Building a better business with an outsourced finance function

Whatever stage you’re at in the business journey, it’s important to have an efficient finance function and a tight grip on your numbers. Traditionally, this would mean having an in-house finance person or department – someone whose job it is to keep your financial management in order. But did you know that outsourcing this finance function is now a common option too?

Catherine Leeson explains the advantages of working with an outsourced finance team, and how this allows you and your own team to focus on higher-value business tasks.

What is an outsourced finance function?

In a nutshell, outsourced finance is about engaging a team of finance professionals to take over the day-to-day running and management of your company’s finances.

In most cases, this relates to the tasks that follow on from the initial bookkeeping. This may mean taking on processing reviews, quarterly VAT preparation, credit control, as well as providing cash flow reporting and monthly management information for the board.

Outsourced finance isn’t a one-size-fits-all kind of offering, though. The outsourced service that’s offered will vary depending on the type of business and where you are in the business journey. A startup with one in-house bookkeeper will need a very different outsourced finance function to a well-established corporate business with a Chief Financial Officer (CFO).

At Haines Watts, what we do is review your existing finance set-up, look at where the gaps are and then tailor a service to meet your precise business needs. Once we’re in place, we can also recognise the one-off jobs that might be needed, like forecasting, or help with funding.

Why use an outsourced finance team rather than an internal team?

Running an effective internal finance function can be a challenge. When you work with an outsourced finance team, you have access to a whole mix of experienced and qualified people, from seniors to juniors. We have that deeper experience, and that’s so valuable when it comes to going beyond the basic compliance.

Key advantages of an outsourced team include:

• A flexible team that meets your needs – rather than hiring several full-time, in-house roles, you have access to a flexible team of professionals. This outsourced team can flex, scale and reduce as needed, so the service fits your exact current needs.

• A greater knowledge base – we work with a wide range of businesses, so we can make use of knowledge sharing from one client to another. This really deepens the level of service we can offer and allows us to give better and more timely advice.

• Access to a wider network of specialists – as a nationwide firm, we have access to specialists in VAT, employee services, R&D reliefs and many more areas. We can feed all of that into the mix to find the specialists you need and get the right answers.

• Fewer costs to get up and running – unlike hiring internal staff, there are no recruitment fees, no training fees and no ongoing payroll costs. And if someone is on holiday, or sick, we back-fill that gap to provide a replacement.

• A mix of remote and office-based staff – as we’ve learned over the pandemic, remote working offers real flexibility for your workforce. As an outsourced team, you’d be able to call on remote-working staff, as well as having staff in our offices or at your premises.

Becoming a key part of your team

An outsourced finance team can become an invaluable part of your team. We’re entrenched into your day-to-day operations, and that’s what allows us to work so closely with you, flexing and tailoring the service to give you the best possible value.

This close working relationship also means the service can evolve as your business needs change. If you’re starting to scale up and grow, what you need now from your finance function will be very different to what you needed three months ago.

It could be that the company moves to a group structure, with more complex financial reporting. Or it may be that a transformation project is needed to update your finance software systems. We can step in and step back as needed – so your outsourced team becomes a variable asset that you can tap into when you need it.

At Haines Watts London, we can resource a full finance function for you. That would cover most roles from trainee to senior, with managers, an associate partner and a partner on board.

The key stages of setting up an outsourced team

Getting an outsourced finance team up and running does take a certain amount of preparation and planning, of course. But having supplied outsourced finance services to such a range of owner-managed businesses and SMEs, we know the important steps to take.

Generally, the set-up process will include

• Reviewing the current finance function – we find out how the current function operates, what systems are in place and what the business will require.

• Designing a customised outsourced finance function – we outline what services we offer, which areas of the finance function we would cover and what this would cost.

• Handover from the existing team – we talk to your current finance lead and relevant team members, so we get a detailed handover.

• Creating a systems bible – once we know the brief, we can then design a ‘systems bible’ that outlines all the key tasks, processes and procedures.

• Deciding on the best software and systems – depending on the software you have in place, we’ll either use your existing systems or will look to upgrade to a new platform.

• Implementing the processes – based on the systems bible, we’ll then look to implement a brand-new outsourced approach to the main finance tasks.

• Divvying up finance tasks – we’ll also agree on which tasks belong to the internal team and which tasks the outsourced team will be responsible for.

• Looking for efficiencies – at each stage, we’ll be looking for opportunities to make things faster, more productive, more efficient or to give higher quality outputs.

Because we act for so many clients, we see a vast number of different softwares, apps and systems and can pick the best for the job. In most circumstances, the ideal app stack is to have Dext Prepare doing the automated bookkeeping and digitisation of your documents, with this plugged into Xero as your main cloud accounting platform.

With Xero as your core hub for financial management, you have the online tools to help with expenses, payments, credit control and even basic financial reporting.

Forecasting and reporting

One area where the outsourced model really makes a difference is with your forecasting and reporting. With all your transactional data safely imported and stored in Xero, our team can produce extremely detailed real-time reports and projections for you.

We’ll provide reporting using a variety of tools, including Xero’s built-in profit and loss and balance sheet reports, customised Excel templates for forecasting and even detailed business intelligence, analysis and KPI tracking with tools.

You can tailor this reporting to track things by region, or branch or product. And this deeper view of your numbers is a real bonus when it comes to monthly board meetings, understanding performance and making the most well-informed decisions – with data to back up your choices.

What we do is give you better insights – and prompt you to ask the right questions. Self-review is so difficult, so we can come in and offer an independent and objective viewpoint.

Putting outsourced finance at the heart of your strategy

To get the best from an outsourced finance function, you have to understand the value we can bring – and the very real and tangible difference it can make to your business performance.

We become an intrinsic part of your team. Whatever it is you need from us, we can provide it, whether it’s great management information, a good understanding of your future cash position, finding options for retaining staff or looking at things like R&D tax relief.

The key bonus is that you don’t have to buy the whole shop. You can cherry-pick the services, projects and tasks that you need us to focus on. And that truly is invaluable.

Talk to one of our advisers about setting up your own outsourced finance team