Case Study – Marine Software Sector
A Marine software sector company with two Directors. Both Directors were originally from South Africa but lived in the UK, one in Hampshire and the other in the NE of England. Their Software developers were based in South Africa, and their clients were spread across the globe, with their largest one in Australia who was using their software for a major project in Canada. They had sales offices in Greece and the USA and Bank accounts in four different currencies.
With a geographically diverse client base, a host of different bank accounts in different currencies and poor access to financial data (it could take three months just to get a bank statement!) they were finding it difficult to manage their business. Their challenges were further compounded by volatile exchange rates between the Pound and the Rand.
Our Solutions and Results
Accurate Management Information
My priority was to implement a real time cloud based accounting solution (Xero) that would give me and the directors instant access to up to date, meaningful, management information.
A New Sales Model
Once I had better management Information, I could see that their income came in huge discreet packages leading to a feast and famine cycle, so I recommended a fundamental change to their business model.
Instead of selling discreet, big-ticket, packages every 3-5 years, I made a case for moving to a subscription software as a service (SaaS) model. This new approach evened out their huge income fluctuations and put the company on a much more stable financial footing.
Saving Corporation Tax
As their outsourced finance director, I also looked at their tax position and spotted that they were not taking advantage of generous R&D tax credits. These provisions meant that for every £100 they spent on R&D, they could get £225 of Corporation Tax relief. As a result of claiming these tax credits, the company never had to pay any Corporation Tax for the three years we worked with them.
During the three years that I worked as The Outsourced Finance Director for this marine software client they:
- Implemented a simple, easy to use online accounting solution (Xero) that provided 365 x 24/7 access to accurate management information via any web browser
- Changed their business model leading to improved cash flow and reduced their financial peaks and troughs
- Implemented R&D Tax Credits claims, to save them between £10K and £20K per annum
If you would like to discover how the Outsourced Finance Director can help your business grow, please contact me here.