BDO reported Thursday its global revenues grew 8 percent to $8.1 billion in fiscal year 2017 across its network of firms as its headcount grew 9.04 percent.

The firm expanded its network from 158 countries and territories in 2016 to 162, with 73,854 people working in 1,500 BDO offices around the world.

“BDO has had a good 2017,” global CEO Keith Farlinger told Accounting Today. “We have surpassed the $8 billion global revenue mark for the first time, coming in at $8.1 billion. The 8 percent growth has been consistent. We had a similar kind of growth last year so globally we are the largest firm in what we’re calling the big market. We have a really good global footprint now in 162 countries, with 74,000 people, so we think we’re a pretty good force to be reckoned with.”

BDO global CEO Keith Farlinger
BDO global CEO Keith Farlinger Courtesy of BDO

Year-over-year revenue in the Americas increased 9.6 percent, with new firms added in the Eastern Caribbean as a result of a merger with a former KPMG practice. That brought new partners to BDO St. Lucia and a replacement firm in St. Vincent and the Grenadines. BDO Puerto Rico completed the island’s biggest ever merger in January, taking it to first place in that territory. The region also saw significant mergers in Brazil, Canada and the U.S. On Wednesday, BDO announced it was consolidating two of its South Florida offices in Miami, which will become the home of BDO USA’s Latin American Desk and the center for the CEO of the Americas region of BDO International.

Farlinger attributes BDO’s growth to a number of factors. “I think part of it keeps coming back to how we’re trying to differentiate ourselves in the market, and that is focusing on exceptional client service,” he said. “We approached the client situation from a little bit different point of view, really understanding what their issues and opportunities are and organizing our service offerings to deliver that. Given our global reach, we can do that on a global basis. For the midmarket clients, it’s something they really need with the changing world that we live in, with disruption and new things coming at them on a regular basis. In addition to that, we’ve had a lot of merger activities. The U.S. has been kind of the leader in mergers. The U.S. firm over the last five years has grown from $600 million to $1.4 billion, so they’ve really had significant growth over the last number of years. It’s really helped BDO.”

The Americas are where BDO is experiencing the most notable growth spurt.

“The Americas has been the biggest source of our growth, almost 10 percent, and that has been because of the great growth in the U.S. firm,” said Farlinger. “We’re starting to see a lot more activity in Latin America. For example, our firm in Brazil is growing significantly. The other area where there continues to be lots of potential is in Asia. I think BDO is the third largest firm in China, and they’ve had significant growth in China, but there are lots of other areas, Malaysia and so on, where BDO is growing very nicely in the new market sectors.”

This past year saw a series of high-exposure mergers across all regions for BDO International, including Armenia, Finland, France, Ireland, Italy, Luxembourg, South Africa and Spain in the EMEA region, and Australia, India and Indonesia in the Asia Pacific region. Revenues in the Asia Pacific region as a whole increased 5.1 percent. At BDO India, the partnership base grew from 20 to 67 in the past 18 months.

In addition to geographic growth, BDO has been growing its various specialties. “In terms of the number of countries we think 162 is a good number, so our focus is strengthening our existing practices as well as growing advisory and tax,” said Farlinger. “Traditionally BDO has been more of an audit firm, and we think there is a lot of opportunity for us in tax advisory and BSO [business services outsourcing] as well. BSO has really been a growing practice for us. Because of our footprint there are a lot of large corporations who have subsidiaries in smaller jurisdictions, and they just outsource a lot of their back office accounting and IT and so on to BDO to look after for them.”

Like the Big Four firms, BDO has been expanding its use of technologies such as data analytics, artificial intelligence and machine learning. The firm has been investing over $100 million on technology over a three-year period.

“We’re making significant investments on the digital side,” said Farlinger. “We’ve created a global portal we’re just rolling out to interact digitally with clients. We’ve invested significantly in our audit process tool. We’re building that in connection with one of our partners, which is Microsoft. We’re creating bots to automate some of our processes, a very interesting area. And then of course, there’s data analytics. Clients are really interested in doing analysis of their business, and because we’re a global firm, we can get more global analytics. It’s also interesting that they’re moving from hearing about history to understanding how that analytics can be more predictive about issues they may see in their firms or companies, but also predictive in terms of opportunities in their marketplace. Technology is totally changing our profession at this point in time.”

BDO has also been focusing on recruitment, although it hasn’t set any hard numbers for a headcount goal.

“What’s really helping us attract people is the BDO culture,” said Farlinger. “We like to say that it’s a caring, helpful culture. Not only do we help our clients, and we like helping solve clients’ problems, but our people feel part of a family, that we care about our people. We care about their growth and their learning, but we also give them the opportunity to work on international clients and move to other countries and so on. Our people come to BDO because they think that there’s a long-term career at BDO versus just a short-term stint to learn a few things. We’ve been very successful in bringing in people. It’s not only the young people, but it is also partners and senior people from other firms, because they feel that in our organization they’re empowered and as a result they can grow.”

Farlinger has referred to himself as a “BDO lifer.”

“I started in the Canadian firm many years ago as a student,” he recalled. “Every time I was looking for a new challenge and was getting kind of bored with what I was doing, I looked around and there was a new opportunity. I think that describes BDO. There’s lots of opportunity, lots of potential for people, again a great place to work for sure.”

BDO’s focus on the midmarket helps give the firm opportunities to grow. “These are the companies that don’t have all the resources in-house to deal with all the opportunities and issues,” said Farlinger. “That creates a great opportunity in the midmarket for BDO to help those clients, not only with solutions in advisory and tax, but also they can outsource some of their back office to BDO so that they can focus on what they’re good at, and that is creating their product or selling to the market, knowing their back office is being looked after by BDO through our BSO services.”

He encourages an entrepreneurial mindset among the network’s member firms. “Our member firms are entrepreneurial and they are contributing to the growth of BDO by developing solutions, like data analytics, and then sharing them with the whole network,” said Farlinger. “Rather than a top-down organization, BDO is really supported by a number of leaders who create global solutions. By doing that, they really allow us to grow a lot quicker, and it also gives them the opportunity to adapt solutions to their own markets, recognizing that the markets are different. We’re not top down with this is the way it has to be. We’re a bottom up firm that is agile and can adapt to the different markets around the world.”

Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.