Digital and Accountancy: counting the cost of not being active in a digital age
While many industries have been seen to transition to the digital age quite easily, accountancy has still been seen as stuffy, tired industry.
But that's changing. Not only are firms like Mint bringing it into the modern era, larger firms like Campbell Dallas are also bringing in change and finding that with that, comes new business opportunities.
However, as Donald Boyd explains, while many think the transition to digital has been hard for accountancy, it's actually been quite the opposite.
Donald is speaking at the Ayrshire five-day event Working Digital which is dedicating a day to the issue of funding - from kickstarting your own money, accounting advice and, obviously, banking.
Has the movie to digital been an easy one or a traumatic one for the accounting industry?
As a profession we have a bit of a geeky image so sometimes that goes hand in hand with leading technology. We have always been big followers of Gates, Jobs and Blackberry.
We have been through a number of changes in the past from the abacus to the calculator to becoming spread-sheet whizz kids so the recent digital revolution has been nothing too scary for accountants.
As with any industry you have to move with the times and offer Skype meetings with clients, cloud-based book-keeping and even pick up new work on Linkedin and Twitter.
Sure there are threats, and remember it is the accountants who have to turn the lights out in businesses such as HMV, so we are well aware that to stand still lead to armageddon by a new disruptive competitor.
In my view thought it will be those who keep their professionalism and embrace digital as a tool to deliver excellent professional service who will succeed.
When digital firms go looking for accountancy advice, what should they be looking for?
They should be looking for a firm that has been dealing with high tech/digital businesses for a number of years.
Those advisors who have been through the dot com bubble in the 1990s and the Video Games industry boom are well placed to understand the sector.
It is important to understand the fast moving nature of the industry and that the digital world sometimes won’t hang about for a fund raising exercise – it can be quite cut throat at times.
The accountancy side of things should take care of itself with any reputable Chatered Accountant however it is those who get digitial and creatives that differentiate themselves from the competitors who are best placed.
A fantastic network and black book also helps in advising any digital business. This is important as digital touches all industries and it is important that ay accountant advising a digital business has a broad range of traditional clients.
Have digital firms made the most of taxation advice that can save them money?
Digital sector is fortunate as there are number of areas of tax planning that are available to them. I have dealt with R&D tax credits and film tax relief in the last few months and this is an area of taxation that lends itself to the sector.
Also when looking for investment there is a fantastic tax break under SEED EIS which reduces the risk of an investment for an angel investor in an early stage company.
SEED EIS can potentially reduce the cash risk of a £50,000 investment to less than £20,000 cash risk. Traditional EIS is also available for larger investments and this can work very well.
Incentivising key staff is an important area and there are tax efficient ways of getting equity into the hands of key staff by way of EMI Share options, hurdle shares and growth shares. There is also some ‘free’ cash available under the government’s temporary NIC scheme.
What's the one useful link you can share with people that you think Working Digital attendees would like?
I don’t normally recommend a government website nor even HMRC but this link is very useful.
In essence, if you have started a business between 22 October and 5 September 2013 you may be eligible to join the Employer NIC holiday scheme. This scheme has not been widely advertised but allows qualifying new start companies to claim up to £5,000 to cover employer NIC for each of the first 10 employees, potentially in theory £50,000. Although in practice very few new starts will have 10 employees starting at the kind of salary that will result in this saving.
We have recently submitted a claim for a client to generate a £7,310 rebate. New business entering the scheme will benefit from reduced monthly Employer NIC liabilities. The scheme runs until September this year but can be applied for retrospectively.
Tell us about one interesting project you're working on...
Currently working with Stratus Data Logic in a fundraising for a MMO of a Global Cartoon brand – Monsuno.
Other Working Digital posts
Interview by Craig McGill