Pete Denholm, Managing Director – Northeast & South Florida, Supporting Strategies
Pete Denholm, managing director of Supporting Strategies I Northeast & South Florida, spoke with Invest: about the state of advisory services in Jacksonville and Northeast Florida, as well as the issues surrounding AI. “The technology is going to sort of take over a lot of the heavy lifting, but it’s going to take a while to really get there and be good and clean,” he said.
What have been some of the main highlights or milestones for Supporting Strategies over the past year?
Let’s start with Supporting Strategies as a franchise. I’m a franchisee, and I have the rights, if you will, to market across Northeast and South Florida. Among the things that I would say have been monumental for me is that I’ve taken on a partner in the business and, at the same time, worked on a deal with the franchisor to expand into most of the rest of the state of Florida. Right now, I’ve got a couple of people on the ground helping me with sales in South Florida. We’re going to be expanding into Orlando and maybe more along the East Coast and the Panhandle of Florida. And simultaneously, we’re getting ready to close a deal for our second acquisition within the system. We’re purchasing another franchise in the Research Triangle area of North Carolina. We’ve got some fun things going on. It’s definitely not the status quo for us.
What is your overview of the accounting sector in Jacksonville and in Northeast Florida more generally?
We are not a CPA firm. We provide bookkeeping or accounting controller services. As a result, I have relationships with a lot of the CPA firms because, honestly, they’re also my best referral partner. That’s where businesses go and trust when they have problems with their books, and the CPAs will recommend somebody they trust. A national trend we are also seeing in Jacksonville is consolidation among CPA firms; the changes amount to an aging out, if you will, of partners who are selling and moving on. What I feel I’ve been seeing more of in the last couple of years is that type of change.
The other thing we’re seeing, which is also a national trend, is the constraint, if you will, of labor resources for the industry. Fewer people are going into the accounting industry. I’m finding that CPA firms are getting pickier about the clients they pick for tax advisory services, which doesn’t affect me as much. I’m more of an outsider looking in from that perspective, even though I’m still lumped in that industry. I’m fortunate to not be as affected because my employees are hundred percent remote.
We’re also seeing prices going up for filing taxes. Again, I think that’s more of a national trend too, but we’re absolutely seeing that here. The CPAs are getting pickier, meaning you’ve got to be a cooperative client if you want to work with certain firms. And they’re quicker to get rid of a client who’s just a little bit more difficult to work with or who doesn’t have a really good set of books. That’s why they like us. Once they see our name, they’re like, oh, alright, this is going to be a little bit easier. They don’t have to worry about the books. They’re going to be good, they’re going to be clean, so it’s going to be easy.
Which of your services do you anticipate will be the main driver of growth in the near term?
As Leslie Jorgensen, the CEO of Supporting Strategies, the franchisor, will say: the robots are coming. The robots are going to come and be in this business, tracking a high volume of transactions at times and stuff like that; it’s easy to leverage. AI is an overused term, but to leverage smart technology to do bookkeeping makes a whole lot of sense. We’re moving upstream: we’re making sure that we’re providing much better, more insightful reporting as opposed to just blindly putting in transactions. We’re sitting down with our clients, identifying metrics, helping them understand the financials, and providing a little bit more advisory. I would say adding value and moving upstream is key for us. The technology is going to sort of take over a lot of the heavy lifting, but it’s going to take a while to really get there and be good and clean.
For us, technology is beginning to take over and as a result, I’m seeing more competition. Ten years ago, when I first started, a lot of the CPA firms did not know how to do things anywhere near as well and as efficiently as us because we were leveraging technology earlier than everyone else. I would say we were an early adopter because the model had from the beginning been a hundred percent remote. Other firms weren’t doing it that way. Now I’m seeing more competition from those various CPA firms that I have relationships with. It’s not unusual. I’ve had a couple conversations over the past year or two where they’ve sat me down and said: we’re making a bigger investment into accounting services. Well, I guess we’re not referral partners anymore. So, the landscape is changing.
