The growth of SMEs, startups and freelance accounting

The growth of the gig economy and the proliferation of SMEs and startups is driving the demand for accountants that can provide services and expertise on part-time or short-term basis.

This has been further exasperated by the pandemic, which is causing unprecedented shifts in the job market, with uncertainty meaning companies are less willing to hire on a permanent basis, favouring contract or interim accountants.

Meanwhile, the big resignation is a reality, with tens of millions leaving their jobs globally in search of something new, better or just different, which might include working remotely and/or with the flexibility of being your own boss and serving the numbers of small businesses not ready for a dedicated finance team, but still want financial stewardship.

‘The pandemic is one of the most singular factors in recent times to drive the increase in consultancy/freelance work and the creation of startups. The world and even the most hardened sceptics have come to realise that if you hire good people, they can work anywhere for anyone due to the success of remote working and the mind shift that the pandemic has brought to the business community,’ said said Andrew McLeod FCCA, head of resourcing at Scotland-based business advisory and finance recruitment specialists Hutcheon Mearns, which counts many startups as clients.

‘Startups in general have been on the rise over the last 18 months. Factors include individuals finding themselves out of work or with a greater uncertainty due to the pandemic. That being said, remote working has shown that physical location is no longer the restriction that it was once perceived to be, therefore lifelong ambitions or the ability to capitalise on this new form of working has given rise to new businesses,’ continued McLeod.

‘We have seen a number of new 100% remote startup companies being created due to the world being more comfortable with a remote/virtual working set-up, which has led to an increase in demand for virtual/remote financial controllers, finance directors (FDs) and CFOs.’

Via a platform it calls Nexus, Hutcheon Mearns collates a database of ‘freelance' finance professionals, which complements its own offering providing businesses with specialist teams on a project basis. Nexus is essentially a marketplace of finance and accounting resources, so that businesses can find the finance professional or team to solve problems large or small, short or long term.

‘We have seen a sharp rise in demand for highly skilled workers to support our clients on specific projects or on an ad hoc basis. This allows greater flexibility for both our client and our freelance workers. From our client’s perspective, they see greater value being driven from utilising resource when its needed and not losing value when it’s not,’ said McLeod.

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We asked McLeod about how finance professionals can get into this field, whether it’s a good avenue for junior professionals, the skills and qualities businesses are looking for, and the importance of being tech savvy.

Is freelance and contract work an area that junior accountants and students should consider as a valid career paths, or is it largely reserved for more experience professionals?

You’re correct in your assumption that currently the demand is for more experienced professionals. The main reasons being that these individuals already have a proven track record and experience to add value on day one, with minimal if any hand holding. They are battle hardened to getting up to speed quickly and delivering within specified time frames.

That being said, we continue to see an increase in demand for more junior resources who can undertake less complex, less technical pieces of work. With an acceptance from the end users that there will be an element of training, developing and mentoring for more junior finance professionals, there is nothing to say that in the fullness of time this area and the demand will increase.

However, it’s my belief that students and graduates are better off learning their chosen craft with a full-time employer. They will better understand the requirements of their role, build camaraderie with their peers and better develop interpersonal and communication skills. I also believe that they will become more aligned and positive about the company / brand they represent and develop additional life skills and experiences they can then utilise in their careers in future, whether that be as a full time or freelance resource.

What skills, qualities and attributes do you need to be a successful contract accountant or virtual CFO/FD?

The skills required to be a virtual FD/CFO are the same required as those in a physical fixed place of work. You need to be knowledgeable within the role in terms of the day-to-day requirements. You need to be able to devise, implement and deliver strategies to help the organisation achieve its objectives.

You will need to understand the reporting requirements of the business at a group level, but also have awareness of international reporting requirements and areas of exposure for the business. They also need to have experience and knowledge of the various funding options available to the business. This is especially important to a startup that is looking to match its growth to its ambition.

Importantly they must also be exceptional communicators who can build relationships and that can portray a vision to their colleagues, investors and a wider stakeholder group that creates passion and motivation to drive success.

The only way to achieve these qualities and attributes is through a varied career that offers exposure to each of these elements. Consider the path to CFO as a game of chess, where you need to make the right moves at the right time. By doing this you will add these skills over a period of time that will allow you to be knowledgeable and authoritative on the required areas that allow you to succeed. This also makes the move to a virtual offering easier due to reputation and the confidence that experience brings.

How important is being technologically savvy within this skillset?

Most startups these days have an element of technology influencing either their origination or speed of growth. Therefore, it’s vital that students are tech savvy and aware of emerging trends. Also being aware of emerging technologies in relation to accounting packages, e.g. cloud-based systems and their capabilities, will allow for more efficient, cost effective reporting.

Usually involvement with startups comes through growth campaigns or through contacts. Therefore, I would encourage students to maximise their network and leverage relationships they have with the ACCA and business communities to grow their profile and awareness of such opportunities as they present themselves.

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