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SAAS (Software As A Service), solutions are so ingrained into our normal day that their existence and reach in our corporate and individual lives are often taken for granted. With the evolution of SAAS business models that permeate industries and workflows, it's good for us to understand more about the basics of setting up SAAS company finances. Most small companies, whether in SAAS or not are familiar with Xero and how they've become the go to software for small company finances. It's a great tool for book-keeping and a level of financial analysis. Here are 6 of our recommended tips when using Xero for your SAAS company finances. Tip 1 - Modify Chart of Accounts to reflect your revenue and overheads Xero has it's own in-built Chart of Accounts that you can use as a starting point. It has a great set of everyday account heads you'd generally need for any type of company. For most SAAS companies however small, would have some specific accounts that's unique to them. An easy example is "Cost of Sales"; while the general Chart of Accounts (COA for short); might refer to a cost of sales as a direct cost item, you can customise it to call is something more specific to your product such as Cost of subscriptions sold Similarly you can create line items in your COA for specific product sales. Such as Revenue - Product 1 / Revenue - Product 2. Doing this at the start can save you a lot of time as this flows onto layouts and reporting whether from Xero or from other apps you'd choose to connect to Xero. Tip 2 - Customise your Xero Dashboard Your Xero landing page is your Dashboard. You can customise it to show what you need to have your eyes on rather than crowd it with the things that are not really critical. We suggest having the bank accounts show there and using the account watchlist section to show balances on accounts you'd like to have an eye on. An example is to add the Directors Loan Or sales accounts to the Accounts watchlist for an easy view Tip 3 - Set up product inventory Even though inventory is associated with physical goods in the literal sense of the word, Xero's inventory feature is something we use a lot to make SAAS company invoicing faster. This allows for items of sales that are consistently invoices across clients to be codified for easy access. For e.g.. if you have license fees that goes month to month across clients, you can set up a product inventory with base cost showing as your lowest point of sale. If there is a tiered billing structure, you can add different inventory items to reflect these. For monthly invoicing, we've found this to be a game changer. There are other methods you can use for repeat invoicing processes that also allows for faster invoicing process. Tip 4 - Optimise tracking categories This is easily one of Xero's ace features which we've adapted and use across clients extensively. Xero allows for 2 broad tracking categories. While this is not often enough for clients, we combine that with some clever COA hacks (see tip 1) to deliver product wise insights for clients. The tracking categories are most useful for companies that need segment profit and loss accounts. You can track profitability across products based on how you demarcate them. SAAS companies use them ~ to demarcate geographical performance ~ differentiate recurring vs non-recurring revenue. This is a key consideration for SAAS and can make it easier to track MRR and ARR ~ Drill down by department if there are different segments within a company. One of our clients have assigned 4 pillars (4 product lines) and we track revenue and expenses across these pillars. Each pillar has a Head of Product who then analyses this for greater clarity on profitability You can also create segment wise budgets in Xero to create a truly comparable profit and loss; highly used in variance analyses. However, the one disadvantage here is that if you create pillar budgets on Xero, it doesn't automatically add up to a master budget. Tip 5 - Change layouts to suit management requirements Xero has in-built capabilities to customise financial reports and change the layouts to suit management requirements. It's common for our SAAS clients to want to see a cascading Profit and Loss as an example that shows each different revenue source against it's own costs of selling that product. This requires some work arounds too and takes time to bring it to a shape and form that's most useful for clients. However changing your reporting layouts and clubbing account heads together is a great starting point. Tip 6 - Configure payment gateways the right way Most SAAS companies have a few payment gateways integrated on their website. Stripe is one of the most commonly used gateways in the UK. The likes of Stripe and Paypal integrate to Xero but at Evalua8 we carefully ascertain whether a direct integration would be actually useful. The problem we've noticed is that gateways such as these connect directly to the client's bank account which is already set up on Xero. The transactions on Stripe for example are bulked up and payments sent to the bank account every 7 days (less Stripe fees). We've found the best way to do this is to create a single gross invoice for the month (or a less frequent period if that helps) and then reconcile each payment that hits the bank account against this invoice. It takes some planning to get this right. Are there more options I can use to elevate my SAAS business books? Well we set out to give you a few tips but there is no harm in sharing a few more that we feel are real game changers - like using the budget manager to create a basic budget for your business, income by contact reporting to drill down and see customer wise revenue generated, use of bank rules for quick reconciliations etc are some you can use. Can Evalua8 help with streamlining Xero for my SAAS business? If you don't have the time or appetite to build this internally, we are only a call away. Reach out to us for a no obligation chat today. Notes and references All pictures used are from pexels.com with much gratitude. They are allowed for commercial use under Creative Commons License

As the world of decentralized finance (DeFi) continues to evolve and expand, attracting investor interest has become crucial for DeFi startups looking to secure funding. One of the key elements that potential investors will scrutinize during your pitch is your financials; similar to companies in the traditional sector. Preparing your financials effectively maybe the key differentiator in convincing investors of your project's viability and potential for success. In this article, we will explore the steps you should take to ensure your financials are pitch-ready. Comprehensive Financial Projections Start by creating comprehensive financial projections that cover multiple scenarios. DeFi is a rapidly changing landscape, and investors need to know that you've considered various possibilities. Include income statements, balance sheets, and cash flow projections for the short, medium, and long term. Highlight key assumptions and variables that could impact your financial performance. As a thumb rule, customising financials for three scenarios is always a great option. One where all things go to plan, one "in the middle" scenario where you'd hit some milestones and miss some and the last being where you miss most milestones. It's important to understand what would happen under each of these. Highlight Revenue Streams Clearly define your revenue streams and outline how you plan to generate income. Whether it's through transaction fees, subscription fees or other mechanisms, investors want to understand where your revenue will come from. Be realistic in your revenue projections and provide a breakdown of income sources. It's also a good idea to have a general stream called "Other income" where any R&D tax breaks OR grant sources can be pooled. Always go conservative on this estimate as it depends on external factors working in your favour. E.g. If you expect 50k in grant income or R&D tax credit, project it as 30k in your financials which allows you the leeway in case rules or conditions change. Opex and costing Detail your cost structure, including operational, marketing, development, and any other expenses. Investors will want to see that you've thought through your spending and have a plan for managing costs as your project scales. Highlight cost-saving strategies and efficiency improvements if you've a clear view on this. One of the things we've observed is investors wanting a clearly laid our HR or hiring plan. With people costs being one of highest company expenses, it's imperative that you drill down to the extent possible on what type of hire are needed and when. Whether you expect them to be full time or contract basis. We usually use formulas to create cost lines for Employers NIC and Pensions (calculated roughly at 13% of gross salary and 5% of gross salaries respectively). This is not the exact calculation of course but provides a good estimation for employer costs which are additional to salaries. In the same vein, when considering contractor expenses, we would include a 10% handling fee, under the assumption that foreign payroll providers or HR agents will be engaged to manage employee compliance in the country where they work. Risk Assessment Acknowledge the risks inherent in the DeFi space and how you plan to mitigate them. Investors are well aware of the volatility and security challenges associated with DeFi, so demonstrating a clear understanding of these risks and your strategies for addressing them will build confidence. Here we'd always encourage clients to lay out a well planned treasury management strategy to balance your exposure between digital and fiat asset types. Financial Metrics Include key financial metrics that investors commonly look for, such as return on investment (ROI), customer acquisition cost (CAC), customer lifetime value (CLV), churn and growth rate. These metrics provide insight into the estimated health and performance of your DeFi project. You may need to delve into competitor financials to get a realistic understanding of how these are performing within a specific industry sub-type. Such as DeFi SAAS companies. It's imperative to know whether pure DeFi metrics such as market capitalisation, transaction volumes and Total Value Locked (TVL) would be relevant for your product type. You may need a blend of metrics across both to convey an effective picture. Scalability and Growth Strategy Demonstrate how your DeFi project plans to scale and capture a larger market share. Investors want to see a solid growth strategy that includes user acquisition, partnerships, and expansion into new markets or products. Highlight your unique value proposition and competitive advantage. This is not strictly financial, but needs to be considered when you create your forecasts and cash flow analysis for the future. Preparing your DeFi company financials for an investor pitch is a critical step in attracting funding and building investor trust. By working on an adequate set of financials, you can increase your chances of securing investment. Remember that transparency, realism, and a clear growth strategy are key to convincing investors of your DeFi project's potential for success in this exciting and rapidly evolving industry. At the same time, it's important to acknowledge that financials are only a part of your whole pitch, so keep it simple and easy to understand for a reader. We can help you in your journey to prepare your financials for investor pitches. We understand the stress and concern it can cause founders in a challenging market such as we have currently. We offer starter prices for a early stage companies so it's always worth a check to see what we can do for you specifically. Reach out to us via our Contact page to speak more. Notes and references All images used are from pexels.com allowed for commercial use under creative commons license. With much gratitude!

Setting up the finance function for any company needs careful thought and preparation. This is critical for companies in the DeFi space due to the ever evolving nature of the industry. Fundamental to any set up is to ensure its scalable, compliant and can be relied upon to produce information when required. There is no secret formula here for a one size fits all. From SAAS to ICOs, companies in the space can be dealing with many different types of products at the same time. We've listed the 5 common mistakes we've found when starting to work with clients, 1. Ignoring tax regulations: The cryptocurrency space operates largely without strict regulations, but it's important to acknowledge that activities within this realm can carry significant regulatory consequences. For instance, mining, while not considered an economic activity by HMRC, many other pursuits undertaken by DeFi companies do fall within the purview of VAT and corporate tax regulations, and navigating these waters can be tricky. Another example, is when accounting for revenue from certain activities , the tax rules for them (Vatable, non vatable, zero-rated) should be checked to ensure tax compliance. Crypto transactions may have tax implications that can be complex and vary by jurisdiction. Failing to report income, capital gains, or losses accurately can result in non compliance and therefor penalties and interest charged for non payment. 2. Ignoring internal controls Internal controls serve a dual purpose: enhancing operational efficiency and mitigating risks. With the advent of DeFi and the expanding array of crypto and fiat assets, errors can occur more easily. The potential for fraud is notably higher compared to traditional setups. We all know that once funds leave a wallet, there is no getting it back if sent to the wrong address or person. To address these challenges, internal controls should prioritize certain key elements - double-factor authentication, diversification of functions, and the application of common-sense controls above everything else. Such measures can significantly contribute to the establishment and maintenance of a well-balanced financial function in DeFi. 3. Lack of transparency for transactions Let's face it! Transactions involving crypto currencies are hard to capture in real time at the right value. We've worked across clientele to establish good practices that capture them and make them visible and unde rstandable for an investor or stake holder at a point in time. You should look to establish the right combination of people + processes to be able to record them in order to provide a "true and fair view" regarding the value and the company's exposure. 4. Not having the right software It's essential for companies in the space to implement software and solutions that align with the DLT-centric approach. We typically start with creating an eco-system that embeds software that's able to effectively capture, - Accounting transactions (Xero, Quickbooks, Zoho) - Planning and analysis (can range from google sheets to FathomHQ for forecasting and reporting) - Tax reporting and valuation (Koinly, CoinTracker) - Audit trails (blockchain backups) - Payment processors (Direct via exchanges or he likes of Coinbase commerce, BitPay etc) Crafting a finance function that harnesses DLT's capabilities is a multifaceted endeavor, and selecting the right tools for each function is crucial to create a finance function that'll sustain over the long term. We're working on a stand alone article to cover this aspect as it's such a vast topic, so stay tuned. 5. An ineffective treasury strategy This is a hard one - but so important that our article will not be complete without mentioning this. f you keep a mix of crypto and fiat assets, you must have a robust treasury function embedded in your finance function. Without this, it's difficult to action transactions fast. With the volatility in this market, not having a short term (1-3 months) and long-term (6 months to an year OR and overarching 3-4 year strategy) can be debilitating. Simple example would be to have a strategy where you would convert 10% of all BTC assets every time it goes up in value by 10% or more. The mathematics behind it can be simple but if you have an idea that you will consistently liquidate your holdings that's a great cue for the finance team to alert management on variations. We've just identified here the most common crypto company mistakess while setting up a finance function. While neglecting regulatory compliance, overlooking robust accounting practices, underestimating security protocols, inadequate risk management, and failing to maintain transparency—are pitfalls that can be easily avoided., it's not to say there aren't other things to consider too. Fundamental to all of these is to have a clear vision for what your financial function should deliver. If you'd like to create a roadmap for your finance function, please feel free to reach out to us for a 30-minute obligation free chat. We create process maps clearly identifying existing processes as well as gaps in them. Companies can then consider best practices to plug them for the long term. Notes and references HMRC's Crypto assets manual - VAT treatment All the pictures used in the article are creative commons licensed and are allowed for commercial use

Tokenization isn't a novel technology; but it certainly has newfound appreciation in recent times. Similar to how early enthusiasts experimented with NFTs tokenization has been part of the landscape for sometime now. But with evolving tech within this space, institutions are increasingly showing interest in tokens, and unexpected economic dynamics have encouraged their adoption. This resurgence does, however, present some challenging questions, particularly regarding how companies should account for tokenized assets in their financial statements. Since the adaptability of this concept is still in its early stages, there is a limited amount of available information and established practices in this regard. Before we share some thoughts on this, let's understand what does tokenization mean. Tokenization of digital assets refers to the process of converting physical or intangible assets into digital tokens on a blockchain or DLT. These tokens represent ownership, rights, or a stakes in the underlying asset. Almost any type of asset can be tokenized, including real estate, stocks, bonds, art, commodities, and more. Tokenization allows these assets to be divided into smaller, more easily tradable units. This makes accounting for them a complex process. The specific accounting treatment can vary depending on factors such as the nature of the asset, the accounting standards applicable in the operational jurisdiction and whether the tokens represent ownership, utility, or some other rights. We've drawn from studies including the OECD's 2020 paper "The Tokenisation of Assets and Potential Implications for Financial Markets" to get guidelines on how they can be represented in financial statements. 1. Are they financial assets? If the tokenized asset represents ownership in an a pre-existing real asset (e.g., stocks, bonds) or carries contractual cash flows (e.g., interest payments), it may be classified as a financial asset. In the same vein, if they represent owning a real assets that is not financial in nature (real estate, art work), they may be considered as non-financial assets. 2. UK FRS - Financial Instruments In the UK, FRS 102 requires comprehensive disclosures related to financial assets, including information about their nature, risks, and fair value. Accounting standards do evolve overtime with the complexity of products in the market so a close read of it is required before deciding accounting treatment for the asset. For companies that are multi-jurisdictional, its important to check requirements under host standards and tax rules. 3. Are tokenized assets derivatives? They are not. While tokenised assets have a like to like value for an underlying asset with the ownership of the asset vesting with the token asset holder. Derivatives "derive" their value from an underlying with no ownership rights to the original asset itself. For eg, a tokenised version of gold will have the same value to the unit of gold it represents, whereas a derivative instrument based on the value or price of gold doesn't have the value of the asset (i.e. gold). Derivatives are used quite commonly as speculative instruments used for hedging purposes. The accounting for these greatly differ too. 4. HMRC Viewpoint As of now, HMRC has not provided specific guidance pertaining to NFTs or tokenized assets in a general context. They do, however, offer guidelines related to cryptocurrencies. In the event that NFTs are acquired and subsequently sold, with a demonstrable change in value from acquisition to sale, it's reasonable to assume that tax implications may arise. The specific tax treatment will depend on how these assets are classified in financial accounts. Potential taxation scenarios may include tax on profits (corporation tax) or capital gains tax In summary, this field is relatively new, and the accounting treatment varies depending on factors like the asset's purpose and the nature of the underlying core asset. There isn't a universal solution that applies to all situations. If you'd like to brainstorm the handling of tokenized assets like NFTs, please don't hesitate to contact us through our dedicated contact page. We're here to assist you. Notes https://www.coindesk.com/consensus-magazine/2023/07/18/tokenize-everything-institutions-bet-that-cryptos-future-lies-in-the-real-world/ https://www.oecd.org/finance/The-Tokenisation-of-Assets-and-Potential-Implications-for-Financial-Markets.pdf All pictures used in the article are from pexels.com and allowed for commercial use under a creative common license The article is only for information purposes. Please do your own research or reach out to professionals for further guidance

Since we initially published this article in 2021, numerous changes have occurred within the DeFi space, as well as in the realm of traditional banking. Some of the banks we previously identified as crypto-friendly in 2021 no longer exist. Therefore, we present here an updated list of the best banks for crypto companies that we have researched based on our internal experience. It's important to note that regulations and banking relationships within the cryptocurrency industry are continually evolving, with many banks increasing their KYC (Know Your Customer) and onboarding requirements for companies operating in this space. Before proceeding, it's essential to recognize that many of the institutions listed here are not full-fledged traditional banks. They may not offer services such as credit, loans, and other traditional offerings commonly associated with high-street banks. Consider this updated list as a checklist rather than an exhaustive list of possibilities to investigate what best aligns with your specific needs and requirements. 1. REVOLUT Having worked with Revolut, a UK-based Financial Technology (FinTech) company it's worth a mention. Opening the account takes time to complete KYC, but once done, it offers a range of financial services through its user-friendly mobile app and website. While not a traditional bank, Revolut provides features akin to conventional banking institutions. These services include multi-currency accounts, competitive currency exchange rates, debit cards for everyday spending, and a mobile app that enables users to manage their finances efficiently. Revolut works with major exchanges such as Coinbase and have really good customer support teams for corporate bank accounts. They resolve queries fast and genuinely make an effort to solve issues. 2. XACE Xace was identified a crypto-friendly institution in our 2021 edition and we've kept them on this list as there are a fair few websites that refer to the fact that they are open to reviewing companies that operate in the sector for corporate accounts. Note that Xace is a Small Payment Institution (and EMD Agent of Modulr FS Ltd) and not a traditional bank, however they offer corporate accounts with virtual IBANS. For ease, you require an IBAN to accept money into the account or to send payments. 3. CASHAA Cashaa is not a traditional bank; it is a financial technology (FinTech) company that offers banking and cryptocurrency-related services. Their website identifies as crypto friendly bank account for your business, so there you have it! With Cashaa you can set up multi currency wallets with 3rd party payments. Cashaa offers an online platform for onboarding, however we've only completed the first level of client support for Cashaa's KYC process. The part completed was straight forward. 4. BCB Group BCB Group stands as a prominent global provider of business accounts and trading solutions tailored for the digital asset sector. They operate under regulatory oversight in both the UK and Switzerland. With the collapse of other larger instituions serving this sector, we understand that BCB has had unprecendented demand for their services. BCB's support team were helpful and answered all essential queries during onboarding.We've supported clients with onboarding to BCB and can advise on essential preparation if required for companies looking to use their services. 5. SEBA Bank Another one to consider is Swiss based SEBA Bank that offers services between digital and traditional assets. Through its services, customers can effortlessly safeguard, trade, and oversee a wide spectrum of assets, encompassing cryptocurrencies, digital assets, and traditional securities, all within a unified platform. We have no direct onboarding experience with SEBA. Updates for other banks mentioned in our 2021 article FIDOR BANK Update: Fidor bank's webiste mentions that they will discontinue its banking business this year. They exited the UK market in 2021. SIGNATURE BANK Widely regarded as one of the staunchest supporters of the industry, Signature collapsed in 2022. SILVERGATE Silvergate Bank has played a pivotal role as one of the primary banking institutions for cryptocurrency companies, alongside Signature Bank based in New York. They liquidated in Q1 of 2023. How does Evalua8 assist clients in the process of opening corporate accounts? Evalua8 operates independently, with no affiliations to specific banks or payment institutions. Our role is to aid clients in preparing all the required information and documentation necessary for the onboarding process. Over the past three years, we have successfully supported clients with close to 20 exchange onboardings and KYC procedures. This hands-on experience has allowed us to gain insights into the most efficient and expedited methods for completing these processes. For further information, please don't hesitate to reach out to us via our contact page. Source and notes Collapses of Silvergate and Signature banks Silvergate shuts down All pictures used in the article are from pexels.com and allowed for commercial use under a creative common license The article is only for information purposes. Please do your own research or reach out to professionals for further guidance

Safety, both for individuals and assets, holds paramount importance within companies. With a growing number of businesses expanding their portfolios to encompass intangibles like cryptocurrencies, it becomes imperative to devise comprehensive strategies for their protection. The intrinsic digital and intangible attributes of cryptocurrencies render them susceptible to fraud and theft. Moreover, the absence of a track-and-trace mechanism in case of loss amplifies the challenges associated with their safeguarding. In such instances, the sole recourse for asset recovery rests upon the goodwill of the recipient. But we must acknowledge that fraudsters, devoid of such principles, are unlikely to extend such courtesy. From our observations, these five strategies are helpful to safeguard your assets to a degree, 1. Cold Storage Wallets: Using cold storage wallets, which are not connected to the internet, to store the majority of your crypto holdings is essential. Hardware wallets are preferred by most. Cold storage provides an extra layer of security because it's less vulnerable to online threats like hacking and phishing. Some examples are Ledgers and Trezor devices. These devices password protect your assets and you can only move assets in and out with a designated device. 2. Multi-auth Wallets: Introducing multi-authentication or multi-party wallets into your company's crypto asset management strategy is a highly effective means of bolstering asset security. This approach necessitates the involvement of multiple private keys to validate transactions. By establishing a protocol where a minimum of two or more individuals within your organization must provide their approval for transactions, the risk of unauthorized access is significantly reduced. Should this approach appear impractical for your organization's needs, an alternative option is to define transaction tiers that require additional user endorsements before they are digitally authorized. Notable examples of multi-signatory wallets include Gnosis and Copper. Copper employs a walled-garden functionality that mandates additional security checks prior to designating a new wallet ID as secure for withdrawals. This process includes obtaining approvals from parties other than the initiator of the request, adding an extra layer of scrutiny to any withdrawal address addition requests. 3. Secure Access Controls: It's self-evident, much like the need to secure your bank accounts and other assets, that minimizing access should be a priority. Enforce stringent access controls and restrict the number of employees with permissions to crypto assets. Given that information can be readily obtained from the public blockchain, implementing these access controls can be accomplished with relative ease Use strong, unique passwords for wallets and exchanges, and consider using password managers such as Lastpass or 1password. Enable two-factor authentication (2FA) wherever possible to add an extra layer of security to accounts. 4. Regular Security Audits: Apart from the above, conducting regular security audits of your crypto storage systems and protocols can help identify vulnerabilities and weaknesses that need addressing. Stay updated with security best practices and follow the latest security recommendations from wallet and exchange providers. Update wallet software such as used in Ledgers with the latest versions. 5. Employee Training and Awareness: Educate your employees on the potential risks linked to cryptocurrencies and emphasize the significance of security. Establish an internal policy that delineates procedures for handling crypto assets, including guidelines for reporting suspicious activities and adhering to security protocols. Recent events serve as a stark reminder; for instance, when we received an email claiming to be from Metamask requesting a wallet update, a quick Google search immediately exposed it as a fraudulent attempt Additionally, consider the following best practices: Diversification: Avoid placing all your crypto assets in one wallet or exchange. Spread your holdings across multiple wallets and platforms to minimize the impact of a potential breach. Regular Backups: Ensure that you have secure backups of wallet keys and recovery phrases in multiple locations, preferably in separate physical and digital formats. Incident Response Plan: Develop a clear incident response plan that outlines steps to take in case of a security breach. This plan should include notifying relevant authorities, partners, and customers, if necessary. Insurance: Investigate the availability of crypto insurance to protect against theft or loss of assets. Though this was largely unavailable a few years Stay Informed: Stay updated on the latest security threats and trends in the cryptocurrency space. Join industry forums and networks to learn from others' experiences. It's disheartening to witness the proliferation of scams within the crypto space, which has adversely impacted numerous individuals and businesses. These losses are not only financially burdensome but also inflict psychological stress on the victims. By adopting these strategies and adopting a vigilant stance towards security, your company can mitigate the risks associated with the custody and management of crypto assets. Contact us, your Crypto accountant, for a discreet consultation on streamlining your crypto treasury operations or establishing an efficient outsourced finance solution. Let's supercharge your financial success together! Notes and references 1. Metamask policies and FAQs - https://support.metamask.io/hc/en-us/articles/12683145255835-I-received-an-email-claiming-to-be-from-MetaMask-Is-it-legit- 2. All pictures used in our blog are from pexels.com are are licensed under Creative commons for commercial use

In the realm of financial management, our approach has always been centered around constructing a robust finance function, as opposed to merely offering bookkeeping services. While managing day-to-day transactions is an integral aspect of establishing a solid finance function, it encapsulates a broader range of intricacies. At its core, every business function revolves around its end-users, or in our case, our clients. Each company we collaborate with exhibits distinct levels of engagement from senior personnel (such as the CEO, COO, and occasionally a CFO), diverse budget structures, and, naturally, specific core requisites to create and maintain an outsourced finance function. The Key Distinction In the process of building a function, our initial focus entails assessing the current state of affairs. How extensive is the organization's workforce? Is there an existing finance department that we are aiding in expanding, or is engaging our services the primary step in that direction? What degree of involvement do other staff members have in the finance function? Once we've addressed these fundamental queries, we chart out processes to establish a streamlined workflow. This might encompass: Implementation of shared document repositories (such as Dropbox or Sharefile) to facilitate document sharing. Creation of a unified email address for all external suppliers (e.g., finance@domain name, accounts@domain name). Integration of these systems into our internal ecosystem. Defining project timelines and deliverables for daily, weekly, and monthly tasks, and more. Navigating the Workflow It's crucial to determine the extent of involvement required from a firm like ours. For assignments necessitating a high degree of involvement, we are available on a daily basis. We actively participate in meetings, engage in banking and treasury operations, and collaborate with other departments to optimize processes. A typical day in such scenarios entails activities like daily stand-up calls, regular dashboard assessments of critical KPIs, swift exchange of crypto to fiat currencies in response to variations or perceived risks, and participation in budget or stakeholder meetings. In instances where the involvement is more bi-weekly or monthly, we remain in the background for regular check-ins and discussions on financial matters. While we gather once a month to deliberate on the finances of the preceding month, we remain on call for ad-hoc consultations when pressing financial issues arise. For instance, when a company is poised to make a specific hire, they may face a narrow window for extending an offer. If they require a rapid evaluation of budgetary changes for such scenarios, we're readily available to provide insights. While tools like Fathom can pre-emptively cater to such scenarios, it's often beneficial to have a conversation with experts who can seamlessly integrate these tools into your budgetary frameworks with precision. The Collaborative Ecosystem Most companies operate within their distinct internal ecosystems, leveraging a multitude of tools—Slack, Google Sheets, password management tools, Asana, JIRA, to name a few. Our approach isn't to replace these tools but rather to seamlessly embed our functions within the existing solutions. If a client utilizes a project management system like Asana, we tailor our functions to complement that system instead of introducing a new tool from our own repertoire. By adopting these holistic practices, we strive to cultivate a comprehensive finance function that goes beyond traditional bookkeeping, aligning seamlessly with the dynamic needs and structures of modern businesses. Tag notes The pictures we use are Creative Commons Licensed and are from pexels.com. The difference picture Courtesy - Photo by Markus Spiske: https://www.pexels.com/photo/one-black-chess-piece-separated-from-red-pawn-chess-pieces-1679618/ Photo by energepic.com: https://www.pexels.com/photo/person-pointing-on-the-screen-of-a-laptop-313691/

At the outset. we’d like to clarify that this article is about Fathomhq, the reporting software and not Fathom.fi (XDC). Fathomq is a financial reporting and analysis tool that can be valuable for crypto companies looking to streamline their monthly reporting processes and gain deeper insights into their financial performance. How Fathomhq helps our clients draw value from interactional management accounting? As we have progressed as a business, we realized our clients needed more than what their cloud software could provide. For providing strategic advice to business owners, we needed an appropriate tool that would paint the picture without overwhelming the reader. Our clients come from a wide range of backgrounds, some have deep financial knowledge whereas others prefer a more macro approach. Commonly though, they don't have the time to read through complex management reports, compare them to prior period results and draw conclusions for business decisions. ​This is where we’ve leveraged the power of Fathomhq for month-end reporting. ​An integrated eco-system Fathomhq connects to our clients' Xero entity and pulls reports with a level of built-in financial narrative. We customise this further by adding business specific KPIs, notes and explanations which drives results based decision making. It allows our clients to access the reports anytime they need and add questions/comments via their custom login, thereby allowing meaningful conversations to happen around their financial strategy – at their own pace and time. Internally it enables collaboration among team members, making it easier for finance teams and the Management to work together on analysing financial data and making informed decisions. Consolidated reporting Fathomhq facilities group level reporting if all of your entities are on the same accounting package such as on Xero. Our clients benefit from this as they get to see group-level financial data in a clear and engaging manner. Reports can also be sent to external investors if you choose to do so. It’s also possible to create automated reports from Fathomhq direct to your inbox on a consistent basis, such as weekly or at the end of the month. Reports that are critical are often summarised and emailed across based on client requirements for quick access. Custom Metrics Apart from the financial metrics that are in-built on the platform, we can add custom metrics that help clients with their decision making. For example, if you'd like to see the split between FIAT and crypto on a monthly basis for treasury management purposes, that can be customised as a report on Fathom. We further demarcated this as crypto and stable for a detailed view. With time, these metrics do tend to change to reflect changing business needs. Forecasting and scenario planning Fathomhq's forecasting features helps to plan cash flows effectively. This is especially important in the volatile crypto market, where accurate cash flow projections can help you make informed financial decisions faster. It also allows to model different scenarios for your crypto business. This could involve testing the impact of different market conditions, regulatory changes, or investment strategies and how numbers would look under each different scenario. A case for reporting consistency Incorporating BI tools into your crypto company's reporting process can enhance your ability to monitor performance, analyse trends, and make informed financial decisions. However, it's important to ensure that your crypto accounting practices are accurate and up-to-date, as the accuracy of Fathomhq's insights depends on the quality of the data you input. Our team can be reached via our Contact Page if you need help establishing FathomHq for your company. Notes and references All pictures used in the article are custom generated or are from pexels. The pictures used from Pexels are creative commons licensed and allowed for commercial use Fathomhq details can be found at this link

Cryptocurrency has become a significant part of the financial landscape, attracting both individuals and businesses in the UK. However, navigating the complex world of crypto taxation can be challenging. In this article, we will delve deeper into the tax implications of cryptocurrency transactions for corporates in UK, providing additional details to help ensure compliance with HMRC regulations. Cryptocurrency Taxes for Businesses: For businesses and companies engaged in cryptocurrency activities, various taxes may apply, depending on the nature of their operations. These taxes include: Capital Gains Tax (CGT): When businesses sell tokens, they are subject to Capital Gains Tax on any gains made. CGT is calculated based on the difference between the selling price and the acquisition cost of the tokens Corporation Tax: If a business generates profits from its cryptocurrency activities, these profits are subject to Corporation Tax. It is important to note that any expenses incurred in the process of generating these profits can be deducted before calculating the taxable amount. Income Tax: Businesses that earn income directly from cryptocurrency-related activities, such as providing crypto-related services, are liable for Income Tax on the earnings. National Insurance: If businesses employ individuals who receive part of their income in cryptocurrency, both the employees and the company may be subject to National Insurance contributions. VAT: Businesses accepting cryptocurrencies as payment for goods or services may need to account for Value Added Tax (VAT) on the value of the goods or services provided. Compliance with GAAP Guidelines: When calculating trading profits for Income Tax or Corporation Tax, businesses must follow Generally Accepted Accounting Principles (GAAP) guidelines. This allows for necessary legal adjustments and ensures accurate reporting of financial activities. Understanding Allowable Costs: The UK's Taxation of Chargeable Gains Act (TCGA) 1992 provides guidelines on the types of costs that businesses can deduct as allowable expenses when calculating taxable gains or losses on cryptocurrency transactions. These allowable costs include: Consideration: The original amount paid for acquiring the tokens, denominated in pound sterling. Transaction Fees: Any fees incurred for processing cryptocurrency transactions on the distributed ledger Advertising Costs: Expenses related to advertising for either the sale or purchase of tokens. Professional Costs: Costs associated with hiring professionals to draw up contracts for acquiring or disposing of the tokens Tax-Free Cryptocurrencies: Certain crypto transactions are tax-free in the UK. These include: Buying Crypto with Fiat Currency: Purchasing cryptocurrencies using fiat currency (e.g., GBP) does not trigger any tax liability. Holding Crypto: Simply holding cryptocurrencies in wallets without engaging in any transactions is not subject to tax. Transferring Crypto Between Own Wallets: Moving same cryptocurrencies between wallets owned by the same individual or entity is tax-free. Once crypto changes form for example from ETH to USDT it may trigger a taxable event Gifting Crypto to a Spouse or Civil Partner: Gifting cryptocurrencies to a spouse or civil partner is also exempt from tax. Strategies for Reducing Crypto Taxes: To reduce crypto taxes, businesses can employ various strategies, including: Utilizing Tax-Free Thresholds: Take advantage of tax-free transactions to minimize taxable events. Trading Tax Breaks: Be mindful of the tax implications of trading, and explore opportunities to optimize tax efficiency. Investing Crypto in a Pension: Some pension schemes allow investments in cryptocurrencies, which can provide tax advantages. Donating Crypto to Charity: Donating cryptocurrencies to registered charities may offer tax relief benefits. Offsetting Crypto losses with gains in UK In UK, crypto losses can be offset against gains to reduce the overall tax liability. When calculating the tax on cryptocurrency gains, any losses incurred from other cryptocurrency transactions can be deducted, resulting in a net gain or loss position for tax purposes. It's important to note that losses can only be offset against gains in the same tax year. If losses exceed gains in a tax year, the remaining losses can be carried forward to offset against future gains in subsequent tax years. This can be beneficial for individuals or businesses with fluctuating crypto investments, as they can use losses from one year to reduce tax liabilities in future years when they have gains. However, it's crucial to maintain accurate records of all cryptocurrency transactions and losses to substantiate any claims for offsetting losses against gains. Proper accounting and record-keeping are essential to comply with tax regulations and ensure accurate reporting to HMRC. As always, individuals and businesses should seek professional advice from tax experts or accountants to understand and navigate the complexities of cryptocurrency taxation effectively. Conclusion: Cryptocurrency taxation in the UK can be complex, and businesses must stay informed about the latest HMRC guidelines and comply with tax regulations. By understanding applicable taxes, allowable deductions, and tax-free transactions, stakeholders can effectively manage their cryptocurrency activities while ensuring compliance with tax laws. Professional advice and accounting expertise may be necessary to navigate this evolving landscape successfully. At Evalua8 we help our clients effectively navigate the crypto taxation maze as part of the Crypto Treasury Management services. Please reach out to us at https://www.evalua8.com/contact-us

At the outset, there are several reasons why UK companies may consider setting up their headquarters or regional offices in Singapore. Singapore is known for its business-friendly environment and often highly ranked in the Ease of Doing Business index. What is the process of a company set up and why does the costs of company set up vary so much in Singapore? Setting up a business is fast and easily done via a Corporate Secretarial firm based in the country. They follow a standard process; however, the costs for setting up a business in Singapore varies highly. The costs paid to Corporate authorities (ACRA is the equivalent of Companies House in Singapore and IRAS is the equivalent of HMRC here), are standard. But “setting up” or the “incorporation process” is not the most challenging part. There has to be a firm understanding of a few things before you actually incorporate the company. Some things we talk through with clients before they think of hopping to the island are, Are there very specific advantages of having the company in Singapore? For e.g specialist skills at reasonable prices that are crucial to your industry. How do you structure your company? Do you expect to work yourself as a founder or main tech driver out of Singapore? What facilities do you need for your Singapore company? At the minimum you’ll need a bank account. Is your company structure and the activity you need to pursue optimised for a smooth opening process? It’s imperative that you discuss these matters with a well rounded corporate provider before you actually take the plunge. It’s easier to make these decisions ahead of you incorporating. We agree that some changes are inevitable but we can mitigate the avoidable ones with a little bit of early prep work. What does the corporate regulatory framework of Singapore look like and how does it differ from the UK? The ACRA (Accounting an Corporate Regulatory Authority) of Singapore is the regulatory body for private companies like the Companies House in the UK. Things are accessible online but you need a Company Secretary based in Singapore for ease of working through this. The IRAS (Inland Revenue Authority of Singapore) is the tax authority, like our HMRC here. Again, information and services are available online. Corporation taxes work similar to the UK system in as much as you have income and deductible expenses and taxes are due on profits you make. There are myriad levels of deductions and concessions available for new formed companies which you can take advantage of. The DTAA between Singapore and UK We think it’s prudent to touch upon the subject, we aren’t providing a detailed analysis here. Broadly the Double Taxation Avoidance Agreement (DTAA) between Singapore and the United Kingdom (UK) aims to prevent individuals and companies from being taxed twice on the same income in both countries. The DTAA covers taxes on business profits, taxation of dividends, taxes on interest and royalties and capital gains taxation apart from more administrative areas such as mutual sharing of agreements etc. Immigration in Singapore The immigration scenario in Singapore is complex and subject to approvals from the Ministry of Manpower (MOM). As with any other nation, Singapore's focus is on citizens and residents when it comes to creating and maintaining jobs. Foreign employees have two main routes to Singapore's work system. One is the Entre Pass and other the Employment Pass. Entre Pass According to the Ministry's website, this is meant to be used for entrepreneurs who are keen to operate a business in Singapore that is venture-backed or possesses innovative technologies. Directly borrowing the eligibility criteria as explained by MOM, Which companies are considered venture-backed or own innovative technologies? A company is considered venture-backed or owns innovative technologies if it has: Raised funding from capital providers including government investment vehicles, venture capitalists, corporates, family offices, and business angels. Developed, produced or commercialised tech products, services or platforms. Registered patents with an approved national IP institution. Ongoing research collaboration with a research institution. Employment Pass The employment pass criteria in Singapore is highly stringent. It's not to say people don't land up with these, but it requires careful consideration. Professionals need to earn at least SG $5,000, circa £3k a month. This range increases progressively with age, up to $10,500 (approx £6.2 k) for those in the mid-40s. While this may reasonable for UK companies, there are many other factors that determine whether you'd end up getting an Employment Pass (called EP for short) in Singapore. If you think you're eligible for either of these, please reach out to us and we can help gauge the likelihood of you being able to get this in place with a first try. Notes, Comments, Disclaimers All pictures used are from pexels.com are are licensed for commercial use The blog is only intended for informational purposes and is not meant as individual / corporate advice. To the extent possible, we've remained true to the intend of Singapore's compliance and immigration authorities in relaying information related to specific subjects. We are not affiliated to the government and our article is based on our own working experience.

While it's viewed as cumbersome and time-consuming, Know Your Customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing. KYC involves several steps to: establish customer identity; understand the nature of customers' activities and qualify that the source of funds is legitimate. In this same vein, just like you'd go through KYC while applying for a bank account, Crypto exchanges require Know Your Customer (KYC) procedures to comply with laws and regulations designed to prevent money laundering and the financing of terrorism. These laws often require financial institutions, including crypto exchanges, to verify the identity of their customers and monitor their transactions for suspicious activity. By requiring KYC, crypto exchanges can demonstrate that they are taking steps to comply with these laws and regulations and reduce the risk of being used for illegal activities. Why do exchanges need KYC for corporate accounts? Corporations may also be required to provide Know Your Customer (KYC) information to crypto exchanges for the same reasons as individuals. This is because corporations, like individuals, can potentially be used to launder money. KYC processes ensure that corporates furnish details of themselves to exchanges that allow them to check for potential fraudulent and suspicious transactions. What documents / info should a corporate prepare before venturing to open an account with a crypto exchange? The specific documents required for Know Your Customer (KYC) can vary depending on the country, the crypto exchange, and the type of account being opened. The following are requested commonly, 1. ID documents for Founders and Directors: A passport, national ID card, or driver's license, etc for all founders or majority shareholders. The definition of majority shareholding varies between exchanges. We've had experience with companies that are holding-company structures and exchanges have asked to see shareholding structure showing who are majority shareholders ( an individual, corporate or family that holds 20% or more shares individually OR combined). Some exchanges insist on verified documents that need to be done via an Accountant/lawyer. 2. Proof of Address: A utility bill, bank statement, or other official document that shows your name and address. 3. Incorporation documents: Documents such a copy of the certificate of incorporation, memorandum and articles of association and proof of registered address. 4. Selfie verification: Most exchanges we've supported our clients with have asked for a selfie of the Director / majority shareholder to be uploaded. Sometimes the exchange have a selfie verification portal and it captures your image and time when you access a link send out to your phone number or email. 5. Estimates of incoming and outgoing funds and volumes 6. The type of crypto currencies you'd like to have access to over an above the bigger cryptocurrencies Note: This is not an exhaustive list, the details required by exchanges vary depending on the size and nature of the applying organisation. What happens when you don't have one or more of these documents to hand? If you do not have the required documents for Know Your Customer (KYC) on hand, it may be difficult to open an account with a crypto exchange. Think what'd happen in the case of a bank, you will try to find a different bank or see if some of the documents / details you have are acceptable as an alternate. As an example, we've been asked a few times to upload a recent Certificate of Good Standing issued by the Companies House (UK) or a recent Bizfile (from ACRA, Singapore). While it was defined as the document should be dated within an year, we've used documents that were just shy of 18 months old with the express detail that there have been no further changes. We've also explained on a few occasions that getting a new certificate will cause money and delays which has resolved this matter amicably. NOTES and References https://cointelegraph.com/trading-for-beginners/what-is-kyc-and-why-do-crypto-exchanges-require-it All photographs used in the article are used from prexels.com with thanks are are Creative Commons licensed.

The term “holding company structures” is easily understood in South-East Asia as an efficient way to manage group companies. Often it creates visions of complex top-down pyramids formed for tax avoidance. While there maybe groups that are formed for this very purpose, my experience has been quite different. In our experience, holding company structures cater to groups that need presence in more than one geographical area: each with its own multifaceted compliance and tax requirements. In this sense, it helps for one centralised company to “hold” subsidiaries under its umbrella. In the mid to late 2000’s the Cayman and BVI were popular destinations, due to low compliance requirements and easy annual maintenance. They also have low or no taxes. As we moved towards 2010’s; the popularity of these destinations dwindled. Currently there are many destinations where the tax and corporate compliance are straight-forward and friendly to companies. A head-line tax between 15-20% and the presence of R&D friendly tax policies have greatly helped many South-East Asia countries top the ease of doing business index year after year. While structuring companies is a complex process that requires careful thought and deliberation, here are some things to consider. 1. Is a holding company structure right for you? The simple answer is - it is not the right choice for many groups. We’ve seen many a times people advised incorrectly regarding setting up companies in certain jurisdictions. It’s not a one size fits all – there was indeed a time where this was considered even fashionable. Holding companies are generally “private companies” and just like how private companies work in the UK, they have requirements such as a local director, a registered office and often a Company Secretary in most jurisdictions around the world. When you don’t “employ” someone locally, that means you must add in nominee services such as a nominee director to comply with local laws. Due to the innate risk of the job, service providers charge high fees for these services and it’s a repeated requirement year after year. More than the costs involved, you should be very aware of what ongoing maintenance requirements you have? Is it worth opening a company in a jurisdiction where you don’t have an established market and never expect to employ people? 2. It might just be right for digital nomads The pandemic has normalised “mobile entrepreneurs” or “digital nomads” and the lifestyle that comes with it. They consider a holding company a good idea as they don’t need to worry about where they’d be based individually as they run the business from a laptop. It can work well in such cases; we’ve seen this through quite successfully in recent years. Most of them don’t worry overly about taxes and compliance when they work out where to base themselves. The factors are more personal and cultural – where do you eventually see yourself settling down? Where are most of my employees or contractors going to be based? Where are sales tax laws simple to follow when they have a product out in the market? UK is fairly popular in that regard – even with a headline tax of 19% currently (And soon increasing to 25%) due to its proximity to Europe, culture and lifestyle as well as the freedom and general safety it affords residents. 3. Group relationships Another factor that affects how effective your structure would work is how many group companies you decide on and what would be the flow of transactions between these companies. Typically, a parent would have several fully-owned (100% shareholding) or majority owned (51% and above) subsidiaries. The subsidiaries are also private limited companies and in some cases branch companies. Subsidiaries operate on their own and will have local employees and offices. They’d help with establishing and maintaining local clientele and sales support. They’d have jurisdictional tax and corporate laws to comply with. Generally, this is where we (Evalua8) step in. We maintain a centrally running finance and operational function. We say operational function as we usually work directly with Group COOs and CEOs maintaining a fully functioning finance department as well as are involved in cross-functional project management. Any service provider you choose must understand what each of the group companies do, what product or service is provided by each of the companies as well as how money move between companies. That’s simplifying it but you get an idea. The biggest problems our clients have faced before finding us is, - A local provider who doesn’t understand the complexities of cross-border transactions - A service provider who does understand it but are very expensive - A service provider that doesn’t have industry level knowledge. This is one of the reasons why we work almost exclusively with SAAS and currently crypto SAAS companies. 4. Transfer pricing Transfer pricing sounds very complex and it can be in a lot of scenarios. Fundamentally transfer pricing establishes fairness in pricing when group companies deal with each other. Tax rules established rules around transfer pricing to ensure you have priced goods and services that you deliver between group companies “fairly”. I’ll add the definition from Investopedia here for greater clarity - Transfer pricing is an accounting and taxation practice that allows for pricing transactions internally within businesses and between subsidiaries that operate under common control or ownership. The transfer pricing practice extends to cross-border transactions as well as domestic ones. One common mis-conception we’ve found with companies is that they misunderstand this to be applicable when two or more jurisdictions are involved. This is incorrect. As the definition rightly points out above, it’s applicable even when the companies in question are all based in one country. Need more info? While this is only scratching the surface of corporate structuring and holding company structures, we hope to bring you some case studies on how we’ve worked with our clients in delivering value across their group. This is queued up for the near future, so stay tuned. Meanwhile, feel free to email me on neethustephen@evalua8.com for comments or queries. You have the vision, we deliver the structure. References and notes The pictures used in this have been self prepared using the wonderful Canva or sourced from pexels.com Image 2 of the UK - image courtesy with much thanks - https://www.pexels.com/photo/architecture-booth-buildings-bus-374815/