WardWilliams Creative specialises in working with the Creative Industries, an umbrella that covers the Events Industries. Erin is passionate about working with creatives and supporting successful business in the UK. Her enthusiasm is infectious, her support of the creative industries is inspiring and her knowledge is second to none.
Why is it important or necessary to have an accountant that specialises in the Creative or Events Industries?
"An accountant can help a business in many ways but they need to understand you and the environment you operate in. Creative sectors are often volatile. Sometimes you have so much work you can’t deal with it all and sometimes the pipeline looks totally empty for a couple of months and you are thinking about how you will survive.
Your adviser needs to understand this so that they can best advise you on how to deal with it. Building up cash reserves for when it goes quiet, helping you to decide which of the 5 jobs on the table you should take and which will just have you working hard at being poor, via job costing and profitability. Also the creative sectors have specific tax reliefs, grants and support available which an accountant who knows the sectors well will advise you on."
When choosing an accountant, what criteria should new businesses keep in mind?
"The relationship is massive in my opinion. Most accountants will give you a very similar set of accounts and tax at the end of the year as we all use the same rule book - but how you get there is very important. Do you understand the process? Are they speaking in a language you can easily process? Can they help you learn to be a better business person? They should be supporting and engaged and trying to help you reach your ambitions for the business. They should be on-hand all year round and looking forward to talking to you and not just reporting on what has happened in the past."
What are the accounting responsibilities that a new business may not be aware of?
"If you are a sole trader then you have one main responsibility and that is to submit a personal tax return every year by 31 January.
If you own a company then you must still submit a person tax return, but the company will have it's own accounts to file as well as a company tax return. There is also a confirmation statement that goes to companies house each year. The deadlines will depend on your company year end. Accounts and company tax are due for filing 9 months after the end of the company year.
For both of the above you need to keep records of income and expenses so that HMRC can come and inspect them if they choose to - but if you have a good accountant they will take care of all of that for you. They will also help with book keeping and records."
Why do you like working with Creatives?
1. The people – hands down the best most passionate people can be found in the creative sectors. If you like people and and excitement then it’s the place to be!
2. The environment – creativity is innovation, it means most of our clients are always working on something new, it keeps things interesting and keeps people and businesses developing continually. These sectors are always looking forward to what's next, what new tech is out there, how can it be used, how can they take the old and make it new. The energy, ideas and constant changing landscape is exciting.
Take events for example, look at how Covid will have changed the lay of the land for many events companies. Some will not make it but the majority will be looking to see the new angle, the new way they can deliver a great event in the new post pandemic world. It’s that picking up of a challenge, accepting the limitations and going for it anyway! Trying against all odds to put something great out there - that is the creative drive. A looming recession is scary but if you look back at history it's in times of struggle and recession that some of the best innovations takes place...and I believe a new wave of innovation will come out of the creatives sectors. Even if, say new tech comes out of manufacturing or electronic – the creatives sectors pick it up, simply because its new and then they find ways to use it. That is an environment I always want to be a part of. It's like working with a child at play – there is always wonder and dreams. Who doesn’t want to surround themselves with that?
3. The power to make a difference. I trained - like most chartered accountants - in audit. Working in large companies, putting in long hard hours to get the work completed and their accounts signed off. The companies are so big that it's hard to make a difference. At the end of the year a senior manager signs everything off and says thanks. You could have saved them thousands of pounds in tax, you could have help resolve some really tricky reporting or tax issues, but it’s not personal to anyone.
In the creatives sectors, from the one-man-band all the way up to medium size companies, there is usually a person or group of people and a passion that has created, driven and acted at the beating heart of the company. We can make a difference to them and their business.
Usually the most passionate creatives are not trained in business or finance so it's the part of their world they are most unsure of. We can really help them learn and build those business skills. When you make a positive difference in that situation you feel the love. The relationship becomes really strong and there's positive feedback on both sides. It’s very fulfilling and makes all the hard work totally worth it."
What would you say are the biggest risks in this industry (from an accounting pov)
"Time will tell but the most obvious issue for events specifically is the ability to survive. Many have seen their revenue drop off a cliff and depending on the type of event you work on, some may not get back to normal for some time. Keeping on top of cash flow and staying afloat is the biggest issue for most of these businesses.
The accountancy specific areas we see that cause issues are timing of jobs reported in the accounts. Jobs open over the year end need to be allocated to correct periods - it's an area lots of clients have issues with. Another one is IR35. Lots of events agencies staff up and down depending on what they are doing and will use freelancers across the year. However some of the people they use will be more regular and have more set and distinct roles, which do put them in a risky position for IR35."
What schemes, incentives or funding Are there for start-ups?
There are lots but most come with some sort of baggage. Start-Up loans are obviously loans, so the company starts life with a debt to pay. If you need the cash and have no other way to get it then it’s an option but it puts the pressure on from the start.
Most companies will try to raise money firstly from friends and family (this can lead to horrible relationship breakdowns if everyone is not 100% clear on their expectations and the risk involved at the start).
There is a lot on this list - so it’s about finding something that is relevant to your business.
In our experience the best ways are via the issue of shares to investors . There are schemes available to make a business more attractive to investors such as EIS or SEIS.
Or there are schemes that don’t require the company to give away anything, such as the creative industry tax credits and R&D claims, but not all businesses will qualify.
What accounting software would you recommend
Well I am a tad biased here as we are a Xero certified firm and we do all our bookkeeping in Xero - so that who I would recommend. There are lots of options out there we just found Xero was a great all rounder, can cover small and bigger business and its more intuitive to use.
There are lots out there, the most important factor is that the person who will be using it has to be able to get on with it. You could have the best system in the world but if the user can’t deal with it then it's pointless. I advise people to do a free trial, to have a look around and try and do some basic things like raise an invoice or reconcile some items in the bank to see how they get on.
You also need to check that it is approved for Making Tax Digital submissions to HMRC, as not all system are. Also, check that it does everything you need, for example the foreign exchange option is not available on some systems and if you have invoices or expense in foreign currency like euros or dollars you will need that function.
From your POV what are the secrets to success – What do the successful businesses do that the failing ones do not?
"Wow that’s a big question!
I think a lot of it is attitude. To be able to embrace the challenge that is business and be flexible and able to adapt when things change. The strongest teams we see are happy to make a change when they can see the current road is not taking them where they want to go.
Know your limitations – no one is good at everything. The businesses/people who can recognise where they are lacking and ask for help usually end up with a well rounded approach and strategy. We often get approached when this has not happened and the company is struggling. We usually find one or 2 people have tried to take charge of every aspect of the business, because of the resulting workload and no specialised knowledge they end up losing control or focus in some of those areas. Bring in experts to deal with the bits you don’t have the skill set for – it always pays off over time.
Determination has got to be there somewhere . I have seen people pull a business up to achieve amazing things when all signed were pointing to mediocre. Business is hard and it's never smooth for long. Working hard is not a secret to success but it definitely makes success more likely. All of the most successful businesses I know, be it due to income or creative output or just team culture and work life balance, they all have one thing in common. The person driving the bus worked their ass off!
Lastly and most annoyingly – LUCK. Most of the successes out there involve an aspect of luck; timing, being in the right place at the right time, meeting the perfect person - whatever. This bugs me as I'm a control freak and you just can't control this part. However, I do believe the idea that we make our own luck. If you work hard, go for it and put yourself out there, the chances of stumbling across that luck have got to improve."
What advice would you give a new Event Staffing Agency at this time?
"Events has been one of the worst hit by this pandemic so you need to know what you are entering into. There is no point doing what was always done and hoping it's going to work. I have heard people say, and read articles about, how the events industry is dead. Don’t believe it for a second. The world has changed, yes, but there will always be a place for events. People love to come together and to celebrate and to experience, and that will never change. It’s just how we do that which is changing. I would say a new event company needs to be watching what is happening and trying to work out where the road is leading, what events will look like in a year, or maybe 3 years time. Building a business for what is coming is going to be a safer bet than looking at what has gone before.
- Look at the market – look at how behaviour has changed
- Get your strategy nailed down
- Get your processes sorted
- Be ready to adapt – fast, be agile!
Any further advice you can add?
Many of our clients are in events and have had the worst year ever with many seeing 100% of the events cancelled. It's really tough, but whilst all the events are on hold and we are trapped in little bubble, it is the perfect time to imagine and see what else there could be.
Business owners always tell me (and I'm guilty of this myself) they have so much to do with the daily running of the business, that all the ideas they have and all the possible options or off-shoots or crazy campaigns just end up in a notepad somewhere gathering dust. Well, to all those people I say this is the time to go find that notebook and wipe off the cobwebs.
Open your mind and imagine, it could help you come up with a plan to get you on your feet, it could spark an idea that helps you move to a slightly different type of event or business model. One thing is certain – once the world opens back up and normal business ensues – you will not get time to look at these thoughts. Now is your time to get ready for the future. Take it as an opportunity, time to rethink and review… a time for a world of pure imagination (Gene Wilder is now singing in my head).