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Tilney targets Smith & Williamson for merger

The board of Tilney has confirmed that it is in exclusive discussions with Smith & Williamson about a potential combination of the two businesses.

In a statement Tilney said: ‘A merger of Tilney and Smith & Williamson would create a market-leading, integrated UK wealth management and professional services group with over £45bn of assets under management.

‘These discussions are ongoing and there can be no certainty that a transaction will proceed. A further announcement will be made as and when appropriate.’

Smith & Williamson confirmed that talks are underway and that the accounting arm of the firm is part of the ongoing talks.

In a statement, Smith & Williamson said: ‘Further to the announcement by AGF Management Ltd to the Toronto Stock Exchange yesterday (18 August) regarding its shareholding in Smith & Williamson, the board of Smith & Williamson confirms that it has received an approach and is in exclusive discussions about a combination of its business with Tilney Group.

‘The respective boards believe that a merger of Smith & Williamson and Tilney has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm. Discussions remain ongoing and at this stage there is no certainty that a transaction will proceed. A further announcement will be made in due course.’

Smith & Williamson, founded in Glasgow in 1881, is ranked at number eight in the Accountancy Daily Top 75 Firms annual survey. The firm’s business model is based on a mix of financial and professional services, with a significant managed funds business. Its financial results, released in July, showed operating income increased 4.3% year-on-year to £278.1m while adjusted operating profit increased by 4.8% to £48.4m.

Professional services income, including revenue from tax and business services was up 6.5% to £104.7m, although the firm changed its reporting lines this year.

The funds under management and advice service line increased by 6.5% year-on-year to £21.4bn.

Tilney, which was bought by private equity firm Permira in 2014 from Deutsche Bank, manages some £24bn of client assets. It acquired competitor Towry in 2016 and also runs the online service Bestinvest.

The bid from Tilney, reported in the Sunday Times, comes two years after listed wealth manager Rathbones tried to buy Smith & Williamson. In August 2017 Rathbones, which manages over £32bn of client funds through Rathbone Investment Management proposed a merger, but talks were called off the following month.

At the time, Smith & Williamson said it intend to pursue a public listing and confirmed this view on publication of its latest results.

Andrew Sykes, non-executive chairman of Smith & Williamson, said in the firm’s annual report: ‘We continue to plan for a listing to take place at some juncture in 2020, subject to market conditions.’

If the deal goes ahead, the combined business would have about 250 financial planners, 240 investment managers and more than 100 partners in professional services.

There has been a flurry of mergers and acquisitions among wealth management firms in recent years, driven partly by increased regulatory supervision and the need for economies of scale.

Intellitek Systems announces launch of accounting solution

To help accounting firms tackle digital transformation for both themselves and their clients, while also enhancing the profitability of their practices, Intellitek Systems today announced the launch of its Accounting Partner Center of Excellence. Accounting firms, payroll providers, and other business advisory professionals who join the Intellitek Systems Accounting Partner Center of Excellence are eligible to re-sell Intellitek’s ERP, CRM, payroll, and accounting software whitelabelled and customised to match the partner’s brand. In addition to revenue generated from offering the software solutions, partners will receive referrals from Intellitek Systems and have opportunities to further increase revenue opportunities by optionally offering software implementation services and receiving referrals from Intellitek Systems and fellow partners for their standard accounting, payroll, or advisory services.

“By expanding our accounting partner program into a full-fledged Center of Excellence, Intellitek’s network of accounting, tax, and business advisory professionals will have access to Intellitek Systems’ more than a decade-long experience of delivering leading ERP, CRM, accounting, and payroll technologies. Likewise, Intellitek will benefit from having a network of trusted advisors that we can be confident will service our clients with the same level of excellence and integrity that we ourselves provide,” commented Matthew May, Founder and Chief Project Engineer at Intellitek Systems. Mark Merkle, Intellitek’s Chief Marketing Officer, added: “Joint clients from our accounting partner program can expect to turn to the combined expertise of Intellitek Systems and our accounting partners for a ‘one-stop-shop’ experience for technology as well as the strategic advice that can help them standardise their IT infrastructure while creating an organisational framework that enables them to do their best work without worrying about technology, financial analytics, tax issues, or payroll. It truly is a win-win for everyone.”

Contact: Mark Merkle, Chief Marketing Officer, [email protected]

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Battle of accountants versus machines

It is hard to go a day without seeing an article or a viewpoint in the media declaring Artificial Intelligence (AI) will make certain jobs redundant – but will it be the same for those roles carried out in the finance industry?

Technological advancements are at a faster pace than ever, with computers becoming more reactive and human-like in their responses and decision-making.

In January, a round on the American television quiz show Jeopardy was won by a computer named Watson, beating previous quiz show champions.

The rapid pace of technology advancement will no doubt see computers performing some accounting and finance functions, and this is already happening.

Recent innovations like mobile phone apps that can identify expenses from photos of source documents, and automatically allocate them to the accounting records, are already widely used across a range of industries.

In fact, last year HMRC confirmed it will begin rolling out AI to review tax returns and issue tax penalties.

Deciding to implement such technology in business must be well planned and researched. It is important that management make the decision in the context of their particular business.

For example, do they have the resources to employ this technology – certain pieces of software can be expensive and involve significant upfront costs before yielding any benefits.

Do staff have an appetite to adopt this technology? To maximise effectiveness, it is important that staff are trained and competent in using the technology on a regular basis.

How secure is the software and the devices used?

This is particularly important in the current world of big data, with the real risk of data breaches in large and small businesses across the globe, not to mention compliance with data protection legislation.

Whilst it appears inevitable that technology is developing to take over the more repetitive or basic accounting and finance functions, there are some positive aspects for use of this technology by accountants and businesses.

Not only will technology bring about new types of jobs that will be less repetitive and more interpretive (increasing employee job satisfaction), it will also free up management’s time to focus on value-adding activities.

Activities that can add to revenue (such as focusing on new markets, products and clients) or reduce costs within a business.

If firms are looking to the future but aren’t open to change, they will lose competitive advantage.

As Northern Ireland businesses increasingly compete on a global scale, the adoption of robotics and technologies is essential.

Rather than seeing technology as a threat, accountants and businesses should see it as a growing opportunity.

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How to choose the right accounting software for Making Tax Digital

Many businesses faced with complying with Making Tax Digital (MTD) need to take some time to assess their current business needs, how these might change in the near to medium-term future, and figure out what technology they’ll need to comply.

The key driver behind MTD is to move businesses, no matter their size, to some form of digital accounting. MTD is seen as not only a major efficiency win for the enterprises concerned, but it also enables the government to streamline the tax systems that are in place today. In an ideal world, this would mean an online tax account for every business and self-employed person, for fast and efficient tax filing.

However, how businesses use IT can vary significantly, particularly as access to certain technologies is not always possible. Adopting MTD may be a significant challenge for some enterprises, while for others it will require little more than a few tweaks to their existing systems. The vast majority of companies will, however, fall between these two extremes.

It because of this that calls have been issued to delay the rollout of MTD, currently expected to arrive in April, something that the UK government has seemingly rejected.

Tax shouldn’t be taxing

How your business’ digital accounting systems will evolve will, of course, depend on many factors. Your company may already use some form of digital accounting software, so the question may be, does this application need to be upgraded to be compatible with MTD?

With research from Spiceworks revealing 52% of businesses are still using Windows XP, this doesn’t bode well for small enterprises keeping their accounting applications up-to-date.

There is also the matter of training and competence with the applications, especially if these are new to your company. It won’t be possible to instantly use any of the cloud-based applications without a period of training. Factoring this into your transition period is vital.

Small business owners are also concerned that their level of technical knowledge won’t be good enough to avoid what could be costly mistakes when choosing new digital accounting systems.

Peter Ford, public sector industry principal at Pegasystems, says that his company is working with HMRC to develop their front facing services.

“Digital solutions used by SMEs and their agents should offer the customer experience that allows them to complete online filing without any technical knowledge, and only the level of business engagement that one would expect any other major mandatory function within their organisation. Systems that HMRC provide, including APIs, interfaces and online services should be equally easy to use that will allow an SME to complete digital filing as they would any other regular business function, such as paying staff.”

Your business’s current level of technical knowledge will determine how complex supporting MTD will be for your company. Small businesses, in particular, will have to potentially make the most radical changes, as until now they may have simply completed their own self-assessment tax form. In the world of MTD, moving to a hosted accounting service will be unavoidable.

Understanding your objectives

Mark Taylor, a technical manager in the Technical Innovation wing of the Institute of Chartered Accountants (ICAEW), explains to IT Pro that businesses need to assess their requirements before choosing an MTD software provider.

“Choosing an MTD application should be approached in the same manner as selecting business software,” explains Taylor. “An organisation should start with understanding its business objectives, what problem are you attempting to address? In this case MTD.

“Next, technology requirements need to be considered. Should the application be cloud-based? Do you need to support mobile devices or need to integrate with an existing application? Once these requirements have been established, a business can start to research possible solutions.

He explains that some businesses have found success with a scorecard approach, in which each application is marked against a company’s existing systems and requirements, with the totalled scores revealing the best overall package. How a business implements this system isn’t important – what matters is that it helps to “formalise the selection process and provide more assurance that the right application is being selected.”

As with all software moves, pitfalls are almost certainly going to be encountered, yet, given the fierce market competition that is developing ahead of the April deadline, vendors will be trying to make the onboarding process as simple as possible.

“Software vendors often provide trial versions of their applications for free,” explains Taylor. “The key to making successful use of these trials is to use them with realistic data and in a representative manner. Casually playing with an application will not provide sufficient insight as to how well it will integrate into your business.”

Approaching the transition to digital accounting and tax filing needs all the due diligence you would use when choosing any new services for your business. Today, the cloud-based accounting market has continued to expand and evolve. Stalwarts of business accounting such as Sage have been joined by newer services such as FreeAgent and Crunch. What they all attempt to do is simplify the accounting and tax filing processes all business must comply with.

As each application or service is different, one size doesn’t fit all. Take your time to talk to other businesses in your sector. Case studies and information from your business’s trade associations can often shed light on the shortcomings of some applications or services you may not be aware of. Use this knowledge to make sure you purchase the right digital services to comply with MTD.

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Clive Owen LLP named top financial advisor in North East

Clive Owen LLP, which has an office in York, is celebrating after being named the top financial adviser in the North East.

The team at Clive Owen Corporate Finance has topped the financial volume table following the publication of Experian’s annual UK and Republic of Ireland mergers and acquisitions (M&A) report.

Based on its business research, Experian’s league table shows Clive Owen LLP ranking at number one in the region having advised on 19 M&A transactions in 2018.

In addition to the regional M&A transactions included in the report, Clive Owen Corporate Finance also completed a further five transactions nationally, including some high-profile deals involving private equity firms and multi-national PLCs. The report states that the North East has had one of the best years on record for M&A activity, with “292 announced deals worth over £3.2bn, representing a 27 per cent and 51 per cent increase in volume and value respectively when compared to 2017.”

Clive Owen LLP specialises in corporate and commercial clients and has offices in Darlington and Durham as well as York.

Angus Allan, Corporate Finance Partner at Clive Owen LLP, said: “We are delighted to see Clive Owen LLP named top financial adviser in the North East, thanks to the hard work and success of our teams in Darlington, Durham and York.”

Meanwhile, a financial expert from Clive Owen LLP has been appointed as board director for the York Professionals.

Jonathan Doyle, a senior manager at the firm’s York office, brings a wealth of experience to the board.

After joining the firm in 2010, Jonathan now advises a broad spectrum of clients and owner managed businesses on year end accounts preparation, management accounts, tax planning and audit services. York Professionals represents the city’s professional services economy in the business support, creative and digital, finance, legal, marketing, people and property sectors.

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Accountancy firm celebrates 12 deals of Christmas

The East Midlands office of accountancy firm Mazars says it has advised on 12 deals in the run up to Christmas.

The team says it is seeing resilience across the board at entrepreneurial business, acquisitive corporates, banks and private equity investors, despite economic uncertainty.

Mazars Deal Advisory has hired Tom Boss and Jacob Staten in a move which it says reflects the “sustained demand for high quality business advice” in both M&A and due diligence.

The sale of £20m turnover Premier Workplace Services to Hong Kong-based Crown Worldwide took Mazars’ deal completion tally over the last three months to twelve.

Paul Pownall – M&A senior manager – said “Whilst it’s impossible to avoid the ‘B-word’ in the press, the sentiment towards doing deals remains positive, as businesses seek to capitalise on the economic environment.”

Mazars Deal Advisory partner Julian Clough, said “Activity levels are strong; acquisitive corporates have been particularly busy as opportunities emerge to consolidate in fast moving markets. We see this as a continuing trend and feel well positioned to advise clients – new and old – moving into 2019.”