"Cutting corners on your professional advisors is a false economy": Why accountants matter more than ever to the biz

As recently revealed, next year's Music Week Awards will mark the arrival of one brand new category for the ceremony: the addition, by popular demand, of the Accountancy Firm Of The Year award.

The increasing centrality of accountancy to the biz is a topic explored recently in a very special report in the new issue of Music Week, in which we catch up with the sector's key players to look at how specialist music accountants do much more than comb through invoices and file tax returns.

Thomas St. John (TSJ) business manager Sarah Anderson [pictured] was quick to stress the risks associated with artists swerving accounting services.

“For seriously ambitious artists, I would advise them that cutting corners on your professional advisors is a false economy,” she told Music Week. “If you seek out the right support early on and put in place the best structure, you’ll be in a better place in the long term. The clients we see succeed, whether artists, executives or music companies, are those who focus on what they’re passionate about and go all out to achieve their vision.”

Ed Niman, director of NWN Blue Squared – and recent Music Week guest columnist - says that the “undervaluing of advice and experience” of accountants is one of the greatest challenges the sector is currently facing.

“Technology makes accounts production quicker and easier, two issues arise,” he told Music Week. “The compliance element, on which accountants have largely relied to pay their fees, has now become commoditised, making the search for an accountant price-focused and the market far more price sensitive.

“The knock-on effect is the devaluation of the business-critical, non-compliance elements [such as] business strategy, growth, funding and wider business development advice. To some degree, accountants are not always acknowledged by small music-based businesses as an important resource for this type of expertise.”

 

Historically, accountants were a cash drain and reported information months after the event. I very much see modern music accounting to be far more operational. Quick information can make a huge difference to any business 

Ray Bush, The Music Royalty Co.

 

Ray Bush, managing director of The Music Royalty Co. (MRC), also revealed how the role of the modern music accountant has evolved greatly in recent years.

“Historically, accountants were a cash drain and reported information months after the event,” suggests Bush.“I very much see modern music accounting to be far more operational. Quick information can make a huge difference to any business. MRC allows creative people to be more creative and focus less time on pesky financial matters. Accountants can be too focused on paper transactions, i.e. not real money and transaction manipulations. This is great for year-end [compliance], but does not replace hands-on monthly reporting as a real trading position.”

Elsewhere in the sector, Simon Winters, a partner in Prager Metis audit and accounting, tax services and advisory services departments noted that having to adapt to on-going changes in the music business is not only proving tough for artists, but also on their financial advisors.

“With the advent of artificial intelligence and blockchain technology, these changes are going to keep on coming for both the better and worse,” he said. “Also, the uncertainty of the impact of Brexit on international trade such as touring is causing a great deal of uncertainty, which makes planning for future tours a challenge.”

Charlotte Harris, a partner at Harris & Trotter, added that the biggest challenges accountants have to deal with are making sure that artists are being paid correctly and that they are doing their best to monitor that.

“There are many more streams of revenue and we need to make sure artists are getting everything they’re entitled to,” she said. “This includes reviewing statements, splitting performance contracts where possible and reviewing settlements.”

The Accountancy Firm Of The Year award is open to any firm with clients in the B2B music industry, so now is the time to make sure the money men and women in your lives get their dues.

Nominations must be made via the Music Week Awards website, musicweekawards.com, and the deadline closes at midnight on Friday, January 12, so please don’t delay in getting your applications together.

Bookings are also now open for the event, which takes place on April 26 at the Grosvenor House Hotel in London. As always, the awards are peer-voted and judged by panels of specialist judges, with the presentations to be made at the ceremony in front of more than 1,000 of the industry’s leading figures.

Full details, including category criteria and an entry guide, are available at musicweekawards.com. For sponsorship enquiries, please contact Ryan O’Donnell on rodonnell@nbmedia.com

 

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