Why Outsource your Finance Department?
Written by
Chris Wright
September 1, 2019

Our business is providing your business with a full service Finance Team, from Finance Director to Book keepers. But why would you do that? Surely you need to keep finance in-house? Well, there are a number of reasons for outsourcing, and I look at some of these in this article.

A specialist service provider can add value by bringing decades of experience of similar businesses. While large businesses can and will recruit experienced Finance Directors and support staff, this is a substantial overhead cost which smaller businesses just can't afford or justify. Yet smaller businesses still need this level of expertise and experience to feed into their management team.

The reality for most smaller businesses is that employing an experienced Finance Director and accounting staff has a base fixed cost which is not economic or even possible for many small businesses.

Keeping up to date with and on top of the latest developments in accounting technologies and processes is a specialist, full time, job. It is increasingly necessary to be involved with software suppliers and their infrastructure to get the best out of a system, involving attending conferences, participating in discussion forums etc. This is a heavy overhead for a single company to carry, but it is exactly what a specialist provider is doing to maximise their own business value.

An external over view of the company’s accounts and management information can be immensely valuable, avoiding the problems associated with the business owner failing to see the wood for the trees or viewing everything with a biased view. Using a specialist outsourcing team will bring all of their experience from working with many other clients, both now and over the years, to the table.

If and when a company is seeking external investment, bank finance, Government grants etc. having an external financial advisor on tap is extremely helpful. It validates the financial information being sent to the external agency. It suggests that the company takes reporting and compliance seriously and lowers the perceived risk of the investment.

Outsourcing removes the stress of compliance and offloads this to a specialist company that is wholly focused on ensuring that returns are filed on time and that legal and regulatory requirements are met.

Increasingly, to get best value and offer maximum flexibility to customers, businesses have to operate with a multiplicity of payment processing providers and web interfaces. These all require input from the finance department to set up and maintain. Regulations change rapidly in these areas and it is important, and a significant overhead, to keep up to date with the latest version of best practice. Here again, the benefits of scale come into play, an outsourcing team will be dealing with the same issues across a range of their clients and will thus be more up to date and find it easier to invest in the learning required to get to grips with the changes as they arise.

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