What private equity means for accountants

Fast-paced and transaction-driven vs. slow-and-steady and relationship-driven. The differences between private equity and accounting could not be more pronounced.

However, understanding and appreciating the distinctions between the two could make a significant difference in whether an accounting firm decides to go it alone or seek outside capital, and whether a private equity firm makes a strategic move to invest.

Gale Crosley, President of strategic growth consultancy Crosley & Company, takes a look at what you need to know to bridge the gap.  

Read more: Pathways to Growth: The private equity/CPA cultural divide

Gale Crosley, President of strategic growth consultancy Crosley & Company, believes that in the current environment, with private equity firms showing increasing interest in making acquisitions, accounting firms must change their strategic approach.

"Most firms operate like a loose confederation of golfers, where personal score — their individual book of business — matters most," says Crosley in outlining her views on why revenue segment leaders are the future rather than book-of-business individuals. For success, firms need to "Think football not golf." 

Read more: Pathways to Growth: Driving demand with revenue segment leadership

Accounting firms typically operate under a partnership structure, but an uptick in private equity interest in the profession is taking many senior leaders out of their comfort zone, says Bob Lewis, President of accounting M&A and advisory consultancy The Visionary Group. 

"The challenge in the accounting world with outside investment is that it is breaking the norm," says Lewis. But, could PE investment improve the way a firm works? "Outside investors are just a new element of change — one you should explore because it might be the right move for your firm."

Read more: The impact of outside investment in accounting