BDO USA reported annual revenues rose 11.3 percent to $1.8 billion for the fiscal year ending April 30, 2020, while facing the challenges of the COVID-19 pandemic in the latter part of the fiscal year.
The biggest increase came in the advisory practice, where revenue rose 29.4 percent, followed by tax at 8.8 percent and assurance by 6.0 percent. BDO and several other firms have been reporting revenue increases over the previous fiscal year (
BDO also expanded its service offerings and geographic reach within the past year, including a collection of digital services through the creation of a BDO Digital LLC business in January, and office expansions in six markets over the past 12 months.
The progress came despite the challenges of the novel coronavirus pandemic this year, which affected the last few months of the fiscal year. After closing its offices at the start of the pandemic and encouraging its employees to work from home, more of them are returning as the offices cautiously reopen. “We have approximately 70 offices around the country and about half of them are back open in some capacity,” said BDO USA CEO Wayne Berson. “We’ve been monitoring the states in terms of all the advisory notices and infection rates. We have 25 percent max allowed into the offices that are open. We’ll see how it goes. We are definitely practicing social distancing and good hygiene.”
He pointed to BDO’s investment in technology as helping the firm cope with adjusting to COVID-19. “Over the last few years we've invested tremendously in building a resilient, sustainable businesses that can survive amid uncertainty,” said Berson. “We have prepared ourselves for a situation like this. I don’t want to jinx anything. But it really is something that for us was very important, to engage in long-term strategic thinking really built around sustainable growth and business resilience. When you think about how we navigate something like this, it does start off with that, but it also revolves around our people, leading with purpose.”
He sees the firm’s mission as helping people thrive at BDO, as well as their families, their clients and the general community. “Over the last few years, we have been doubling down on digital transformation and continue to take intentional action that helps position our firm and our clients for a long-term recovery,” said Berson. “That's the way we’ve gone about it, similar to most, I guess. For us, it’s innovating with purpose. Anything revolving around technology or culture, we see as enabling business resilience. You’ve got to have the right culture inside the firm, or nothing works. You’ve got to be able to embrace technology.”
Over the past decade, he noted, BDO has had a sustained digital investment strategy. “That approach proved critical to meeting both the client and the employee needs, as well as protecting our revenues as we navigate the fallout from the pandemic,” said Berson. “When you look at what’s happened to BDO, we’ve had tremendous growth over the last eight years. That is an absolute credit to our world-class workforce and the dedication to exceptional client service and purposeful innovation.”
In the past year, BDO expanded its service offerings and geographic reach. “These expansions that we entered into are designed to facilitate an improved client experience,” said Berson. “They definitely are key drivers of our growth. Our expansion growth over the last eight years has been big, but it’s still dwarfed by our organic growth. But from our side we like to see the organic growth year over year. That’s been very good and reassuring to see. At the same time, it helps our people embrace our core purpose of helping people thrive every day.”
Over the past year, BDO has seen growth in all its practice areas, but especially on the advisory side. “What’s happened in terms of growth, we have achieved strong growth across all our business lines,” said Berson. “Advisory is up 29.4 percent, and that equates to about 23 percent of our business. Tax is up 8.8 [percent]. That’s 31 percent. Assurance is up 6 percent, which is 46 percent [of BDO’s revenues]. I think we came from a position where we needed to build out our advisory practice more than we needed to do tax and assurance, so this enables us to be a more well rounded firm. It helped give BDO a broader and deeper bench of specialized services that help add value to existing client relationships.”
The economic fallout from the pandemic has helped with services such as business restructuring, which helped BDO leverage an acquisition it did last year of a firm called Loughlin Management Partners, which specialized in corporate restructuring (
“A number of businesses are struggling,” said Berson. “A year ago, we spoke about an acquisition we did of a business restructuring practice. That was our planning for a downturn in the economy. We saw that transaction advisory practice was pretty well knocking the ball out of the park, but in a down economy things reverse and it’s the restructuring that really comes to the forefront. That’s why we invested in that, and now we’re able to play off both because that transaction advisory service is actually coming back as well.”
The spate of natural disasters due in part to climate change has bolstered another advisory service at BDO. “The other advisory practice that’s really doing well is our insurance practice, where we are dealing with a number of natural disasters, whether it’s a hurricane, a flood, even the pandemic,” said Berson. “With all of this, we help clients look to their insurance carriers. We help them quantify the damages and work through that. What turned out to be unfortunate for many people has been a good service that we’ve been able to provide to these clients to prosper by providing the data for them.”
The BDO Digital unit has also been thriving. “The entire world is moving more digital,” said Berson. “For anyone to survive in today’s times, you’ve got to be able to embrace technology and a digital platform. Many of our clients who engage us now are looking to digitize their information. Companies are coming to us that have not invested in technology and digitized everything because they can’t survive today. For instance, we talked about the offices that aren’t open. As long as the client can give us information, we’re able to do our work. That’s because we are digital. But now we are providing a service to companies where we’re digitizing their operations, making it easy for them to work remote. That has been a major success in advisory.”
BDO has also been helping banking clients with the Paycheck Protection Program under the CARES Act, helping them set up systems to process thousands of PPP loans.
“There’s been a lot of additional services we’ve been able to provide,” said Berson. “In order to be sustainable, you’ve got to be resilient amid uncertainty. What we’ve done is we’ve tried to build a foundation of stability and trust, and in doing that you sometimes have to take some calculated risks. That would be around opportunities. We see uncertainty as an opportunity, not as a threat. Then we’ve invested relentlessly in our people. You’ve got to do that. Every job today is going to change substantially within the next five years. We believe that leaders must be proactive to help their people as well as their business adapt. That’s what we try to do. We’ve been practicing what we preach to our clients.”
With so much uncertainty about the outcome of the elections in November and what impact that will have on taxes and other areas, clients are asking their accountants for advice on what to do. “We’re definitely seeing a lot of proposals out there in assurance, tax and advisory,” said Berson. “We’re getting a lot of requests for work. You talk about elections and the political landscape. BDO is built on unity, respect, integrity. There’s a deep profound progress on the challenges we face that will only be made if we all work together and find our commonalities while respecting differences. Like our clients we are a middle-market company facing extraordinary, once in a lifetime events. We live by the advice we give our clients: Focus on your people, think long term, and plan for every opportunity and challenge. There’s a lot out there, but you’ve got to do it.”
