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Dave Gibson, the co-founder and chairman of Blu Sky, accepts the medium firm of the year award at the 2022 Accounting Excellence Award ceremony in September 2022.
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Accounting Excellence takes Blu Sky thinking

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From developing niche expertise to best-in-class recruitment strategy and staying ahead of the technology curve, North East firm Blu Sky reveals the secrets behind its 2022 Accounting Excellence award win. 

24th Mar 2023
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Now in its 15th year, North East England firm Blu Sky has built a forward-thinking practice that works with tech startups, digital businesses and those seeking funding. 

Picking up the Medium Firm of the Year award at the 2022 Accounting Excellence Awards, the firm’s success can be put down to having a laser focus on their niche client base and this permeates every aspect of the business. 

They’re so in tune with their client base that when past Institute of Chartered Accountants in England and Wales (ICAEW) president Paul Aplin visited the firm’s offices in North Shields he said: “This feels more like a tech business than an accountancy practice.” 

For founders Jon Dudgeon and Dave Gibson (above with Xero’s Joanna Copestake), the gap between accountancy practice and tech startup isn’t a huge gulf. “We were a growing startup business ourselves so we understand the pressures a founder goes through in the early stage of the business,” said Dudgeon. 

There is still time to enter the Accounting Excellence Awards, but the deadline for entries is fast approaching. Why don’t you start your Accounting Excellence journey today?

Know your client

Holding this experience has become the firm’s north star. Especially around client service, Dudgeon and Gibson have worked with the team to help them put themselves in “the shoes of the founder and put the client at the heart of everything we do”. 

Jon DudgeonFor Dudgeon (left), the CEO of the firm, this could be as simple as asking the client when they would be free for a call. But one of the most valuable services the firm provides to clients is their specialist service in facilitating growth. 

“In the early stage of a tech startup’s journey, it’s all about getting cash in the bank and having that expertise to guide them through the Seed Enterprise Investment Scheme [SEIS] round for example and take the pressure and heat away from the day-to-day while still working with investors,” said Dudgeon. 

Offering expert knowledge on tech, research-and-development tax credits, SEIS and the Enterprise Investment Scheme, in additional to traditional accounting services is, in Dudgeon’s words, like “having an accountant who’s got the expertise in all parts of the jigsaw for clients in our target markets as they’re going through [the early stages of growth]”. 

Client engagement

As one of the central pillars of Accounting Excellence, Blu Sky impressed the judges with how they designed and tailored their services around the needs of their clients. 

With a team of only 26, the firm is agile enough to work closely with clients, as opposed to “putting them on a conveyor belt and just providing compliance services”. Instead Dudgeon said Blu Sky is “very much in their business and working with them day to day”.

As a result, each client has a dedicated client relationship director. 

It has also partnered with technology companies, like business cost management tool Reducer and the cashflow forecasting app formerly known as Fluidly, to help clients save on business costs and aid government funding options. 

Having these tools at their disposal has enabled Blu Sky to launch a new tech-enabled cashflow service and board insights. 

Blu Sky’s data-driven approach to client service has led to taking on its first full-time app advisory employee and restructuring the team to include data analysts. 

“The world of accountancy is changing and we’ve got access to so much data, but I don’t think anyone knows what to do with it in any sector,” said Dudgeon. 

“What we’ve started to do is look at how the roles within our practice are much more focused on analysing the data and interpreting it and then helping clients use it to make the right decisions at the right time, which is very different from 15 years ago when it was very much helping clients pay the right amount of tax.”

The app advisory function is a result of the firm listening to their clients and this guides them from a product development point of view. “We’ve got products like a financial MOT, a financial health check where we’re going in and we’re looking at the use of technology within the finance function, and looking at various apps and ways of making things better and more efficient and running smoother for clients.”

Types of growth

While fee growth grew over 2021 and broke geographical boundaries with 30% of their new clients coming from South East businesses, Dudgeon was equally proud of how the team had grown too.  

Many firms have reverted back to pre-lockdown life, but Blu Sky fully embraced hybrid working. Dudgeon said that the Covid lockdowns released the firm from some of their baggage: while they always worked with clients on a remote basis the team pre-Covid was located in the North East. But post-Covid the firm has dropped the “Victorian art of coming into the office nine-to-five” and looked outside their region for talent across the UK. 

“We were able to go out and recruit based on values, which is sometimes harder when you’re in a smaller talent pool like the North East, and that’s allowed us to get our culture working much better and allowed us to grow and prosper.” 

From here Dudgeon said the firm has focused on the engagement and fulfilment of the team. For Dudgeon that’s looking at “how we can give the team a purpose, so that they can grow themselves and have a career with Blu Sky.”

He added, “As a small to medium-sized accounting firm, you can grow your top-line revenue or profit but if your team is growing at a different pace, then the two things don’t marry up.” 

This has led to the firm enhancing its staff performance matrix and performance reviews. As part of strengthening culture, the firm now circulates an internal newsletter to update the team on business performance.

Unsurprisingly for such a data-obsessed firm, Blu Sky also measures staff engagement through a monthly engagement and fulfilment questionnaire to assess their feeling and their health within the business and from there the firm is able to measure and improve staff engagement. 

“If you’ve got a team and a strong alignment, then the clients really feel that day to day in terms of the services that they’re receiving and the value that they’re getting,” said Dudgeon. 

Efficiency and processes

Blu Sky’s drive for constant improvement is influenced by its innovative tech-sector niche, which shapes the firm’s relationship with bleeding-edge technology. 

“Working with tech firms you need to be at the front of the curve when it comes to cloud accounting technology,” said Dudgeon. “So we've got an app stack that will work with all of our clients.”

Blu Sky’s tech engine is powered by Microsoft 365, which runs alongside Xero and Xero’s app ecosystem, while they have also developed a CRM system.   

Being so immersed in technology, Dudgeon and his team are constantly looking at the different financial processes and cycles, and reviewing different ways to automate. Whether that’s the cash collection process around credit control or cashflow forecasting, Dudgeon summed up their ethos as “looking for those 1% changes and small amounts of automation that you can then put in place”. 

Blu Sky’s use of marginal gains to grow the firm and improve processes has inspired the rest of the team to raise improvement areas too. Knowing that these changes can be made incrementally, Dudgeon said that the team feels confident to voice areas of improvement without the extra work landing in their in tray. 

“It’s just being innovative and having a growth mindset within the business,” said Dudgeon. 

Accounting Excellence

All of these ingredients were central to Blu Sky lifting the Medium Firm of the Year award trophy at the 2022 Accounting Excellence awards. 

Asking Dudgeon to reflect on what accounting excellence means to him, he went back to the client and the specialist expertise that has threaded through everything they do. 

“It'’s about putting yourself in your clients’ shoes and telling them a story through the numbers. That’s what accountants are great at. It’s also about helping clients sleep a little bit better at night because they’ve got the knowledge and support of somebody who cares and is passionate about their business. Especially during the early days of start-up.”

Feeling inspired? Why don’t you enter the 2023 Accounting Excellence Awards today!

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