Outsourcing your finance and accounting

Outsourcing your finance and accounting work can be a great way to supercharge your business and bring you the peace of mind that properly managed finances delivers.

There are a whole host of benefits to bringing in an outsourced finance team to give you access to fantastic skills at a fraction of the cost of hiring direct.

In this piece, we are looking at those benefits together with the process of outsourcing. We will cover;

  • What is outsourcing?
  • How outsourcing works
  • The benefits of outsourcing
  • Covering the whole finance function
  • How to choose an outsourcing provider
  • Is it worth it?
  • Next steps

What is outsourcing?

Outsourcing is giving over the management of one or more parts of your organisation to an external provider.

For example, you may decide to get an HR specialist to run your people function or, as we are discussing here, your accounting to a finance provider.

Many big companies outsource large and essential parts of their work and it is not unusual to find companies that outsource everything except their core competencies.

It may also surprise you to learn that there are companies out there that outsource even their manufacturing so that the company itself only handles the marketing and administration of the business.

How outsourcing works

The way that outsourcing works can change depending on your needs and what your outsourcing partner is able to provide.

You may decide that you want to outsource everything to do with finance. This means that your bookkeeping, management accounting, payments, credit control and strategy are all done by a third party.

Alternatively, you might want help purely with bookkeeping or want only to bring in an outsourced Financial Director.

The key here is to use outsourcing as a way of augmenting your core competencies in a way that works for you rather than simply accepting a standardised service package from an inflexible provider.

The benefits of outsourcing

There are a lot of benefits to outsourcing finance and accounting for companies and that’s why the business model has proved to be so popular with companies both large and small.

Time – people who work in finance full-time are likely to do a job quicker and to a higher standard than a harassed business owner who has 101 other things to do.

If you put your finance and accounting in the hands of professionals then you’ll have much more time to devote to actually running your business

Access to qualified experienced people – the uncomfortable truth is that finance and accounting staff are expensive, especially at higher levels. This is often something that small businesses can’t afford, especially in the early days.

Outsourcing means you get access to the skills you need but at a fraction of the price.

Money – Whilst we are on the subject of money, it makes financial sense to outsource in other ways too.

Think of it this way; Imagine you can earn £60 per hour in your business and an outsourced bookkeeper will cost you £30 per hour. Every hour you spend doing your own books is actually costing you £30!

Outsource your finance work and you’ll find that you have more hours to do profitable work.

No need to recruit – recruitment can be a real bind, especially if you do it yourself. Advertising, responding to enquiries, sifting CVs, first, second maybe even third interviews.
It all takes time and a lot of effort. With outsourcing, you don’t need to do any of that.

Flexibility – One of the biggest benefits of outsourcing your accounting and finance functions is the inbuilt flexibility it brings.

If you need to bring in extra resources at busy times of the year then you can do that and when it is quiet then you can buy fewer hours.

Peace of mind – Don’t underestimate this one whatever you do.

One of the biggest problems for small business owners is mental health and worrying about your accounts isn’t going to help the situation.

Knowing that you aren’t going to miss a tax deadline, that you’ve got your accounting right and that somebody is looking after the financial well-being of your business is priceless.

The peace of mind outsourcing brings is worth the investment alone.

Covering the whole finance function

We mentioned earlier that many companies work on an almost totally outsourced basis and this is something that has appealed to a lot of our clients.

A totally outsourced finance function completely changes your relationship with your business numbers because it gives you access to high-level accounting resources that you couldn’t otherwise afford.

It is also true to say that outsourcing the whole lot to one firm means that you aren’t passed from pillar to post trying to get complex work done and you can be sure that things haven’t fallen through the cracks.

Typically businesses will outsource;

  • Bookkeeping. All the tasks that keep the lights on such as sending invoices, receiving payments, keeping your accounts payable up to date and making up payment runs for your suppliers
  • Credit control – making sure your customers pay their bills on time and reducing your bad debt cost
  • Management accounting – producing budgets and forecasts, managing your cash flow forecast and running operational reporting
  • Finance Directorship – being the financial brain of your business and contributing to your ongoing strategy. Keeping the finance function working together.
  • Project finance – finance and analyst help for special projects that you are doing like business acquisitions or software implementation.

The aim is simple; to provide a finance platform to allow your business to thrive and grow, even during uncertain times.

How to choose an outsourcing provider

What should you look for when you are choosing an outsourcing provider?

A good starting place is to take a look at the pros of outsourcing and ask yourself if your provider will be able to help you realise those benefits.

For example, one of the key benefits is that you get access to qualified and experienced staff just when you need them, but does your potential provider actually have any people that fit the bill?

Secondly, take a look at how they propose working with you. Will their processes and methods save you time or actually end up causing more work than they save?

Next, ask yourself if they actually ‘get’ your business. An outsource finance team that really understands the sector you are in and the challenges you have is worth its weight in gold.

Finally, make sure that you get on with the person you are working with. An outsourced finance department will have a chief point of contact and you should be in a position to be able to rely upon them and trust what they say.

By the same token, if you are bringing in an outsourced Financial Director you will be using them as a key part of your strategy-building process so you need to have a good rapport.

Is it worth it?

Admittedly as one of the UK’s leading outsourced finance teams, we would say this but YES!

Outsourcing is a brilliant way to bring onboard skills and experience that you could never afford or justify employing directly.

It’s flexible, simple and can supercharge your business growth.

And best of all you can relax knowing that your business health is in good hands.

Next steps

So how do you get started with outsourcing your finance and accounting function?

Well, the first move is to decide what you want.

Now we know that sometimes this is easier said than done. After all, do you need a bookkeeper? A management accountant? A Financial Director?

If you know exactly what you want then that’s great but if not then why not give us a call? We’ll be happy to discuss the particular issues you are facing and what help you need and then give you an idea about exactly what skills you should be bringing in.

Call us now and let’s get you that peace of mind!