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Silicon Valley knows how to scale for growth and despite recent job cuts that’s a worthwhile lesson, says Damien Greathead of Intuit QuickBooks.
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Tech companies ‘can teach accountants a thing or two’
20 March 2023
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10 minute read
Accounting practices can learn something from the way Silicon Valley scales for growth despite the massive job cuts across the tech sector, says Damien Greathead of Intuit QuickBooks.
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The company’s head of marketing for the accountant and adviser group said building extra capacity into practices would smooth the path to expansion and avoid stressed, overworked staff.
“Tech companies are always scaling, they’re always growing. And so one of the things that they’re focused on is making sure that they’ve got the capacity to sell and support to meet forecasts,” said Mr Greathead, speaking on the latest Accountants Daily podcast.
“So they will always be hiring more than they need at a point in time with an expectation to meet demand.”
Recent widespread redundancies involving thousands of job losses at Meta, Amazon and Google were a reality check that stretch targets were too ambitious.
“Companies have gone out and hired salespeople, customer success people, engineers with this expectation of demand that’s built into their forecasts that they’ve promised the investors,” he said.
“When those forecasts don’t come to fruition or they’re not as great as they were expecting there’s obviously that overhead of this workforce that they’ve hired in anticipation of this growth.
“So I think it’s really just this normalising of the actual workforce for the growth that’s actually being achieved, rather than the growth that they’re promised the market or rather than the growth that they’ve promised investors.”
However, the tech companies were still right-sized for growth and accounting practices should do the same.
“In a typical accounting firm the partners start to think about hiring when their team is probably at 110–120 per cent capacity and absolutely maxed out.
“The lesson to learn from tech companies for small-medium sized accounting firms is, how do I always have a bit of excess capacity?”
He said there was plenty of demand for accounting and bookkeeping services and most practices were growing and taking on more clients.
“But their biggest fear is actually having the capacity to handle that work.
“So my challenge to the firm owners would be to think about how do I make sure that I’ve always got some capacity? … Because I do know that referrals are going to come in, I do know that prospective clients, new clients will be coming through the door. And I want to be out in front of that.
“So rather than putting pressure on my team, rather than pushing them to the max, I’ve always got that capacity there.
“And then it’s on me as the owner to get out and hustle and win that new business because it’s coming out of my pocket.
“So I think there is something to learn from tech companies – and it might not be to the same scale of tech companies – but I think accounting firms should be looking at how they create an additional 20 per cent of capacity purely focused on growth … I want to make sure that I’ve got that capacity now, rather than pushing my team to 110–120 per cent of their daily hours.”
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