A technology business on a growth arc requires specialized advice at each stop on the journey upward. Product development, fund raising, promotion, securities compliance and fund allocation all require different accounting recommendations.
A common challenge with new start-ups in the technology field is that their financial reporting is not sophisticated enough to meet the concerns of all stakeholders. Many successful entrepreneurs are simply unaware of what is important in financial reporting to investors, and what can be said briefly. A simple profit and loss statement does not cover the bases for professional and institutional funders. You need an accounting firm that knows how to present projected budgets and costs.
Technology businesses occasionally require large cash injections. Long term budget forecasts rarely work this challenge into the picture. Short budget requirements that are reviewed on a regular basis are much more likely to give a better insight into the actual health of the business.
Emerging technology companies also invest considerable monies in their brand development and brand awareness. While these brand building investments can add incredible value to a technology business’ market value, they can’t be amortized on the balance sheet as an asset.
But R&D investments can be treated differently. While costs cannot be recovered in the research stage, the situation changes once a product reaches development. Costs could now possibly be a part of the balance sheet, and therefore open to amortization. Our specialists can analyze your technology business plan and make recommendations on a path that will take advantage of all government assistance and allowances for Canadian grown technology.