If you are a tech company in London looking for an accountancy firm who understands your needs, you should go for an accountancy firm that is specialised in your industry.
This is important in order to get the most out of your partnership. Here at Metric we regard ourselves as the extension of the Company’s financial function and has therefore developed a service specially tailored for tech and innovative companies.
What does a tech company need from their accountant?
From our experience these are the areas that a tech companies normally needs support with (in addition to the normal accountancy services as annual accounts, bookkeeping and payroll etc);
1. Tech companies most often need investment
Whereas we don’t support the Company to find the actual investors to invest in the Companies we support them in the investment process.
This can for example involve;
- get ready for the investment with help with preparing the investment deck, review forecasts or guidance in how to best structure the business;
- advising in regards of the SEIS, EIS and VCT This can include an advance assurance application ahead of the investment. Preparation of all the relevant documents to HMRC in order to obtain the certificates for the investors; and
- make any necessary updates in Companies House.
Many high street accountancy firms do not have the capacity to prepare all of this work in house, instead you need to use multiple providers to complete these services. In principal this is of course not a problem, but it normally gets both more costly and also less efficient.
2. Investment normally means higher expectations on your financial reporting
Most companies that have raised investment will have to hold regular board meetings to keep board members up to date. For young tech companies this often mean to keep track on their spending and keep a close eye on their cashflow. It usually involves being on top of burn rate and timings for any new cash injections.
Many of our clients seeks support in how to track these costs/departments/cashflow in the best way and also how to best present the information to the board. Sometimes it involves preparing tailor made reporting packs that is capturing the particular needs of the Company.
3. R&D tax credit claims
Most tech companies undertake extensive R&D work and are likely to be able to reclaim part of their R&D costs from HMRC via a so-called R&D tax credit claim. Using an accountancy firm that understands your business and can decide whether your work is eligible for R&D tax credit is vital for a tech company. Please read more about the R&D claim here.
There are many R&D tax credit consultancy firms around providing these services. However, as they don’t have the same insight into your business as your accountancy firm has, it can be risky to use one of these providers. From our experience they tend to both over promise on the amount that can be claimed and leave it to the company to pull together crucial financial information required for the claim.
As HMRC can come back up to seven years after a claim has been submitted, to dispute the refund, it is important to complete the correct paperwork and only claim for eligible costs. At the point of an investigation you have likely already used all the refund from HMRC and might not have the cash to repay any incorrectly claimed tax credit to HMRC.
Furthermore, you may want to ensure that there is an insurance in place that covers any additional accountancy/consultancy fees you may incur as a result of a HMRC investigation.
4. Grants for tech companies
This is the only service that Metric is outsourcing. We have been using Olaf Swanzy from Grants Ltd for our grant applications (add a link). We tried initially to stay on top of all grants ourselves, but as it is constantly changing, we decided to use a specialist in order to maintain a high-quality service to our clients.
Now and then we arrange a grant day at our offices where we bring together clients which we believe may have a product/service that is grantable. At these meetings Olaf and one of Metric’s managers participates to review the business cases. So far this has been a very fruitful partnership that has provided Metric’s clients with many successful grant applications.
When a client receives a successful grant, we are there to support them with the necessary audit work required for the quarterly pay outs of the grant.
If you want to discuss our services or are having any questions on the above, please contact Metric Accountants.