THE STRUCTURE IS ONLY THE STARTING POINT: JUST BECAUSE YOU CAN DO IT ALL, SHOULD YOU?

Greater Manchester continues to demonstrate considerable ambition as a place to establish, grow and invest in business. Almost eight in ten businesses surveyed in pro-manchester’s Regional Growth and Resilience Report said they were confident about their prospects over the next 12 months. However, rising costs, changing customer demands and wage pressures continue to place strain on organisations across the region.

As businesses, investment managers and entrepreneurs pursue their growth ambitions and put capital to work, it is important that they consider not only how an investment or business should be structured, but also how it will be managed effectively over the longer term.

A great deal of time and expertise can go into establishing the right structure for an investment or business. Lawyers document it, tax advisers consider the implications, companies and SPVs are incorporated, bank accounts are opened and the transaction eventually completes.

Then comes the less exciting question, but arguably one of the most important: who is actually going to run it?

Increasingly, we see clients trying to do much of this themselves. They are managing cash, approving invoices, keeping track of payments, dealing with accountants, organising board approvals, monitoring Companies House filings, maintaining records and coordinating lawyers, banks and other advisers.

None of these tasks sounds particularly complicated in isolation, but the problem is that somebody has to remember all of them. Quite often, that person is also supposed to be finding the next investment, running the underlying business or managing relationships with investors.

And in a world where investment structuring is increasingly sophisticated, regulatory obligations are increasingly complex, reporting is increasingly comprehensive, and governance is increasingly challenging, achieving all this can pose major questions.

Control

Being in control does not necessarily mean doing everything yourself.

There can be a reluctance to hand over the administration surrounding an investment because it feels like giving up control. In reality, there is a significant difference between retaining control and personally administering everything.

For some businesses, managing this work internally may initially appear to be the most cost-effective or straightforward option. Others may not realise how much specialist resource will be required once a structure is operational or may not have ready access to the necessary governance and administration expertise.

At the same time, regulatory requirements, reporting obligations and the number of stakeholders involved in many structures have increased their complexity. What may begin as a manageable collection of responsibilities can quickly become a considerable operational burden, particularly as a business or investment portfolio grows.

The client should still know what is happening, have visibility and make the decisions that properly belong to them. What they should not necessarily have to do is chase an invoice, remember when a filing is due, organise the board paperwork or act as the go-between for the accountant, lawyer and bank.

The hidden workload

Everyone focuses on the transaction. Far less attention is given to the hundreds of smaller things that happen afterwards.

A bank queries a payment, an invoice needs approval, a director needs supporting information before signing, the accountant asks for records, a Companies House deadline is approaching, a new investment needs its own SPV, or a lender requires information.

Individually, these are manageable. Collectively, they become a job.

As a portfolio grows, one company becomes three, three become ten, and different investments can have different banks, advisers, reporting requirements and stakeholders.

Someone needs to join the dots

Most clients already have specialist advisers. The lawyer is not there to manage the bank account, the accountant is not running the board, the investment manager is not maintaining the statutory records and the bank is not coordinating everyone else.

A good corporate services relationship fills that gap. It means the client does not have to act as the central switchboard between every professional involved in the structure. There is a team that understands how the structure works, what needs to happen next and when something needs to be escalated.

We have seen this approach provide valuable support to UK businesses and investment structures experiencing growth and increasing operational complexity. For example, Suntera has supported a North West-based business who came to us with a growing administrative burden, including 50+ payments a month, 12 board meetings a year, statutory filings, governance and cash management. By managing that infrastructure, we allow its team to retain oversight while focusing its time on the day job.

This also allowed its internal team to retain oversight and decision-making responsibility while spending less time coordinating the structure’s day-to-day requirements.

Giving clients their time back

At Suntera, it’s about helping to establish the structure, providing governance and directors where appropriate, maintaining corporate records and statutory requirements, supporting cash management and payment processes, coordinating board activity and working alongside the client’s existing advisers.

The real benefit is more straightforward: the client does not have to juggle everything themselves. The relationship should feel less like outsourcing to a service provider and more like adding an experienced team to the client’s own.

Outsourcing is not about giving up control. It is about having the right infrastructure around you so you can spend your time on the things that actually require you.

Getting the structure right matters, but it is only the starting point.

If your business or investment structure is becoming increasingly complex, an early conversation about its ongoing governance and administration can help identify where additional support could give your team back valuable time. To discuss how Suntera could support your organisation, please contact Jade Fellowes, Client Services Director at Suntera ([email protected]).