The global accounting space is powered by collaboration. As a result, it’s hardly surprising that accountancy firms have long relied on partnerships to supplement their services and better meet the ever-shifting needs of their clients.
Historically, the partnerships that accountants would forge with other businesses and financial service providers were limited to referrals or joint-marketing efforts. Yet as clients from a dizzying range of industries begin to face more complex regulatory, logistic and operational challenges, there’s been growing demand for more holistic partnerships that can deliver on sky-high expectations without any of the added friction you’d anticipate running back and forth between multiple service providers.
That’s why industry leaders are starting to redefine collaborative partnerships in the accounting function — forging dynamic pairings that create added value and encompass more complex accounting functions ranging from tax preparation and audit support to financial analysis, CFO-level strategic decision-making and everything in between.
While this hybrid model is still in its early stages, firms keen on pursuing a more collaborative endeavour need look no further than the recent partnership between Dains and Isosceles.
Founded nearly a century ago, Dains is one of the UK’s leading accountancy firms and specialises in advising growing and owner-managed businesses. By contrast, Isosceles was founded in 2001 and specialises in the provision of outsourced human resources, FD services and outsourced accounting to rapidly growing businesses.
With the two firms operating in different verticals, it might have sounded like an odd pairing when Dains announced its acquisition of Isosceles in September 2022. Yet according to Isosceles founder and CEO Mike O’Connell, it was the respective firms' varying strengths that validated the partnership from day one.
“The origins of Isosceles have always been in the finance department supporting those investor-backed, fast-growing technology companies with the challenges those businesses are facing,” he says.
O’Connell and his team were able to successfully grow the business and cultivate an enviable list of clients and became experts at supporting entrepreneurs in creating controlled and coordinated exits. Yet despite this growth, he felt a lack of expertise in more complex areas such as corporate tax meant Isosceles were unable to provide its clients with the full-service package they needed.
Fortunately, Dains Accountants Limited CEO Richard McNeilly had already noticed a similar gap in the market — and the two CEOs realised that by combining the deep specialist expertise of Dains with the range of services on offer from Isosceles, the augmented group would be uniquely positioned to offer a full-service package of both technical and commercial business solutions relevant to the entire lifecycle of their clients.
“Typically, businesses like ours that scale will acquire homogenous firms. Essentially, we’re all doing similar sorts of things,” says Daran Harding, Business Development Director at Dains.
“But the importance of Mike and the team is that they do something different. That makes a real difference, and that’s what makes the relationship so very special.”
The Dains model of added value is certainly gaining momentum across the accounting ecosystem.
Increasing complexity within the global business space has pushed accountancy firms to follow suit and seek partnerships which enable them to widen their arsenal of services rather than simply soak up competitors. Much of this stems from regulatory divergence in key markets, new digital reporting requirements and potential staff shortages in key areas of expertise.
Yet above all else, collaboration helps accountancy firms stay competitive.
Upstart fintech’s have disrupted the traditional accounting model — in turn softening barriers to entry and leading to a far more saturated field of competition. According to Isosceles’ Mike O’Connell, that is why it’s so critical firms adapt and develop their relationships accordingly.
“The idea of just offering simple processing or bookkeeping services or straight forward compliance services just isn’t enough anymore,” O’Connell says.
“If you're looking to add real value to a client, you need to be able to offer a much more holistic and forward-looking enriched service that isn't there for just a year or two — but actually can sustain and support a client over their lifetime, from inception through scaling and then ultimately to exit. Clients don't want to keep switching professional advisors. They ideally want one trusted partner.”
By developing partnerships capable of fulfilling those roles, accountancy firms can effectively achieve economies of scale. This not only leads to efficiencies and reduces costs, but it can also deliver better value for clients and improve staff retention through the development of new internal career pathways.
Yet in order to create those opportunities and build a successful partnership, O’Connell says it's critical businesses choose their partnerships wisely — and, more importantly, that they effectively communicate with stakeholders.
“This is a resource-constrained sector and employees have choices. So, if you're going to enhance the value of these partnerships, those first steps are vital. You can execute well and take people with you on the journey and the vision or easily trip up and achieve the opposite outcome,” he explains.
In order to be successful, firms need to be transparent when announcing new partnerships — clearly expressing the reasons behind the partnership, what it means for the firm, clients and its employees and the benefits for all parties.
In addition, leaders must address concerns and provide reassurance to their teams around the collaborative benefits. Where relevant, firms should be poised to offer training and support both pre-transaction and post-transaction, encouraging feedback every step of the way to ensure mutual understanding.
“You end up with an uber-motivated and invigorated workforce, who are excited about a richer future together,” O’Connell says, pointing out that Isosceles didn’t lose a single member of its team as a result of the acquisition.
“External collateral, press releases and social posts are all important but genuinely understanding and incorporating collaborative benefits are key to achieving mutual success.”
At its core, a successful accountancy partnership revolves around trust — both in terms of the transaction parties and their aligned values, as well as in terms of each partner and how it communicates with and supports its respective team.
That’s why this partnership between Dains and Isosceles has found clear success more than six months on, and it’s why hungry accountancy firms keen on remaining competitive should be looking to the example of this new Dains Group for lessons on how to move forward through collaboration.
