100% Pure and Fresh Part 2

by | Sep 14, 2023 | Choosing an Accountant

100% Pure and Fresh

Part 2 – Time for a Fresh Approach

In Part 1, I described changes that have happened in the past 21 years that Accountech has been serving tech companies.
In this second part, I describe a fresh approach which better fits their needs.

A Fresh Approach
Tech start-ups need more and different help from other clients.

Systems
They need to get their systems right from the start in anticipation of what they will become and who will invest in them. They need an accountant who is more a part-time member of their team than a once a year auditor.
Cloud accounting has driven more efficient data processing, enabling better quality information to be available more quickly. Thus the role of the accountant has moved from the traditional focus on historical data to a more future based predictive approach, with an emphasis on measuring performance in real time, forecasting future growth, and modelling scenarios.

Picking winners
They need an accountant who treats every client as if they were their only client, who limits the number of clients that they work with to just the very best, and who acts like a part-time member of their team.
Perhaps our greatest advantage over the traditional firm is our ability to “say no” and to be selective in the clients that we work with, so that we exclusively work with companies that are a fit for our model.

One stop shop
Tech start-ups do not need an accountant who explains every detail in broad technical jargon, they need an accountant who can explain finance and tax matters in a way that they understand and is relevant to their business, who can spot potential problems in advance, and who will bring in experts as they are needed.
An accountant who can help with financial projections, EIS tax advice and strategy but also provide a solid base of bookkeeping, management accounts and VAT returns.
One who can integrate management accounts, yearend accounts, financial projections and R&D tax credit claims into a seamless, efficient process, while understanding your business as if we were part of it ourselves.

Experienced team
Tech start-ups need a team with experience of working with other tech companies like their own, knowledge of tech sector specific subjects such as SMART grants, Innovate UK grants, R&D tax credits, financial projections, share option schemes, and with connections to others in the Tech ecosystem who can help them: both other tech start-ups and complementary suppliers who provide other services that tech start-ups need.
Tech start-ups do not need people who have spent their entire career working for an accountancy firm.

A Long Term Approach
Tech startups need an accountant that can take a long term approach and see the potential of what they can become, rather than just what they are now.
Jim Collins and Bill Laziers say in “Beyond Entrepreneurship 2.0”:
All of the great companies of today started as start-ups and small businesses.
It is best to build on a foundation of greatness as early as possible.
It is statistically remote to turn a big mediocre company into a great company – it’s far easier to do it while the company is still small and malleable enough to become great down the road.
You need to get things right from the start.

Lower Costs
Tech start-ups need their accounting at as low a cost as possible until they raise investment and become self-sustaining.

How to reduce the overheads of an accountant for tech companies
3 ways in which the new model reduces costs are:

(1) Subcontractors
Traditional accountants have all of their specialist staff on their payroll rolled into their overhead to be recovered.
We instead use specialist subcontractors such as tax experts, PAYE and VAT experts, grant auditors, cloud accounting specialists as and when they are needed. Clients only pay for what they use. The “great resignation” has resulted in highly experienced specialist staff leaving to start their own businesses. Often because they want to work with exciting tech start-ups but were unable to at the traditional firms as start-ups could not afford their charge-out rates. It is an amazing pool of knowledge that we have been able to tap into.

(2) Office space

Traditional accountants have large offices to accommodate their many staff but, since Covid, these offices are not fully occupied most of the time.

We instead have all of our staff working from home. The internet, cloud accounting and video calls make that the logical option for a firm working with multiple tech startup clients.

(3) Marketing spend

Traditional accountants have to keep fee income increasing to maintain growth, so every incubator and every business competition for start-ups is sponsored by them.
We instead concentrate relatively more of our resources on looking after our existing clients than on finding new clients.
Our only marketing spend is on our website and on our time spent writing LinkedIn posts and blogs like this one. Clients find us through recommendations, and they know what we do before we have a conversation, so there is no time wasted on either side.

100% Pure
If you are a founder of a tech start-up wouldn’t you rather work with a firm where the clients are 100% purely tech companies?
Where every other client is like yours and you benefit from their shared experience and contacts?
Where you can speak to other clients who have investors that you are interested in and hear what they are like to work with?
Where every communication from the firm is relevant?
Where briefings after the Budget are purely about points relevant to tech companies so that there are no parts that do not apply, to be skipped?
Where all staff are experienced and have time to get to know your company?

And Fresh
The traditional accountant model is broken for tech start-ups.
Time for a Fresh Approach.