hard to find someone suitably qualified for an in-house role.
He also argues that argues SMEs will continue to require personal guidance on a number of fronts, and that the concept of AI replacing an accountant is “nonsense”.
“Each business is different and that’s why advice is required – you can’t find a plan on growing your business over the next five years by using a technology package.”
James Gilbey, head of financial advisory services at Mazars, says there is also particular demand for support with regulatory challenges and cyber risks.
“There is growing awareness from clients that there is a much broader level of expertise beyond audit,” he says.
He adds that while many businesses were forced to put plans on hold because of the pandemic, these have now been lifted and this creates an opportunity to work closely with them.
Increasing focus on advisory services
Mazars is among those rapidly expanding advisory and consulting work including with transaction services, modelling, valuations and corporate restructuring.
According to Gilbey, advisory services may also help firms overcome their own recruitment challenges.Graduates typically start off in audit, then have the option to work in other divisions as part of a rotational programme, he explains.
“The firm does not operate in silos and wants people to have a breadth of expertise and find out what they enjoy most.”
Similarly, PKF Littlejohn’s advisory arm has experienced steady expansion in recent years, now equating to around 10% of the business.
According to partner Stephen Goderiski, this can be attributed to initiatives such a acquiring turnaround specialist firm Geoffrey Martin in 2014.
He adds that the firm has developed its expertise in a number of niches including fraud and forensics, insurance, and sectors where there is more complexity such as not for profits and hospitality businesses.
This, he says, has helped define PKF as a “challenger brand” – something that can be achieved while still seeking to expand audit and accounting services.
Similarly, London-based Accounting People provides a blend of auditing and bookkeeping, with other non-core services such as research and development claims advice.
The firm’s director, Ian Luke, also offers more informal mentoring services and says he has a passion for working with start-ups. He works with local firms to advise them on strategy, looking at growth plans over a five to 10 year period.
“I’ve always had an entrepreneurial mindset and relationship building can really help set you apart from others in the market.”
A further development Accouting People has been to set up a small operation in Islamabad to bring added technical skills to the firm.