KPMG Australia is seeking to transform its image from accounting to consulting. The firm’s advisory practice now generates 49% of the firm’s revenue and its growth rate will see it become the main revenue source by next year. “Don’t call us accountants”, appears to be its new slogan.
KPMG Australia - which consists of both a robust accounting and advisory practice – has seen its sales growth continue to outpace local GDP growth, climbing 8% to $1.21 billion.
Nearly half (49%) of KPMG’s income last year comes from its advisory practice, rather than its accounting practice. The stigma of dull and boring bean counters, often associated to accountants, has yet to be lifted from the image of the firm. To some disgruntlement from its PR management, who see the obvious flaw in this image while the firm is seeking out more advisory sales. “Those who would pigeon-hole us as an accounting firm [do so] to avoid competition, not recognising the broader threat we pose to the professional services industry because of the scope available to us,” comments Peter Nash, Chairman of KPMG Australia. “We need to move on from referring to us as an accounting firm.”
The firm’s growth rate, while not unimpressive, is still lagging behind that of its Big Four competitors. Deloitte’s revenue in Australia grew 15% to $1.3 billion, EY is posting an income rise of 14% to $1.29 billion, while PwC is turning revenues of $1.7 billion, up 10%.
Even with a lower result than its peers, the professional services firm is still on a path to seeing its advisory practice outgrow its accounting practice. Chief executive Gary Wingrove says that its annual results represent a “sustainable trajectory” and a “significant increase on where we were a year ago. Linking our trajectory with our investments in new innovation and alliances, we're well positioned moving into next year."
The major drivers for its strong growth came from the firm’s Technology-led projects, which added a 14% gain to KPMG’s management consulting practice. The firm’s transaction team booked a 13% increase in sales on the back of infrastructure deals, inbound foreign investment, demergers, and an active initial public listing sector. On the side of its accounting practice, audits saw a boost of 7% on the back of poaching a number of big deals from rivals, while its tax practice saw a small 2% rise.
With the strong gains in its consulting practice and the lacklustre growth in accounting – and with automation from the Australian Tax Authority expected to further decrease accounting sales – the effort for KPMG to successfully rebrand as a professional services firm is more important than ever.
Globally, KPMG's Advisory practice now earns $9.1 billion, up from $5.3 billion in 2006, accounting for a 36% share of total income.