Accounting Firms Snap Up Tech Companies to Keep Clients In-House

The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...

By Denise Lugo

Mid-sized accounting firms, driven by market demand to provide technology solutions, are buying tech companies in a bid to retain clients.

BDO USA LLP and RSM US LLP in July said they acquired technology businesses that provide customers with a suite of services such as cloud computing, data analytics, and e-commerce.

This big tech leap will enable them to evolve from audit, tax, and accounting services to multi-service companies that provide technology platforms, executives from BDO and RSM said. The companies said they intend to provide clients with one-stop shopping where they can get tech solutions in addition to traditional accounting services.

The move gives accounting firms a competitive advantage over stand-alone tech advisers, Jay Duke, BDO’s national managing partner for advisory services in Dallas,told Bloomberg Tax.

BDO, for example, bought SWC Technology Partners LLC, an Oak Brook, Ill.,-based company that specializes in technology solutions, including cloud computing and data analytics. SWC offers managed services, data analytics, cloud computing, custom application development, software, and infrastructure solutions, such as network security. The acquisition, announced July 10, brings a staff of 215 to BDO’s advisory practice.

“Clients need to have a one-stop shop where they can look to their professional services firm for this kind of provider which offers a diverse range of services such as accounting, auditing and tax,” Duke said.

Millions From Tech

Similarly, RSM is building its technology practice and gaining millions of dollars in revenue.

RSM July 1 acquired Explore Consulting LLC, an Oracle NetSuite solution provider in Bellevue, Wash.,that manages areas such as e-commerce. The purchase enhances its growing technology and management consulting practice, the company said. Its software offerings can help businesses manage finances, operations, e-commerce and customer relationships.

A year ago, RSM acquired Junction Solutions, a Microsoft Dynamics AX provider in Denver, Colo., to increase capabilities in its tech platform.

“There’s a huge need for technology solutions—that’s been our fastest growing consulting service line,” Joe Adams, RSM’s CEO and managing partner in Chicago, told Bloomberg Tax.

“We’re over $500 million now in revenue overall for consulting and just under half of that is technology now,” he said.

More Tax Planning, Less Preparation

Accountants told Bloomberg Tax that businesses are looking for tax planning and advisory services rather than tax preparation.

Improved tax software programs make it easier for businesses to do their own tax preparation, accountants said. But most clients want to be able to take advantage of tax and regulatory changes, making them more interested in the tax planning and advisory services.

“The audit and tax business has become so competitive that firms are looking for other areas of revenue they can grow and serve their clients,” John Yeager, managing director at accounting and consulting firm Bennett Thrasher LLP, told Bloomberg Tax.

“Clients are dealing with technology issues, and CPAs have always been in that trusted advisory space, so to a certain extent it’s a natural growth opportunity to some of them,” said Yeager, who leads Bennett Thrasher’s newly launched business transformation services practice in Atlanta.

Big Four’s Wave of Tech Buys

The tech acquisition trend by mid-sized accounting firms piggybacks on moves by the Big Four accounting firms to expand their advisory services. The Big Four have been on a tech buying spree the past five years.

In April, KPMG LLP’s division in Canada acquired Adoxio Business Solutions a global information technology firm specializing in Microsoft Dynamics 365 for Customer Engagement. Adoxio, a Microsoft Gold Partner, provides customer relationship solutions in Canada.

Other deals include Deloitte LLP’s January purchase of ATADATA, an Atlanta-based cloud platform provider that maps, migrates, and manages data workloads in any combination of on-premise and cloud services.

Ernst & Young LLP, also in January, bought Citizen, a digital design firm based in Portland, Ore. In 2017, EY bought BOX, now EY-BOX, which is currently working closely with EY’s 15 innovation and technology centers around the world.

PricewaterhouseCoopers LLP, among its tech purchases, in 2016 bought Selera Labs, a data technology firm in Australia.

To contact the reporter on this story: Denise Lugo in New York at

To contact the editor responsible for this story: S. Ali Sartipzadeh at

Copyright © 2018 Tax Management Inc. All Rights Reserved.

Request Financial Accounting