Should you use an accountancy firm?

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Ian Marshall - AAB Group

Ian Marshall Business Advisory Services Director and Head of Tech Strategy

Sometimes enlisting outside help can give you peace of mind, so that you can focus on the day-to-day running of your business while some of the extras are handled by external experts.

We sat down with Ian Marshall from AAB Group to talk about what an accounting firm can offer a small business and how to pick the right one for you.

Tell us about AAB Group and your role?

AAB is a business-critical services group. Our main service offerings as a Group are Accounting, Payroll, Outsourced HR, Wealth Management, and Consulting.

My role is Head of Tech Strategy in the Accounting business, which means that I guide the Group as to how best to service tech-focused SMEs, predominantly in Scotland.

What services do you provide?

The services you would expect an SME to require right through its growth journey. To begin with, we talk about the 3 pillars at AAB; Accurate management of accounts every month using a cloud accounting software like Xero; Access to a finance professional to help interpret these monthly accounts; and Accurate and timely annual statutory accounts and tax returns.

We also provide the other services that scale-ups require. EIS application, setting up EMI schemes for employees, R&D tax credits, company valuations, building financial models, tax compliant exporting, to name but a few.

We are very much a one-stop-shop for ambitious SMEs.

Why is it important for a business to use the services of an accounting firm?

To begin with, an accounting firm will be responsible for producing the most important documents in your company’s lifetime – the annual statutory accounts. An investor/acquirer will base the valuation of your business on these statutory accounts.

At some point, your company will be subject to Financial Due Diligence. We can help by introducing investable behaviours from the beginning to make this event much easier in the future.

What criteria should a business use to choose an accounting firm?

I would look for a firm that specialises in SMEs, can work quickly and accurately, and will charge reasonable fees.

If you are a tech-focused SME in Edinburgh, for example, it might be sensible to look for an accounting firm that has genuine experience in this field. AAB is organised along sector lines and has a specialist Tech Team who will know what advice you will need when you will need it and how much you should reasonably pay for these services.

What is different about the needs of an SME from the perspective of an accounting firm?

Where an SME might differ from a larger company is that it may not be able to afford, or indeed need, a full-time in-house Finance capability.

In some ways, it’s perhaps more important for an SME to have a good relationship with an accounting firm as the firm can supply more services on an outsourced basis. Two of the three pillars mentioned earlier would probably be covered internally in a larger company, but are likely to be needed by an SME too.

The other difference is that SMEs need regular contact through the year with their accountant, rather than just at the year-end, to provide that commercial and strategic know-how.

What differentiates accounting services for tech enterprises?

From my experience, tech company founders are doing just that – founding tech companies – as they want to do things their way. They don’t want to work (in the beginning anyway) in a large corporate environment. They, therefore, want to work with advisers who will make them feel special, as every client should be, frankly. I think they want advisers who get what they’re trying to do and care as much as they do.

On the technical side, if your accountant does not offer to do your annual statutory accounts and tax return quickly after the year-end (you’ll get your R&D cash back into the business quicker) then you’re probably speaking to the wrong one.