What does a growth-ready accountancy practice actually look like?

“Growth-ready” means different things to different accountancy firms – so does everyone need to adopt a different approach?

Thankfully, no.

There is a common three-step setup for success. The strongest practices use this as their launchpad, whatever their accountancy firm growth strategy.

You need to pull three levers for reliable financial take-off: tech, resource and price.

The three levers behind a good accountancy firm growth strategy: tech, resource and price.

Let’s look at each of the three major levers and how they power an accountancy firm. Pull one and you’ll see improvement; pull all three and you can see major growth.

Lever #1: A modern, fully synced accountancy firm tech stack

The better your accountancy firm tech stack, the better you can run your practice and make decisions about resource and price. On the client-facing side, it keeps those you help in the loop and makes it easy to share data.

Prospects also get a good understanding of who you are and what makes your firm special thanks to your online presence.

But tech needs to be thought out properly; it’s a long-term investment into a firm-wide solution. It’s easy to assume that reaching for the newest, shiniest software equates to a good tech stack. However, that can mean a lot of disjointed parts failing to build up to a greater whole. Efficiency is lost, data is blocked, work disappears through the cracks, client issues pass by unnoticed and attrition goes undetected.

Growth-ready firms have a holistic view of their digital system

They think about how they can build a consolidated accountancy firm tech stack. This means true integration, where one piece of software built for one task sends data to another. The result is much cleaner (and often automated) workflows and data that stay consistent. This setup means staff can log into their software and, using one dashboard, see the status of tasks and the data underpinning it.

To build that connected ecosystem, you want mainstream, tried and tested products.

But why, when startup software can present a tantalisingly cheap offer? Because longstanding vendors are often more mature. They have developed stable software to cater for decades of legal changes and increasing client sophistication.

What you need to get in place to have great tech

A growth-ready stack is a set of functions sharing one client record, so data entered once shows up everywhere it’s needed. This can include software solutions for:

• Tax and accounts production. In a good setup, these work from a single client record, so data entry syncs across the firm. Figures aren’t rekeyed or left out
• Practice management. This solution takes into account client data, jobs, deadlines, time, WIP, and billing – and tracks the status of all work
• Client data sharing (“portals”) and automated client communication
• A web presence that ensures prospects, Google, and AI such as ChatGPT take you seriously

An accountancy firm tech stack is your first lever for a reason: it gives you data so you can take advantage of the other two. For example, it shows chargeability and where capacity sits, so a hire is an evidenced decision. And it also surfaces margin, recovery, and profitability by service line, client, and partner, so you can raise prices effectively.

Lever #2: The power to see and control resource

Resource intelligence is about knowing who does what, how well, and at what cost. It means having a view of:

• Roles, responsibilities and how work gets executed
• Single points of failure – the risks if a key person leaves suddenly
• Chargeability and utilisation, so you know who’s stretched and who has headroom
• Hiring options, whether that’s local or hybrid, generalist or specialist, in-house or outsourced
• Capacity for lucrative service lines like advisory services

Resource management data switches your firm from instincts to insights. “I think we’re busy” becomes “this service line is at 90% utilisation”.

This gives you space to be strategic. Knowing you either have the right people – or are on the path to accessing them – unlocks a trove of options. For example, you can choose whether to hire locally, create hybrid arrangements, find gifted generalists or seek out best-in-class specialists. You will know when to keep work in-house and when to outsource.

A scenario where resource intelligence makes all the difference

Let’s imagine that audits are your biggest fee-winner at your firm. They bring in a lot of money and clients pay on time.

You decide to grow your audit book. However, to do that, your resource intel suggests you must hire an audit manager, and that they are worth £70k or more. You can’t find another expert locally, even though your firm has always been based in the office.

So, you have a decision to make: do you leave things as they are or do you make the investment, change your culture to hybrid to attract the next hire, and enjoy the rewards it brings?

Thankfully, because you know who does what, how much their time is worth, and that the right people are on the right tasks, you make an informed choice. You decide to hire, knowing that you’re not rolling the dice financially.

Lever #3: The ability to put up price

Putting prices up is the most commercial move you can make. Whether it’s wise depends on if you can justify the increase.

If you’re a quality-focused firm, do this carefully. You take pride in your work, but clients have very subjective views. They’re not accountants, so your stellar care might just seem acceptable to them – especially if you’re their first firm.

So, how can you raise prices without ruffling feathers?

By having your tech and resource levers in place, you can make an informed change. You can increase prices where needed because you know your margins and recovery rate. You can also give clients justification based on the measured value you have given them.

What an accountancy firm “strategy” without levers looks like

What happens when you don’t have the three growth-ready levers in place?

Organic growth makes you subject to outside forces

About 39% of firms actively look to attract new clients (Source: Moneypenny). Much of that will be referrals, but underneath that sits a foundational weakness if you don’t have the three levers in place.

It’s not that referrals are a bad idea; referred clients pay good money. But relying on them is relying on word of mouth. Right now, that brings a degree of risk.

Geographic areas decline. Industries that looked healthy one year start to struggle the next. In other words, those referral networks are not quite as robust as they once were.

AI is also changing how your referrals act – we know people are becoming more and more likely to use it and do some digging. If you have a weak digital presence, it doesn’t take much for an AI search to surface any mixed reviews or drop you onto a shortlist with comparable firms. Every inefficiency, mistake, or missed service people wanted to vent about is suddenly pulled to the surface.

And if your digital presence is weak, good luck appearing in any general searches, whether that’s via AI or Google’s front page.

Paying the price for not knowing your numbers

Meanwhile, if your price lever isn’t set and you’re charging people without knowing your margins or recovery rate, you could either look overpriced against rivals or win the work and lose money on it. If your resource lever is weak, you can’t meet the demand that growth creates, so service can slip at the moment a new client is forming their first impression.

On the other hand, having the three levers means you can strategize. You can see where you would want to grow service lines and increase staff support for them. You can take your destiny into your own hands and steer the firm in the direction you want it to go.

Inorganic growth means red flags and a drop in value

Accountancy firm M&A has been on the rise and if you aren’t considering it now, you will when your firm is larger.

In recent ICAEW figures, 80% of firms with 11-249 principals have made at least one acquisition; 67% expect to make further acquisitions within three years. About 25% of mid-tier firms are now PE-backed, and the UK accounts for over 40% of all PE-backed accountancy deals in Europe (Source: Accountancy Europe).

If you pull all three growth levers, you are highly desirable from an M&A perspective. On the other hand, if your systems don’t integrate and you struggle to control resource or cater for talent (such as through hybrid working) this will put other parties off.

Meanwhile, owner-dependence – whether the firm could run without its principal – can swing the final sale price by as much as 20–30% (Source: Bains Watts).

Your first step

I understand if your first instinct is to rush at tech as that all-important first lever. You want to get going with your accountancy firm growth strategy

However, there’s some groundwork to be done first.

You need to consider how to standardise your firm. You need to develop rules for how a firm operates, from business development and client onboarding to sign-offs and invoicing.

It’s time to get everyone working from the same board.

How do you do this?

We recommend running an internal project. Make sure you give it the time it deserves; there’s much to be done.

You want to see everything your firm does, how it does it, what’s best practice and where blockers exist. The project must also identify single points of failure – what would happen if one of your staff won the lottery tomorrow and handed in their notice?

I’ve done this work, and I promise you it’s not easy. At first, asking staff to explain what they do might result in a short answer. But then keep asking them. When I was being quizzed on my role, I thought I was done in a few minutes. I’d forgotten the granular detail – the VAT returns, the letters to clients, and much more. I also had to explain where and how I did it; did the job live in Excel? How joined up was one task to another in terms of data?

By the end of the exercise, the firm had a good sense of roles, responsibilities and execution. It knew what would happen if someone had to depart their role suddenly, and whether someone else could pick up the baton.

Moving to a good digital system – accountancy practice management software

When the groundwork is done, it’s time to think about a digital system. In other words, you’re ready to create that first lever.

Part of this system must manage the team properly. This accountancy practice management software has to give you:

• Visibility of margin, recovery and profitability by service line, client and partner – real-time data that powers every lever and every strategic call
• A connected, integrated stack that shares data, uniting your standardised teams and the work they do
• A single source of truth that removes single points of failure

IRIS Firm Management (IFM) was built for this purpose. It creates a data-rich foundation for your practice, turning growth efforts into evidenced, decision-making processes.