Disgruntled accountants have created a successful business for Michael Macolino.
"We call them the angry, young accountants," Macolino says.
"They are typically aged between 28 and 40. They are in mid-tier and larger firms. They feel they are crunching numbers [and] they can't support their clients properly. They are bound by old technology and the old 'this is how we do things'. Really what they want to do is take a new approach and develop long lasting relationships with businesses."
Disrupting traditional accounting
This disenchantment is fuelling the rapid growth of Macolino's technology start-up Accodex which provides a platform for technology enabled freelance accountants.
Speaking to MySmallBusiness at the Salesforce World Tour in Sydney last week, Macolino describes Accodex as "for accountants leaving the confines of traditional practice and going out on their own".
The platform integrates with accounting platform Xero and aims to provide accountants with the other tools necessary for running a business.
Based in Adelaide, Accodex turns over $3 million a year with 20 "partner" accountants but has ambitious plans to grow to 1000 partners over the next 10 years.
Macolino, 33, is a serial entrepreneur with a background in technology consulting.
He teamed up with his friend, accountant and co-founder Chris Hooper, along with Marcus Cirillo and Mike Wilczynski to start Accodex.
The four "mainly boot-strapped" the start-up, which has 17 employees in Adelaide and five back office staff in Manila.
Accodex raised $180,000 in 2015 from private investors, with a further $250,000 capital raise in 2016 from the same investors.
"We wanted to take advantage of this move in the labour force with a lot of accountants leaving the big accounting firms," he says. "Technology like Xero allows them to do that but there was a gap in how to sell, how to market and how to create these businesses."
They are in mid tier and larger firms. They feel they are crunching numbers they can't support their clients properly.
Michael Macolino
Age drop for accountants going it alone
This labour force movement is backed up by CPA Australia's data which shows the average age of members going out on their own dropping from mid-40s back in 2000 to early to mid-30s in 2017.
Peter Docherty, general manager of public practice at CPA Australia, says some young accountants are wary of working at big firms.
"A lot of them have heard horror stories or had horror stories about expectations of hours working," he says. "They are looking at the potential to be pigeon-holed into one area of specialisation and a lot of people want to provide more broad-based advisory services to clients. Bigger firms focus a lot on audit and a lot of graduates are not attracted to audit."
Docherty says accounting graduates want a lot more out of their career now, demanding more client engagement and more control of their destiny.
"We are seeing that change of mindset and some of it is technology and some of it is lifestyle choices," he says. "In the past they saw accounting as compliance driven and now it is more focused on business advisory."
Labour force disruption
Macolino says disruption is happening across all professional services.
"It's a convergence of factors with technology being available so you just need a laptop and internet connection to start a professional services practice," he says. "With labour force disruption a lot of the grunt work and back of office can be outsourced overseas so you can be more customer facing while producing the work."
Macolino says Accodex is using technology as part of its growth strategy and uses platforms such as Salesforce to provide a unified experience to its accountant partners.
Accodex is working closely with its existing 20 accountant partners, described as "beta partners" to fine-tune its offering.
"They are very involved in our feedback loops," he says. "We want to be able to take these partners and see how we can get them up to speed. Once we get that feedback we will move to more aggressive scaling."
Using Salesforce, Accodex's systems will be able to take on 100 partners in a quarter.
"We can focus our time and resources on building that platform without having to worry about coding," Macolino says. "We feel our competitive advantage is adapting quickly to the market."
As more accountants move from the big and mid-tier firms Accodex wants to be able to offer an alternative.
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