7 Reasons why you need to outsource the finance function of your business
This could be a game-changer.
When it comes to your business finances, how much control do you have? If there are inefficiencies, doubts or unknowns, outsourcing could be a game-changer. In the past, clients would outsource their finance function but they had no visibility of their data as it was held off-site. Cloud accounting has changed all that. It’s made outsourcing a far better and easier option. Here are 7 reasons why:
- It’s cheaper
In most cases, it’s actually cheaper to outsource your finance function to an accounting practice that is geared up for offering bookkeeping services than it is to employ your own bookkeeper.
- You’re in control
As a business owner, you’re a technician of what you do, but do you know what a proper bookkeeping and finance function actually means?
When you hire a bookkeeper, you might say “well just do the job”. But you have no way of checking if they’re doing the job well, badly, inefficiently, or what it’s supposed to look like at the end. The only way you ever get this checked is if you work with an accountant that looks at the quality of the accounting records at the end of the year and prices their accountancy fees based on the quality of those records. (And the vast majority of accountants don’t).
If the bookkeeper did a better job, it would take less time for the accountant who should then charge less – which would save you money.
- Pay for what you actually need
Most bookkeepers work on an hourly basis so there’s no motivation for them to do the job more efficiently. If they’re an employee, they’ll make sure they fill their time. And when you ask “blimey, why is it taking so long?” they’ll probably answer: “well you don’t understand bookkeeping, do you? It takes that long”.
In truth, if the bookkeeper is motivated to do the job more efficiently and better – like a business owner or accounting practice is – especially when you charge based on transactions and not on time – that’s when you have a practice that will introduce new, quicker, more efficient methods of working. They’ll use tools like Hubdoc, GoCardless, Stripe, PayPal and Apps that link directly into Xero to make the bookkeeping function that much more efficient.
There’s no motivation for an employee to do that. And there’s no motivation for a self-employed bookkeeper who is charging by the hour to do that.
- Make better use of resources
One of our clients told us that they had a fully qualified chartered accountant as an employee. They wanted to get management information from him every month, and in FIVE YEARS they didn’t get a single report. Why? Because really, he was just doing the bookkeeping.
After we got involved, he resigned and left the business and was replaced by an internal bookkeeper who actually does a better job. Her remit was simpler, a new system was put in place, she realises she just has to do the best job she can and utilise the tools we’ve given her. Easier, cheaper – better results all round.
- Continuity of service
In your business, you may only have one person in your finance function. So what happens when they go on holiday for two weeks? Everything just grinds to a halt. When you’re outsourcing your finance function to an accounting firm or a bookkeeping practice, they are there for you 24/7. You can send them information, they’ll process it in the time you need, you’ll have up-to-date, accurate records. You’ll also be able to be hold the practice to account if you feel they’re not doing an exceptional job.
- Save £££s
Outsourcing your finance function means that you’ll be accessing the highest skill set without the cost of CPD courses for your in-house accountants or bookkeepers. You won’t have to pay for their holiday or sick pay either.
The best option we suggest is to have someone internally that can raise a sales invoice – because getting your invoices out is time-critical – and also someone to make your payments. We tell our clients what to pay, who to pay, and how to pay, but they make their own payments. This works well because it gives the business owner full control of their own bank account.
- Intelligence to drive your business forward
With an outsourced finance function using the best tools and the latest industry expertise you can begin to ask “show me some of the reports you can run for me” and this immediately gets into deeper, more meaningful information and better conversations. What is it you want to see? What do you need and want to know? Ultimately, you’ll get information that helps you sleep better.
Could outsourcing benefit your business?
Most definitely. Click on the following link to find out more >> Book a free consultation