As an investment

Market trends and growth drivers

Importance of digitalisation and advisory services is growing

The accounting services market has been undergoing digitalisation that changes the services, processes, skill requirements and work allocation in customer relationships. This development is also characterised by a shift in the role of traditional accountants toward more consultative and a growing demand for different financial advisory services. However, the pace of digitalisation is slow in the fragmented accounting market, and there is currently no general price level drop visible due to automation progressing.

Feedback from our customers shows that proactive consulting is an increasingly important part of a positive customer experience and has a positive impact on customer retention.

Legislation

Increasing regulatory pressures, e.g., related to money laundering and GDPR, create new needs for financial management and accounting services:

• With the new e-invoicing directive, which came into force in April 2020, an entrepreneur is entitled to receive an electronic invoice from another company.

• The PSD2 directive imposes an obligation to open bank interfaces across the EU, allowing banking services to be integrated into the accounting firm’s service offering.

• The Basel provisions have tightened, e.g., the solvency requirements of banks, which has created the need for new SME financing channels.

• The reporting obligation for non-financial information, which came into force in 2023, and the Corporate Sustainability Reporting Directive, which will come into force in phases during the 2024–26 financial years, require companies to report sustainability information as part of their operating report, which increases the amount of information companies are required to report.

Industry consolidation

The accounting industry is consolidating, driven by increasing digitalisation, tightening regulation, and expanding client service needs. These trends necessitate significant investments that smaller operators often lack the resources to implement. The industry's fragmented nature offers substantial economies of scale for larger players in areas like technology development, sales, and processes, making M&A a natural growth strategy. Additionally, workforce availability challenges and the retirement of entrepreneurs further accelerate the absorption of smaller firms into larger entities.