Technology

An industry that is anticipated to exceed $5.3 trillion in 2022, and make up 35% of the total global market, the technology industry is driving our day-to-day lives and the opportunities available are endless. 

We broadly split our technology practice in two connected parts: Software and Hardware. We have found that as the technology industry has grown the financial fundamentals of both can become quite different, despite the natural operational and technological overlap between the two parts. 

Software developers and AI 

We recognise that not all Software is SaaS, though our SaaS pages can be found here. A largely under serviced part of the technology market are software developers and providers who have all or part of their income on a project basis, rather than being solely reliant on subscriptions. 

For these companies we understand that there are really three businesses in one. A development business building technology, a subscription business selling a product or platform, and a project business that is often people intensively laying the groundwork or customisation. The balance sheet, revenue recognition and cash flow consequences to this balance can be quite significant. 

As a result strong financial governance, systems and controls are needed to produce accurate, commercial and meaningful data to make choices from. This might be to inform decisions on pricing, margin, development expenditure or guide the next funding round. 

We also have many clients that are building and commercialising AI tools operating in various markets. This is a space we have considerable advisory experience in and we recognise that the market for AI products is likely to grow at over 38% between now and 2030. We have seen various AI companies disrupt sectors that are not innovating fast enough and have supported them through their lifecycle as they look to understand their finances, capitalise, grow and exit. 

Given the high volume of M&A transactions in the Software space we also see the value in being able to show a buyer that a business has a long history of producing fantastic financial information to guide a professional Board. 

We are auditors and advisors that understand how to really add value, capitalise on growth opportunities, spot risk, use data, and govern what are often very fast growing businesses undertaking complex transactions. 

Hardware

Hardware businesses often have a dual challenge of capital expenditure on both building advanced, complex products which can put stress on a balance sheet prior to revenue generation, and then also either building or integrating with software solutions. 

This presents a unique set of challenges in the early days when businesses are trying to balance cash and developing for a market, as well as the business starts to commercialise and is facing early stage supply chain and margin challenges. However, Hardware technology businesses are also high reward and, once there is sufficient scale, we find the unit economics are highly attractive and often matched with sticky high value customers that tie into both hardware and software revenue streams. 

We have advised a varied group of hardware businesses in verticals including med-tech, defence, sport, animal care, domestic renewable energy, energy storage and aviation. We recognise that at each stage the requirements from your accountants, tax advisors, and corporate finance advisors can be very different as the pressures faced evolve. We understand this and have the experience and expertise to help.