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Marcopolis presents Kenya Report focused on topics such as investments, doing business, economy and regional integration, featuring interviews with Kenya's leaders. The sectors under review in this issue are agriculture, banking, energy, industry, telecom, IT, tourism, logistics and many more.
InterviewsJune 30, 2022
Leading Kenyan Accounting and Advisory Firm Ronalds LLP to Strengthen its Presence in East Africa
Ronald N. Bwosi, Group Managing Partner at Ronalds LLP
- Written by Sandra Francisco
- Published: June 30, 2022
Interview with Ronald N. Bwosi, Group Managing Partner at Ronalds LLP
How did Ronalds LLP get started?
Ronalds LLP is an accounting and advisory firm based in Nairobi in Kenya, where our main office is, and we also have offices in Uganda, Tanzania and Ethiopia. We also work with companies in South Sudan and Somaliland, as well as other parts of the East African region. In Kenya, there are the popular Big Four, but in terms of independent accounting firms, we are the number 1 indigenous firm as per the international accounting community for 2021. We started out in 2010 and we looked at what is the uncontested business in this region. We realized that there were so many clients, especially the SMEs, that were being understaffed by other firms and because of that, we created a firm to respond to their needs. A company that offers them quality and value for the money to make them feel more respected and given a good service experience. So it was on that basis that we formed this firm. Since then, we have grown in leaps and bounds. Even though we were formed on the premise of an SME firm, we have now grown to offer services to multinational companies, particularly those that are seeking to enter Kenya and the East African market. We have also served other companies in terms of state corporations, and we have served the Government of Kenya. We have worked for financial institutions, meaning insurance companies and banks that have approached us for our advice and we have responded to their needs effectively. Currently, we have more than 100 employees operating across the region. At the top level, we have an advisory board, we have seven partners, and we have managers and senior managers on the team. We normally serve four industries – the public sector, NGOs, the corporate sector which comprises oil and gas, manufacturing, real estate and retail industries among other profit entities, and now financial institutions such as banks, insurance entities, SACCOs and pension schemes. Globally, we have representation through our partnership with Allinial Global, which is ranked the second largest accounting association in the world by the International Accounting Bulletin (IAB), so it is quite an honor for us to be part of such a large accounting association. Because of this, we have a lot of peer review. We benchmark with other firms across the globe because Allinial Global has very large firms in America, Europe and Australia. At the same time, we get training. I was just in Spain for training and capacity building for our teams. And of course, we also get a lot of international referrals for clients from other regions wanting to come to Africa, and of course the East African region, as we have other partners in South Africa and West Africa. We have partners in Ghana, Cameroon, Nigeria and Senegal. It makes us not just a local firm, but a local firm with global connections to make us a well fit firm for any client that is looking for service, especially in that sector.
What are Ronalds’ competitive advantages?
We excel more in tax. We are a leading tax firm in this country for both local and international tax. We are one of the few firms that offer international taxation and also offer transfer pricing services. Our number 2 service is as a more quality-oriented audit firm in terms of external audit. Our audit is quite encompassing. Our process involves issues like systems audit, tax audit, compliance, and governance, so it is more like a consultancy approach rather than a traditional audit approach. We really stand out by offering a more differentiated public service as opposed to the traditional audit engagement that other firms offer. At the same time, we have a very good team in terms of cloud accounting. We cooperate with Xero Accounting globally and have Xero code advisors, so we are very good in tech advisory. We mostly perceive ourselves as a tech-based audit firm in this region.
What is your assessment of the industry in Kenya, and East Africa?
The message from the peer review when we benchmark with other industries in this region, is that Kenya is on top, especially when it comes to audit accounting services. When we benchmark with our peers in Europe, and London in particular, we realize that there are still some areas that we need to catch up with such as risk management assessment. Essentially, the reason why some entities in the global market have really matured is because there is a lot of risk element, especially gaps in the quality of audits of various auditing firms to help investors. There is room for improvement, but in Kenya, we are ahead. At the same time, there are some capacity issues in the accounting industry around the world whereby firms are facing human capital limitations and that is something accounting firms have to respond to. And there are other emerging issues like how accounting firms can embrace technology. There is ground to cover in artificial intelligence, machine learning and robotics, and blockchain, so we can make sure that we can offer our clients more real type services. Even though as a country we have taken the right steps to strengthen the quality of our audits, there is still a lot to do if we are to compare ourselves to other countries especially in the area of technology, training of the human capital and capacity building, and in terms of meeting the customers’ or clients’ expectations.
Has the push to adopt smart business practices impacted your business?
The impact is phenomenal. We have had quite positive results. We started the tech drive in 2014 and we signed a deal with Xero in the UK to be able to invest in cloud accounting. And since then, we have been growing at a good percentage rate of almost 40% every year. Clients are interested in more modern firms that have systems in place to help them. Another area that tech has had an impact on is client services, because automation of our processes has made it easier for client onboarding. And the other area that tech has helped us in is collaboration. We have tools, particularly in the case of the cloud that we use for audits, that enable us to have real time collaboration with our clients and that increases customer satisfaction. It has also increased our revenue.
What are some of your company’s success stories?
I am speaking to you from the Ronalds LLP head office just next to Deloitte and after KPMG, so we are in between, where we have our own property, and we count that as one of our greatest achievements. The property was launched just two weeks ago (early June) by the chairperson of the Nairobi Securities Exchange. Currently, we are servicing more than 1,000 entities in the East African region including local, global and government, and of course a lot in the NGO world and that is also a remarkable achievement. Another issue is to be recognized by Xero as a gold advisor because of the numbers we have done in cloud accounting. We are also voted as the most innovative firm in Kenya recognized for excellence. And to be accepted by Allinial Global as their representative in the East African region is not a mean achievement because they don’t choose just any firm. They look for firms with quality aspects and we are very proud to be associated with Allinial Global and to be able to be their point firm in the East African region.
Is Ronalds looking for equity partners, or investors with cash and awesome sales?
We are looking for investors who come with cash and of course know-how. If there are things we can borrow from investors then that would be an added advantage. If you look at our vision to be the number 1 professional firm in Kenya and the region, to do that you need a lot of money and you need know-how. If you have an investor with enough funds to unlock that opportunity we would appreciate it, but at the same time, one who brings onboard some know-how in terms of technology and people who have an understanding in building capabilities, especially in other services that we do not offer, then that would be an added advantage.
Do you have any major projects underway at the moment?
Yes. We always have projects running and currently we are working on client accounting services. We have examined the European and American markets and we believe most of the practices around them require labor and this labor, because they are high-cost markets, is not accessible to them. So, we are introducing a department for outsourcing client services remotely for these firms in the American market and parts of Australia. The advantage we have in Kenya is that we have access to capital. We have so many employees who are qualified CPAs and chartered accountants. If we train them, we can place them with companies in other regions remotely. That is the biggest project that we are working on currently. The biggest challenge now for the market is labor. We have developed a platform which is a rich database of employees in Kenya who are available with their CVs and qualifications, and you can always source people from there. These are the two biggest projects that we are working on.
What is your medium-term vision for the company in the next three to five years?
In the next five years, we want to be the number 1 gold standard firm in Kenya in terms of the impact that we have, especially among local businesses. We believe that is quite achievable. We have the right people. Our number 2 priority is to strengthen our presence in East African countries such as Tanzania, Ethiopia and South Sudan. Rwanda is up and running. Uganda is up and running. Entrenching our services in the East African region is of paramount importance. Of course, we also have strategies to develop more people as leaders within the organization which is an enabling factor for us to achieve all of these objectives. For us, being the number 1 firm in East Africa in the next five years. Currently, we are around the top 10, so number 1 is good enough and maintaining it.
What is the inspiration that drives you?
One is love for people, and two is love for businesses. I believe that business is one of the best ways to transform our society. Good quality managed business. I realize that there are a lot of challenges, especially in the management of African indigenous firms and giving them a professional perspective and interventions that will help them grow stronger, generate wealth and become generational. That is why I started this firm, to help support businesses because I realized that there is a lot of opportunity to help local businesses if they organize themselves in a professional way. Help them to be more professional, more sustainable, to be profitable and increase their strength to service their clients and in return, we are able to grow as a practice. So, we grow on the basis of that background.
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