Takeaways from London’s 2024 Digital Accountancy Show
Last week, Aidan Elliott, Investment Manager on our Global Private Equity team, attended the Digital Accountancy Show in London, engaging in educational talks and meeting with leading financial technology and service providers.
At Baird Capital, we are actively seeking investments in software and services companies that support the Office of the CFO. While the show covered many further areas, four critical topics with the potential to impact the Office of the CFO stood out to us:
- AI – AI was by far the topic with the greatest engagement at the Digital Accountancy Show, with many discussions focused on how finance professionals can practically leverage AI to drive efficiencies. Currently, AI is very capable in situations that involve pattern recognition (e.g., automated fraud prevention, reconciliations, data entry, call/note transcription, etc.). Still, its capabilities across more complex advisory and insights are limited. These capabilities have evolved quickly in recent years and will continue to expand further up the complexity ladder.
The general view is that while AI will not replace the need for humans within the finance function, finance professionals must embrace and use AI to drive efficiencies and avoid being left behind. There is a steep learning curve in the adoption of AI, and industry professionals need to dedicate the time to appropriately upskill their AI understanding and embed it into their workflows. - Finance outsourcing – Growing demand and a shortage of qualified accounting talent in the U.K. and U.S. creates challenges for many businesses looking to source finance talent onshore, at scale. This is driving growth in demand for outsourced finance providers that can enable their clients to access finance talent in markets such as India, the Philippines and South Africa, where accounting talent is more abundant and available at a much lower cost. Businesses often start their finance outsourcing journey in discrete, lower-expertise areas of finance (such as data entry, payroll, accounts receivable, etc.), growing over time as they gain trust in their outsourcing partner into areas higher in the value chain.
- Cloud cost management – The cost of SaaS solutions has ballooned in recent years, and while this has delivered operational efficiencies in many cases, businesses are increasingly seeking ways to gain better oversight of their SaaS licenses across the business. Several SaaS cost management solutions do just that, giving insight into the usage of SaaS solutions across the business and ROI delivered and putting a greater level of control into the hands of the CFO & CTO when it comes to renewal or procurement.
- Software rebundling – The number of software solutions available to businesses to streamline their finance function has grown significantly over recent years and is highly fragmented. Many businesses use multiple point solutions across their finance function, which can be complex from a management and staff training perspective. Whilst there will always be a need for best-in-class solutions for specific use cases, there is a growing desire amongst businesses to utilize solutions that bundle multiple capabilities under one platform (e.g. combining accounts payable, accounts receivable, and cash flow management).
Baird Capital has been following the finance technology ecosystem closely for some time now, with a focus on providers serving the Office of the CFO. The scale of the Digital Accountancy Show showcases how quickly this market has grown and the sheer breadth of solutions now available to support accountants and CFOs in automating, outsourcing, and streamlining their finance functions. Most businesses are early in adopting many of these solutions, but this is increasing with growing awareness of the benefits they can provide, and the future growth prospects for finance technology remain strong.
Aidan Elliott, Baird Capital
About The Platform
Baird Capital invests in B2B Technology & Services businesses where we can make a meaningful difference. In the U.K., this means supporting founder-owned businesses seeking to grow in the U.S., where we can leverage Baird’s brand and connections across its ~5,000 U.S. employees to accelerate growth.
The following four key pillars underpin our investment strategy:
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Exclusively B2B Technology & Services, with business models/or serving end markets we know well |
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Founder-focused, where our reputation for being a reliable, straightforward and honest partner resonates |
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U.S. growth ambition, where we can leverage Baird’s brand and relationships to support companies’ growth |
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Flexible Capital - £20-50m equity investment with the flexibility to consider minority/majority equity positions, primary/secondary capital, and stage of development from high growth loss-making businesses through to more traditional buyouts. |
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