BDO USA sees 11.8% revenue increase, sets sights on 'Big Five'
BDO USA LLP reported a record level of revenue in the fiscal year ending June 30, 2019, reaching $1.64 billion, an 11.8 percent increase in the past year.
The firm, which ranked No. 7 on Accounting Today’s 2019 list of the Top 100 Firms, achieved growth across all business lines, especially from advisory services, which saw revenue growth of nearly 40 percent. Tax services revenue increased 8.4 percent and assurance services revenue was up 4.3 percent for the year.
This is the eighth consecutive year of growth for BDO USA under CEO Wayne Berson, who has been re-elected to his third term. Since becoming CEO in 2012, he has led the firm from annual revenues of $618 million to $1.64 billion by expanding services, implementing a strong growth strategy and opening offices in 24 cities.
Berson told Accounting Today that if he serves out his full term, he will be the longest-serving CEO outside the Seidman family, which founded BDO Seidman.
“We’re really executing on our strategic plan,” he said. “If you have the right people and the right culture, the rest falls into place. We’ve made a considerable effort in getting the right people on board. We talk about having a world-class environment. It makes a big difference.”
He acknowledged that the accounting profession has been facing challenges, especially from audit regulators. “We are seeing tremendous opportunity at a tough time,” said Berson. “There’s margin compression. The regulators are looking at all the firms very closely and seeing some of our competitors in a negative way. That has helped fuel our growth.”
Berson also chairs the global board of directors of BDO International and he spoke to Accounting Today as he was flying back from London after attending a board meeting. With growing demands for regulation in the European Union and the United Kingdom of audit firms, he sees a chance for firms outside the Big Four to compete for work. Berson will serve as vice chair of the governing board of the Center for Audit Quality, effective Oct. 1.
“We’re seeing opportunities in a lot of the European countries playing out in our favor,” said Berson. “Brandwise, we’re an easy number five.”
He pointed out that the BDO network globally earns nearly $10 billion in revenue, although he admitted there was a big gap between its revenue and the Big Four. “When people are looking at an alternative internationally, we’re becoming a really good choice,” said Berson.
He noted that he has kept essentially the same management team in place since he became CEO in 2012 and has expanded the firm in geographic areas and industries where it wasn’t situated. He plans to make further investments in expanding the firm.
“Innovation plays a huge part for us as we invest in the future,” said Berson. “Too often we see firms looking at short-term results. We have a nice hold on the market that we’re targeting.”
Berson sees opportunities for expanding in several types of services. “We’re still looking at a number of expansions in key areas. We’ve made specific targeted investments in firms that specialize in certain advisory niches, like turnaround services, cybersecurity and forensic investigations. Those are specific areas where we’ve invested and we’re looking at more as well. At the end of the day, you can find the right people to come into BDO when there’s an alignment of value and the strategy that makes for good results.”