Speaking with Breaking The Mould Accounting at Cannes Yachting Festival 2021

Originated in 1977, Cannes Yachting Festival is Europe's leading in-water boat show, which saw a welcome return to Cannes after the 2020 edition was cancelled due to the pandemic. From 7-12 September, Vieux Port and Port Pierre Canto were the maritime hubs for around 560 exhibiting boats, with 150 new yachts making their debut at the show. 

Visitors at the show could view participating yachts including the Silent 60 from Silent Yachts, the 38 metre Emocean by Rosetti Superyachts,  the 28 metre explorer Venera from Van Der Valk Shipyard, the new Trideck flagship of Azimut Yachts and the Otam 70HT featuring design by Giuseppe Bagnardi BG Design Firm and bespoke engineering and hull lines by Umberto Tagliavini Marine Design. 

Sailing vessels were located at Port Pierre Canto, where show attendees could also discover the latest innovations at the Toys exhibition zone and visit the second-hand brokerage yachts.  YY Yachts had three models on display including the Tripp 90 with interiors by Winch Design in world premiere, and the 56 metre Oceanco yacht The Wellesley was beautifully showcased opposite the Toys zone. 

Q&A with Alasdair Milroy of Breaking the Mould Accounting

Over the week, OnboardOnline interviewed a number of professionals across the industry, including Alasdair Milroy from Breaking The Mould Accounting.  Alasdair trained as a Chartered Accountant in Sydney before travelling extensively and working abroad for 16 years, focusing on the yachting sector for the past eight years. He launched Breaking the Mould Accounting having identified that accounting in yachting is often fragmented between different corporate service providers, yacht managers and captains who are left to do it themselves. 

Taking time out from his busy show schedule, Alasdair spoke to us about the importance of keeping abreast of industry news and being on the ground at yacht shows to meet clients. 

What is a key point that your business aims to communicate to yacht owners or managers?  

The fiscal landscape continues to increase in complexity. Without real time data potential risks are difficult to manage. This results in additional costs for owners, duplicating data in multiple systems and a reduction in the quality of financial information.  We offer advisory services, a virtual CFO to maritime businesses and that is an area we are keen to develop by leveraging technology to a high quality service and real time financial data to our clients. 

You were part of the Yachting Ventures program.  Can you explain how this has affected your business strategy since the program? 

It was invaluable both in terms of broadening the relationship in the industry and understanding different perspectives. It helped me reposition my communication of our offering.

What are some of the issues you encounter with accounting from a yacht owners perspective?   

Has the owner articulated what their vision for the yacht is? This needs to be understood to structure the crew and the operations to deliver that personal experience. Sometimes owners aren’t aware of the risks - they don’t know what is really being spent or what expenses are coming up.  They are worried about whether they are compliant on the accounting/financial side, or don’t have the financial data to inform on big projects (connecting the operations and finances). 

Tell us more about BTM Yachting in Malta and the services offered (finance administration and accounting, crew employment and payroll, yacht registration, ISM and Mini ISM.)  

I established BTM Yachting in Malta to service the EU ownership market and Malta flagged yachts. Malta has a good pool of well trained accountants who also understand VAT in the EU.  We have a partnership with Total Superyacht who offer the most comprehensive compliance and vessel management software specifically for the operation of yachts. It builds the operational picture around which the financials sit. 

How do you balance technology and the tools you use with industry trends? 

The technology needs to work with the people; there is technology in the wider accounting profession that could bring a lot of advantages to yachting. The cloud applications are ideally suited to yachting where the stakeholders are separated and the yacht is moving.  It has made much better financial data affordable. 

Can you explain your business model for yacht managers, such as tiered packages for budgeting and forecasts, and what services are additional, such as bookkeeping and payroll for crew.

This is an interesting discussion point because pricing was an area I wanted to change. Yachting remains very traditional; few yachting firms are transparent with pricing, I can't think of a manager who publishes fees on their website. BTM offers a fixed fee service to clients payable monthly in advance. Some of the benefits are: 

• If we charge time, all the risk is the clients – if the work takes us a long time, they pick up the tab. We should have the experience to price the work correctly.

• It is not fair on either party for work to be taken on without knowing what the price would be. Most clients are nervous of giving people an open ended cheque book!

• Billing for time focuses us on effort and not necessarily on results.

• Reward based on time encourages inefficiency and ultimately the firm will not be competitive.

• Fixed price agreements encourage us to search out efficiency savings - we are constantly looking to demonstrate the value we add by way of our expertise through spotting opportunities to save tax, improve profitability and deliver high levels of service. Typically, these are the only things that clients are willing to pay for.

• Equally there are times through our experience where we save a client, or make a client, a significant sum of money. While it may take us minutes to spot that opportunity it is as a result of years of investing time in ourselves and systems that have enabled us to achieve that. It is therefore unfair on us to have to charge a proportion of one hour for that experience. 

We have example packages on our website to help match clients who are a good fit. This saves time when qualifying potential clients we work with so we are not pouring energy into clients that aren’t a good fit with our business. 

How important is it to you to be on the ground at yacht shows?  What were your expectations for attending Cannes Yachting Festival? 

We launched at the start of the pandemic. This is the first opportunity to meet other professionals across the superyacht sector and engage with potential clients face to face so it’s hugely important to connect with many people who have only been on a video call. 

What lies ahead for your business in the next 12 months?  

Consolidating our existing relationships and focusing on business growth by creating content that educates our potential clients on all aspects of yacht ownership and finance for maritime business. Building out a library of useful content for owners, managers and maritime businesses is top of my agenda. 

Watch Alasdair's interview with Yachting International Radio