finance

ADVERTORIAL: Shining a spotlight on the tech sector



Now, more than ever, technology should be at the heart of every business which offers opportunities for those companies providing tech solutions to accelerate their growth. Businesses have to embrace technology in new ways to increase efficiencies and streamline operations, and, most importantly, keep their employees safe as we are faced with public health challenges.

Government support measures have gone a long way to help steady the ship for many businesses and, as the country begins to ‘get moving again’, many firms are hopefully seeing light at the end of the tunnel as market activity increases.

At a time when businesses have a renewed focus on efficiency, having access to meaningful data to aid decision-making is key. With this in mind, cloud accounting software applications such as Xero are now a must-have and the benefits for businesses are clear to see, including remote access, multiple internal users with varying permissions, and login access for trusted advisers. There are also apps on the market which will ‘talk to’ accounting applications like Xero, for example, multiple stock management systems and cashflow apps such as Float.

Accurate management accounts every month is one of the three key pillars that support any successful business and ambitious tech companies looking to grow or attract investment should introduce this discipline as quickly as their budget will allow.

The second pillar is having a trusted adviser to meet with every month to help interpret the profit and loss account and balance sheet.

The third pillar is having timely and accurate annual statutory accounts and tax returns prepared. The more accurate the monthly management accounts, the easier it should be to prepare the annual documents.

My advice to tech companies is to have these annual documents prepared as soon after the end of the financial year end as possible. Most tech companies will be submitting research and development (R&D) tax claims meaning cash coming back into the business. Companies should aim to access this cash as quickly as possible after the year end.

AAB’s virtual finance function (VFF) is a bespoke solution designed to deliver the three pillars. Not all companies either need to, or can afford, a full-time, in-house team of finance professionals. VFF is a technology-based solution which frees up time for founders and leadership teams to focus on running and growing the business.

VFF uses cloud accounting applications such as Xero, provides that monthly interaction with an experienced CFO-level accountant, and ensures that all operational, finance and compliance needs are met. The needs of scale-ups as well as established companies can both be met.

While outsourcing elements of a finance function may not be a new approach for businesses, a focus on this approach has certainly been heightened over the last few months. Companies may be looking at both their headcount and office-space, so I’d advise any company to at least consider a more flexible, cost-effective way of delivering key financial data to the decision-makers.

VFF is not limited to the processing of daily sales and purchase invoices. It encompasses other time-consuming and ever more complex processes such as payroll, VAT returns, expense claims, and so on.

Payroll in particular has become more complex in recent years and is an even greater challenge when employees are working overseas on a temporary or full time basis. Recording employee movements and then reporting on this is, for many businesses, a manual process and is typically where mistakes can be made, often resulting in exposure to incorrect reporting and underpaid taxes.

At AAB, we have invested in technology to automate the process, making significant time savings by producing the calculations and automatically feeding the data into the accounting system, thereby reducing the risk of manual error and ultimately reducing costs.

This approach can also be applied to other processes involving manual data input such as time recording and stock management. Using existing software or developing bespoke software solutions can ensure the data is uploaded quickly into the accounting system, providing management teams with up-to-date and accurate information to help manage the business.

While no one can fully predict what the remainder of 2020 will look like, the changes and developments we have seen from a technology perspective – both the sector itself and the use of tech across multiple sectors, business types and indeed across the world – can only be set to continue. Tech may well be increasingly in the spotlight more than anyone could have anticipated. 

Ian Marshall is a director and head of tech strategy at Anderson Anderson & Brown



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