The value of an outsourced finance team

When you’re busy running an owner-managed business, having expert outsourced finance support can add immense value for your company.

Since the advent of cloud computing and the remote office, it’s become easier than ever to outsource specific business functions, and outsourcing your finance team is an increasingly popular choice for many owners. But what are the advantages of outsourcing your finance team? And what specific elements of your financial management can this team take on?

Jane Wills explains how the flexibility and objective analysis offered by an outsourced finance team can be of immense value to your business.  

How does outsourcing your finance function work?

There are various levels of outsourced finance function. At the ‘light touch’ end of the spectrum, it could mean topping and tailing what your internal finance team already does, and giving you the information you need to run the business. That might mean a few hours per week of time and a monthly management report, where you may not have that capacity in-house, or want to get an outside viewpoint on your numbers.

The other end of the spectrum involves running the entire accounts department. For some clients, we do everything that would usually be covered by your internal finance team.

That means running your payroll, filing your VAT returns, processing invoices and chasing your debts. We also have access to bank accounts and accounting software, and we act as your tax agent. To complete the end-to-end service, your clients and suppliers will also deal directly with our finance team, via your inbox. So, in effect, you don’t have an in-house finance team at all. We do everything.  

What are the benefits of an outsourced finance team?

At the top end, one of the big benefits is that you get an experienced eye on the business. At Haines Watts, we have lots of experience across so many businesses, sectors and specialist industries. We also have access to benchmarking and industry-specific data, so we can keep you informed and up to date with what’s going on in your sector.

Some business owners know what they want the accounts to look like, but they need us to explain WHY they look like they do. My role is to demystify the numbers and give you that external assurance, above and beyond the usual audit work.

Numbers speak to me. I can see if the picture being drawn by your management accounts is right, and you only get that sixth sense with experience. Over time, you get an understanding for what feels right and can see the variances, patterns and trends that indicate an issue.

What I’m doing, when heading up the outsourced finance team, is adding enough information and insight to help you, the business owner, understand why your business is doing well – or why things aren’t going according to plan.  

Helping you get to grips with your numbers

Business owners’ knowledge of accounting and their financial numbers does vary. It depends on the business type and industry, the size of the business and the background of the owner too, of course – but it’s important to understand that you don’t need to be a numbers specialist.

In my opinion, you don’t need to be good at numbers to be a good entrepreneur; someone else can always interpret the numbers for you. A perceived weakness in certain areas of business doesn’t need to be a hindrance. Richard Branson is dyslexic but he has the ideas and strategic knowledge to be successful, and surrounds himself with talented people who help him to achieve his goals.

My job is not to be too black and white. I don’t direct the business. As the owner, you know your business far better than me – it’s your life and your baby. What I do is:

• Make sure the accounting work is done perfectly – so you’re meeting your compliance and governance standards and have a solid financial base for the business.

• Interpret the numbers for you – allowing you to understand the story that the numbers are telling us, and knowing how they impact on your plans for the business.

• Flag the issues and point out the important numbers – so you’re always aware of any cashflow shortfalls, peaks in aged debt, or unusual costs and expenses.

• Show you where the pinch points are – so you can see when there are issues in your shorter and longer-term financial health, and can take proactive action early.

Why YOU are still the decision-maker

I can talk through WHY we see things happening with your finances, but I’m not the decision maker. I’m a decision facilitator, in the same way that a teacher teaches kids and develops them in certain ways, but it’s the parent’s job to flag things up and to bring up their child.

I’m here to ask you the right questions and to facilitate the best outcomes for your company – and this means paying the right level of consideration to the whole running of the business.

For example:

• Have you thought about WHY your cashflow is low this month?

• This is what the cashflow numbers say to me, but do you agree?

• What areas can we focus on to reduce cash outflows and boost cash inflows?

• What does your cash runway look like for the next few months?

• Do we need to look at accessing some additional finance?

It’s not about walking in and telling you what to do. We’re there to work alongside you, as a sounding board, a long-term business partner and a trusted adviser. The future is highly unpredictable, and I don’t have a crystal ball, but I can give you assurance around whether you’re running the company in the best possible way.  

A highly flexible outsourced resource

As an outsourced resource, we can be what you want us to be. We can save you time, or give you confidence around your interpretation of the figures, but I’m driven by what you, the owner, expects from an outsourced service.

We’ll sit down to talk through your aims, and we’ll work together towards these goals. In that sense, it’s a true collaboration, broken down across three core areas of service.

These three areas are:

1. The high-end management accounting – the high-level financial work is done by myself and our more senior staff members, providing you with the management numbers you need to run the business, monitor your performance and make the right decisions.

2. The day-to-day workflows and financial management – we have people across the outsourced team who will focus on bookkeeping, payroll, VAT and all the other specific functions that keep your financial operations turning over.

3. The administration and running of the team – our admin support people coordinate the whole function, monitoring the inbox, picking up requests and assigning tasks to our staff. So we have a suite of people that all bring something to the team.

On top of this, we have access to the full network of Haines Watts’ skills. So it might be that you have a VAT query, a payroll query, or a pressing legal question – with access to our network, there’s always an expert we can turn to.

For example, we have a large Spanish client that has asked a lot about the implications of Brexit on VAT and import/export etc. I can provide a better VAT query service than an internal accountant. I know the VAT rules, and our team knows the VAT process, but I also know your business and can funnel the queries to the right place.  

Key reasons to switch to outsourced finance

Running a business can be hard enough, without the extra worry and stress of producing, interpreting and utilising your own management accounts. By switching to an outsourced finance team, you free up your business time and can let the specialists take care of curating the course of your finances.

Important benefits of opting to outsource include:

• Having confidence in your numbers – the impact of Brexit, Covid-19 and the current economic recession are all making it harder to do business. We keep you on top of your numbers and give you real confidence in your financial management, so you can weather the storm and come out the other side.

• Filling your internal FD role – it can be difficult to find the right person to head up your internal finance team, so opting for outsourced makes sense in many cases. This could be driven by employment issues, what you want to pay for the skills you require, or a desire to get more confidentiality around things like management reporting etc.

• Having your numbers in the cloud – cloud accounting technology has changed things a lot. Everything’s connected and fully integrated. We work with the numbers in the cloud, and that allows us to run the accounting process and flag things from any location where there’s WiFi.

• Navigating the UK tax system correctly – as accounting experts, we know the tax system, the penalty system and all the UK-specific legal issues that apply to the smooth running of the company. So, you can trust us to curate your tax planning, your use of tax reliefs and enterprise incentives, and the overall efficiency of your compliance work.

• Setting up UK subsidiaries – if you’re an overseas group, we can help you with inward investment and setting up a UK subsidiary in this country . Financial compliance can work very differently in different countries, so you have the assurance that you’re ticking all the correct boxes and making use of all the right business incentives.

Talk to us about switching to an outsourced finance team

At Haines Watts Slough, we believe that switching to an outsourced finance team can have a multitude of benefits for your owner-managed business.

Once you have our team working with you, it gives you the confidence and assurance you need in your numbers. You can use that as a foundation for decision-making, and your use of outsourcing doesn’t have to be long-term or permanent. You can turn an outsourced function on or off, as and when it’s needed, to cover a period where finance support is required.

Talk to one of our Slough Business Advisers about switching to an outsourced finance model.