Insights from Accountex 2023

With two packed days of insightful speaker sessions, brilliant conversations, catching up with old faces and meeting many new ones, we weren’t short of things to do at Accountex 2023!

With so many people to see, you may have missed our speaking sessions. So if you couldn’t make it, or would like a recap, here’s everything we learned at Accountex London 2023: 

How to fund, buy and sell your accounting practice

Panel speakers: Paul Surtees, Kirsty McGregor, Nikki Adams and Peter O Connell.

We kicked off Accountex on Wednesday morning with a full house! The session involved discussion from Paul and Kirsty on the funding market for accounting practices and experiences from Nikki Adams, MD at Ad Valorem, and Peter O'Connell, MD at Shaw Gibbs, who have acquired multiple practices. 

Nikki and Peter gave the audience tips on what they look for when acquiring a practice, explaining that they look for firms that have: 

• Up-to-date tech and have their clients online 
• A good location relative to their current practice 
• Strong cashflow projections
• Monthly recurring revenue 
• Not reducing their marketing costs 

When asked about why both firms opt to acquire practices, rather than grow organically, both agreed that acquisition was the fastest way to accelerate their growth.

Peter also noted that it’s not just the clients that you bring in with an acquisition, but also a team of experienced and skilled staff. In a period where hiring is an increasing challenge in the accounting industry, bringing in other resources like quality staff is a huge benefit. 

As the panel discussed how to acquire a firm, Nikki noted that “it depends on your growth aspirations” on whether you should look for funding. She explained that Ad Valorem “wanted to grow faster and therefore needed funding to do that.” 

Paul explained how the current economic landscape means that lenders are tightening their restrictions and their rates are increasing, which will have an impact if you’re looking to fund an acquisition. Despite the tightening lender requirements, there is a market for accounting practices looking to fund their acquisition, it’s just a little bit tighter at the minute. 

As interest rates rise, a good credit score is important if you’re looking to fund your practice as it will enable you to access the cheaper interest rates available. 

If you’d like more insight into funding buying and selling your accounting practice, you can download our complete guide.

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How to stay confident in an economic crisis

Speakers: Paul Surtees and Rachel Emmerson 

A brilliant session hearing from expert accountant Rachel Emmerson at Kreston Reeves and Paul Surtees, CEO and Co-Founder at Capitalise. 

The session started by reflecting on the pandemic when NPS scores were the highest they have ever been, as businesses looked to their accountants for support. As we remain in an economic crisis, Paul and Rachel discussed how this is an opportunity to work closer with your clients. 

Paul explained that understanding the winners and losers in a recession is essential for businesses looking to secure long-term growth. As studies show that only around 10% of businesses achieve a greater compound annual growth rate ten years after a recession begins, it’s crucial to identify strategies that can help more businesses succeed. 

Paul and Rachel discussed the key behaviours businesses should be taking to perform well out of a recession and how Kreston reeves are supporting their clients to do so: 

• Maintaining working capital, both internal and external

Cashflow forecasting is an important way to get businesses to understand their working capital. Kreston Reeves is ensuring their clients are doing this by implementing their biggest project: getting all of their clients online. This ensures they have all of the information they need at their fingertips. 

• Not cutting all costs

Rachel explained that she has clients who are “panicking and completely cutting google ads when they don’t know their numbers or key performance indicators enough to know how much income is coming through that channel.”
It’s important that clients don’t blindly cut costs and know what those costs are giving them. Helping your clients to understand their key performance indicators will ensure they’re managing costs effectively. 

• Reviewing costs 

It’s important to be asking your clients if they’re actually getting what they need and want from their suppliers. At Kreston Reeves, one client was spending over £90,000 a year for a supplier that was only giving them 50% of what they needed. By looking at other suppliers, they were able to reduce their costs and get what they actually needed.

• Credit checking customers

Rachel discussed that she was surprised by how many businesses don't credit check their clients. It’s important to remember that your client’s customers are also facing these macroeconomic issues so you no longer know if they can be trusted to deliver or pay on time. Credit checking their customers will give your clients an accurate picture of what terms to extend and whether a business is high risk to work with

How to protect business balance sheets 

Speakers: Paul Surtees, Glenn Collins

This session was packed with exciting live updates as Paul predicted the Bank of England would raise interest rates by 0.25% and half an hour in they did just that. 

The session started with Paul explaining that we find ourselves facing the end of an era of cheap goods, cheap energy, and cheap money. As interest rates rise, businesses are encountering increasing challenges in various aspects of their operations. To thrive in this evolving landscape, it's crucial for businesses to adapt their practices and institutions. 

Paul and Glenn reflected on the last recession, providing valuable insights into the behaviours that enable businesses to weather the storm successfully. By adopting the following strategies, businesses were able to mitigate the impact of the recession and position themselves for recovery:

• Balance Sheet Discipline
• Surgical Cost Restructuring
• Customer Centric Approach
• Pricing Correctly
• Pursue Considered Acquisitions
• Working Capital Management

In this period of economic uncertainty, accountants play a crucial role in supporting businesses. Glenn Collins, emphasised the importance of providing clients with support and introducing advisory services. By engaging in meaningful discussions with clients about the challenges they face, accountants can offer valuable insights and guidance.

The session also explained how accountants can help businesses by addressing their business credit profiles. A business's credit score and limit have a significant impact on their access to both internal and external working capital. By working closely with clients to improve their credit scores and increase credit limits, accountants can enhance their clients' financial flexibility and supplier choices.

Glenn Collins noted that an increased credit limit enables businesses to access more trade credit, which effectively provides 0% working capital. This additional capital can be instrumental in navigating economic crises and supporting business growth.
 

No funding is the new funding!

Speakers: Paul Surtees and Oliver Kiddell

At the Wolters Kluwer’s stand, Paul and Oliver discussed the funding market just 2 hours after interest rates were raised by the Bank of England for the 12th consecutive time. Paul explained how we’ll need to get comfortable with the fact that debt is now more expensive and the days of 1% interest rates may be over. 

But as debt gets more expensive, there is a viable alternative in trade credit. If your clients work with suppliers, then increasing their trade credit means they can unlock 0% working capital for their business. 

With our Credit Review Service, at Capitalise we are able to improve a business’ credit limit. Paul discussed one example where a business already had a credit score of 100/100, yet we were still able to increase their limit by £820,000. By unlocking hundreds of thousands of pounds in trade credit, the business’ working capital was completely transformed. 

That’s a wrap for Accountex 2023!

With 4 amazing speaking sessions, we learnt a lot at Accountex and we loved speaking to so many accountants at our Green stand. 

If you’d like to learn more about how we can help your clients, book in a chat with us.
If you subscribe by the 30th June 2023, you’ll be able to claim a free Credit Review for one of your clients, so you can change a business life too. 

Now the countdown begins for our next event! Come see us at the Digital Accountancy Show on the 15th June.