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Can't find a Finance Director? Why you should outsource your finance function as you scale-up

How would you rate your current knowledge of accounting? If you answered 'not very good', then you wouldn't be alone. The majority of Founders are skilled in their product, their market or sales development but very few have accounting or finance expertise.

For ambitious founders looking to scale their business, this lack of knowledge can be a significant barrier. This is where an experienced Finance Director can help and outsourcing your finance team is a proven model that provides affordable, flexible support as your business grows.

Finance professionals play a vital role in every organisation and at every stage of business growth. They ensure that financial transactions are recorded correctly and accurately. In addition, they also provide valuable insights into the company's performance, helping founders make more informed strategic decisions.

A recent survey by Beauhurst showed that those companies with a finance function had significantly higher turnover than those without. This was true at every stage of growth and the gap only widened as the companies scaled.

Outsourcing your accounting and finance function is a way to secure these skills at a price your business can afford.

What is Outsourced Accounting or Outsourced Finance?

Outsourced accounting is when a business hires a third party (outside of their company) to complete all their accounting processes. Outsourced accountants handle everything finance related for the business including; bookkeeping, payroll, financial reports, management accounting, tax, accounts payable, accounts receivable, chasing outstanding debtors, and other accounts-related services.

Where it works well, your outsourced finance team will work seamlessly with your sales and operations teams and will feel like part of the business.

Why should I outsource my accounting and finance needs?

The main advantage of outsourcing is cost. The average salary for an in-house Finance Director in 2021 was £100k - £125k and you would still need a bookkeeper to process and record the transactions for a further £27k per annum. By outsourcing to a team of qualified accountants you can get part of a bookkeeper, part of a qualified accountant and part of a Finance Director for a fraction of the cost of hiring. You can instead pay them per hour or per project or a monthly fee for a specified scope of services.

By outsourcing you can get part of a bookkeeper, part of a qualified accountant and part of a Finance Director for a fraction of the cost of hiring and pay them per hour or per project or a monthly fee for a specified scope of services.

Another benefit of outsourcing your finance function is that you don't have to worry about keeping up with all the latest changes in accounting software, rules and regulations. Instead, an experienced accountant will keep up to date with new developments and implement them for you quickly.

And if you needed more reason why you should consider outsourcing, a major one is that it frees up your time and allows you to focus more on growing your business. When you've got your head down managing the business' finances you might miss significant opportunities and lose potential clients or customers. Alternatively, if you are still processing all the finances yourself, you may just want to get your evenings and weekends back!

How do I outsource my accounting and finance needs?

When you decide to outsource your accounting and finance processes, make sure you understand what you want from the service provider e.g.

  • Do you want help with raising sales invoices, chasing outstanding debtors and paying supplier invoices?

  • Do you want someone to prepare monthly management accounts, review your cash flows and tell you where you could save money or when you are going to run out of cash?

Scoping the level of service and support you will receive from your outsourced accountant is key to ensuring you get the support you need. Clarify the frequency of support, for instance are they going to process transactions daily, weekly or monthly? Clearly agree who is going to do what and how information and records will flow between the business and the outsourced accountant.

By carefully scoping the level of service you are looking for you can match your requirements to the right accountant.

What is the objective of outsourced accounting?

You free up valuable time to concentrate on growing your business. You can focus on sales development, product development, strategic growth and all the other bits of your business.

By receiving regular reports on the performance of your business, you are more informed and can make better decisions to drive growth to set your business ahead of your competitors.

What next?

The evidence is clear, if you want to set your business apart from the competition and give yourself the best chance of success, you need to get your finance function in place early. The fastest and most effective way to do this as a small business is to outsource. Get in touch today to find out how we can help you.



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