While many of the accounting and tax issues faced by software companies are common in other industries as well, there are certain areas in which software companies must be well-versed in order to establish and maintain credibility with investors and lenders and minimize exposure to taxes. These areas (arranged roughly chronologically over the life cycle of the typical software company) include:

Choice of entity type – Software companies often start out as a flow-through entity (S-corp or LLC) in order to enjoy the flow-through of tax losses and credits, avoid the potential for double taxation, and provide maximum flexibility in an exit transaction, but later find it more advantageous to convert to C-corp status (perhaps to accommodate a significant venture capital or foreign investor).  Other times, software companies find it advantageous to move in the opposite direction (from C-corp status to flow-through status). Great care must be taken in the initial choice of entity type, as well as any subsequent change (since significant adverse tax consequences can result).

Debt and equity transactions – Rapidly growing software companies often have various types of owners, including founders, key employees, angel investors, and institutional venture capital funds, and multiple types of debt and equity, including senior debt, convertible debt, common stock, and potentially multiple series of preferred stock with differing rights and preferences.  In general, amounts associated with debt (other than principal repayment) will result in a tax deduction, while any amounts associated with equity (including costs incurred to raise the equity) do not result in a tax deduction.

Stock-based compensation – Software companies often use restricted stock, stock options and other forms of equity-based compensation to attract and retain key talent.  It is important to understand the financial accounting and tax ramifications of such, both from the perspective of the company and the employee.  The company will generally want to try to minimize any charge to financial statement earnings, while enjoying an income tax deduction for any amount included in income by the employee.  From the employee’s perspective, it is important to avoid having a W-2 income inclusion at a time when there may be no cash involved with which to pay the resulting tax, and to try to structure for long-term capital gains treatment (rather than having ordinary income).

PBMS Manufacturing Solutions focuses on finding solutions for our manufacturing clients. Our diverse team includes specialists in a variety of accounting, finance, and management areas as well as professionals with experience leading manufacturing companies.

We understand that a manufacturer faces constant industry change. PBMS Manufacturing Solutions team is devoted to helping you navigate that change. Our team works hard to understand your business and your industry, and we work together to develop the solutions that fit your unique business. We strive to help our manufacturing clients improve profitability, discover new opportunities, and ultimately, reach their goals.

Comprehensive Services for the Manufacturing Industry

PRO Business MS offers the following services to our manufacturing clients. For more information or to discuss your business, contact us.

• Strategic and Business Planning
• Forecasting and Budgeting
• ERP Selection and Implementation
• Product and Service Costing
• Product Line Margin Evaluation
• Inventory Analysis and Planning
• Overhead Absorption Studies
• Financial Statement Analysis
• Manufacturing Reporting
• Variance Analysis
• Industry Benchmarking
• Tax Planning, Preparation, and Filing
• Assurance, including Audits & Reviews
• Support in Business Changes such as Refinancing and Restructuring
• Business Valuation
• Risk Advisory Services
• Coaching and Training
• Special Projects or General Consultation

Industry Expertise

In our history, PBMS has supported manufacturers in a variety of industries, including:

• Machinery and Equipment Manufacturers
• Plastic Processors
• Food and Beverage Manufacturers
• Iron and Steel Mills
• Glass Product Manufacturers
• Industrial Products Manufacturing
• Sawmills, Millwork, and Woodworking
• Steel, Aluminum, and Other Metal Fabricators and Processors
• Machine Shops
• Commercial Printing
• Truck Trailer Manufacturing
• Ceramic and Alumina Product Manufacturing
• Pipe and Tube Manufacturers
• Consumer Products Manufacturing
• Wire Product Manufacturing
• Chemical Product and Preparation Manufacturing
• Additive Manufacturing

The energy and natural resources sector continue to experience fundamental shifts in the global energy system. Global conditions have continued to challenge the sector with geopolitical changes and worldwide economic slowdown causing deferrals in investment and instability.

There is also considerable disruption in the market with the falling cost of clean energy technologies, the shift towards electrification and smart technology plus unconventional hydrocarbons. Businesses in this sector need insightful and timely advice from advisors they can trust, to guide them through the evolving energy landscape.

Wherever you are on your business journey, our UK team and global network of specialists have deep industry experience with energy and natural resources businesses across every aspect of its lifecycle, from exploration and evaluation through to closure.

Mining & Metals – consulting and accounting advice

We provide advice and support on a range of core services, including audit and assurance, governance and controls, capital expenditure, and funding. We also work closely with clients to ensure their long-term viability and resilience by maximising profits, advising on health and safety, maximising efficiency and the movement to environmental consciousness, compliance and sustainability reporting.

Renewable & Sustainable Energy

With the right tax and accounting advice, our team of sustainability experts can support and guide your business interests to maximise return and attract investment in this rapidly changing market. Whether you are building a renewable energy plant, looking to invest, or looking for investment our team can advise you with the latest thinking.

Services and expertise include:

• Corporate Tax structure advisory for financial and regulatory efficiency
• Financial reporting and advice on financial controls for remote operations
• Corporate governance
• Advice and due diligence on capital markets transactions 
• Audit and financial modeling
• UK and global employment practices and regulation
• IFRS 9, IFRS 15 and IFRS 16 and US GAAP governance and reporting

Construction is one of the UK’s largest sectors, but it is also one of the most complicated. Our detailed knowledge of this evolving sector combined with our specialist skills make us the ideal partner to help you navigate its complexities.

Understanding the complexities

At MHA MacIntyre Hudson, our work with a wide range of clients across this fundamental sector has helped us to build a deep understanding of the maze of regulations and the myriad of uncertainties and risks faced by construction businesses every day.

Our specialist team of accountants for the construction industry work with a plethora of commercial and residential developers, contractors and sub-contractors, civil engineers, surveyors and professional services firms. The breadth of our work has meant our knowledge and understanding of this sector is firmly cemented and we can offer our clients advice for their business whatever the requirements and circumstances not just for today but for the future.

With construction accounting and financial management at our core, we guide businesses from start-up all the way through to exit planning, as well as advising on growth strategies and on how to survive a changing economy and an uncertain future.

Accounting for construction companies

As construction accountants, we know businesses in the sector face an ever-increasing threat of investigation by HM Revenue & Customs. It is common for the public body to impose financial settlements dating back several years to collect tax, national insurance, interest and penalties on any errors that are discovered.

We understand that can be a daunting prospect for any company, but our team of specialists can work with your business to ensure it is compliant with its tax obligations, as well as offering advice on areas such as capital gains tax and VAT consultancy, including negotiations with HMRC.

Alongside these core audit and accountancy services, our highly experienced construction accounting team can also offer advice on:

• R&D tax credits on innovative construction methods
• Fundraising for developers
• Reporting on individual construction projects – from start to finish
• Land remediation tax reliefs
• Corporate tax structure to optimise reliefs and risk management
• VAT consultancy, including negotiations with HMRC
• Construction Industry Scheme compliance reviews and advice
• IR35 – engagement of workers and employment tax issues
• PAYE compliance with health checks on benefits and expenses
• Profit extraction
• Corporate finance advice, including for mergers, acquisitions and disposals
• Strategic planning to help you get your business to where you want it to be
• Expert witness for construction litigation