Tech Talk with Omar - June 2020 update

Whilst I try to navigate my way out of the front door, let’s see what has been happening this month:

• The US is to start taking similar measures in line with the UK and other EU countries to impose digital tax. This will undoubtedly cause issues for companies considering their future investment decisions if the resulting tax system is not uniform. As a tech startup, it’s so important to understand your compliance costs ahead of expanding your business. Whilst it may be tempting to just take the plunge with overseas selling, the implications and compliance risks you expose yourself and your business to are many so from experience we would always recommend drawing up a detailed plan first. 

• Amazon’s new investment in the self driving car brilliantly demonstrates how a company can look to diversify their investment to future proof their return. Each startup is unique and they exist to solve one problem on a mass scale, but as they continue to grow on their journey they can look to acquire other technologies which can benefit their existing business (e.g. customer base, new technology, team etc.). Amazon of course is not the first to branch out; other tech giants such as Facebook acquired Instagram & Whatsapp, and more are doing exactly the same to expand their business in the right direction and increasing shareholder value.

• The FCA have ordered Wirecard to freeze customer funds to protect their money following their €1.9bn scandal. EY, having been their long time auditors, may be scrutinised for not spotting the accounting irregularities soon enough. It is still unclear what actually went wrong here, whether their finance team was intimidated by the management board to manipulate their books is one possibility. It’s not uncommon for High Growth companies to build their own finance team and take back control of their accounting function - this is when things start to get more creative.

• Covid-19 has certainly changed the way retail stores will operate in the future. Microsoft have now decided to close all their retail stores and turn some of their existing shopfronts into “Microsoft Experience Centers” including those in London. Who knows, brick and mortar stores may soon become a thing of the past but I do hope the cost savings are reinvested back into product improvements and hiring support staff to retain that engagement with their customers.

OnTheGo Accountants was founded to provide a scalable finance function to growth focused tech companies so that they can retain full control over their accounts receivable (sales invoices) and banking whilst appointing us to oversee their finance operations as a whole. We offer risk management services to SaaS & FinTech companies, which allows us to spot irregularities as and when they occur. If you would benefit from a redesign of your finance system, book a no obligation chat today with one of our finance experts on 03330 067 123 or email info@onthegoaccountants.co.uk.