Should you be outsourcing your finance function?

04 July 2023


Outsourced Accounting,

Expansion & Improvement

Growing your business means dealing with constantly changing priorities, but one area that business owners often overlook is finance. As your organisation scales, existing financial processes may no longer be fit for purpose, going beyond the capacity or expertise of your existing team. Entrepreneurs find themselves in the conundrum of needing additional support, yet unable to commit to a full-time headcount. This is where outsourcing your finance function can be a game-changer.

Outsourcing your finance function offers you an opportunity to access specialised services that can adapt to your needs, from accounting and management accounts to VAT and bank reporting.

Gary Heywood explains why you should consider outsourcing your finance function and how it can enhance your business.


What are the challenges with in-house financial management?


Growth is exhilarating, but while you focus on sales, marketing and growing your team, it’s easy to fall behind on the back-office processes that underpin the efficient functioning of your business. With more customers, the volume and complexity of financial transactions surge, requiring additional capacity and specialised skills. Without the right support, the increased workload can put a strain on your team, raising the risk of errors, as overstretched teams attempt to manage increasingly niche tasks in which they may not have the relevant experience.

As well as risk, there is opportunity to consider. As you grow your business, it’s ever more important to understand the actual story behind the numbers – this requires not just sourcing complete, accurate and up-to-date information, but also having the relevant expertise to see what’s going on, highlighting potential cost savings, commercial opportunities and process improvements.

For owners managing a finite hiring budget, these issues often fall in a perplexing grey area – too important to ignore, but not sufficient to justify the hiring of an experienced, expensive full time financial director (FD). The answer? Access the skills and information you need on an ad-hoc basis in line with your needs.


What advantages does outsourcing bring?

The core advantages of outsourcing is flexibility – as your business evolves, so can the service mix you need, in line with your own internal team, capacity, challenges in your market or commercial direction.

Working with a national network such as Haines Watts gives business owners access to a huge range of domain experts in everything from payroll to audit and forecasting. By working with your provider, you can adapt your service model to the most pressing issues facing your business to ensure you’re never left high and dry.


Optimising use of internal resources

Rather than full replacement of internal financial functions, outsourcing enables you to allocate tasks strategically within your business.

For team members who are currently working on financial tasks that may not be in their domain, this can be a significant benefit, helping them focus on areas where their skills can have the most impact. This could include taking unnecessary financial tasks off your plate, or reallocating mixed-role team members onto their core competency areas or new development paths.


Cost-effective finance

In comparison to a full-time in-house financial team, with fixed costs, skills and capacity, outsourcing provides you the flexibility to use services as needed. Moreover, your approach can evolve in line with your business.

This could mean varying services as you hire new team members, adding services ad-hoc when strategically necessary, such as performing due diligence on contracts or supporting with fundraising, or simply scaling capacity as your organisation grows.


Driving value with data

Outsourcing your financial department offers not just the processes and execution to fulfil the functions your business requires – it also gives you access to experts who can help you make better decisions to guide your future.

This starts with robust systems for understanding the data in your business with comprehensive expense and sales reporting to produce regular management accounts and P&L reports. These can then be reviewed in conjunction with your outsourced expert – who may be acting as a virtual FD – to help you track the trends behind your performance and spot problems before they arise.

This could include tax planning, purchasing and asset strategy or managing business structure to optimise your risk-management, all based on robust data.


Creating systems that scale

As well as being experts in finance, an outsourced expert can help you build the right systems within your business to power efficient growth. These can include:

  • Cloud accounting and real time data
  • Forecasting and business intelligence dashboards
  • Automated expense and sales reporting
  • Efficient payroll and personnel management

By investing in these systems at the right time, you can ensure that you stay in control as you grow.


When is the right time to outsource the finance function?

As is so often the case, the earlier the better. Often, owner-managers seek outsourcing when the in-house team is overwhelmed, or deadlines are missed. However, the proactive approach is to recognise the need for bolstering the finance function ahead of time and start preparing before risk arises.

Outsourcing should be used to complement your existing team, and as the business grows, you can recalibrate the blend of in-house and outsourced services. For instance, an outsourced service may start as a full-service compliment when your team is small, then move to supporting your internal FD by taking over certain tasks to maximise efficiency and use-of-time by internal experts.


What does an outsourced financial function look like?

At Haines Watts, we recommend a comprehensive outsourced package that helps your business focus on growth while we handle the essentials. This can encompass payroll, VAT returns, management accounting, FD services, audits, corporate tax, year-end accounts, and company secretarial services. Moreover, our experts can also guide you in determining the optimum blend of services and advising when to scale resources, if and when it would make more sense to move a task in-house, or out.

Our team works with the latest software and tools, including Xero, Quickbooks, cloud-CRMs, forecasting and BI platforms. By implementing shared visibility and real-time information, our experts can work as an extension of your team to give targeted, tailored advice that provides tangible value day to day, so you can grow with confidence.


To find out more about how we support your business with an outsourced finance function, get in touch with one of our experts.


Gary Heywood

Managing Director