Why you need to outsource your finance function and how to go about it…Part 1
Have you got the right person in the right seat?
As a business owner, you’re used to wearing lots of different hats, but for those of you who are serious about increasing profits, you have to make your finance function a priority.
Why? Because ultimately this is about so much more than ‘doing the books’ and submitting your year-end accounts; it’s about having accurate records that reflect the state of your business in this moment, so you can make the right choices.
Your business and your future are far too important to leave to chance, so it’s crucial that you’ve got the dedicated resources and right skills in place to support you.
But when it comes to evaluating the effectiveness of your current finance function, where do you start?
In part one of this three-part series, I’ll give you some key questions to consider to help you see potential areas for improvement:
- Is your bookkeeper the right person and are they doing a good job?
You’re a business owner; you’re great at what you do, and you’ve probably worked extremely hard to get where you are today. BUT how do you know what makes a good bookkeeper?
Most business owners hire exceptionally well for roles that they’ve done to a high degree of competency themselves – then they train and handover responsibility to others; for example, an experienced fencing contractor who grows the business and goes on to hire teams for additional sales and installations.
But if the role is not within your area of expertise, how do you know if the quality of work is good? How do you know if they’re taking longer than necessary to complete the work?
If you pay a dedicated accounts specialist or bookkeeper on a per-transaction basis, the time it takes is no longer your concern. You can leave the finances in safe hands and focus your time and energy on bigger-picture priorities.
- Are your employees’ goals aligned with your own?
Every successful business owner wants to get things done as accurately, efficiently, and cost-effectively as possible – because that makes good business sense. But how sure are you that your employees’ priorities are the same as yours?
An internal bookkeeper is unlikely to be motivated to improve efficiency, if you bring in tools and automation to carry out some of their tasks they might feel they are doing themselves out of a job.
An accountant on the other hand is motivated to keep excellent records – it’s in their interest because it helps them to produce your year-end accounts more quickly and accurately with less time spent on queries.
And, are you paying through the nose for lower-paid tasks? One role for all tasks is rarely cost-efficient. Many internal accountants who are employed at a senior level, and commensurate salary, end up doing lower-paid work as part of their role (such as bookkeeping). That’s an expensive way to run your finance function.
Ready for part two?
Next time I’ll be looking at the best-in-class systems and business continuity that an outsourced finance function offers, and how you could reap the benefits.
Can’t wait for more insight to get you in the best financial shape?
There’s a wealth of information in my business planning series. Click on the following link to download your free workbook.
Or speak to me directly to discuss if an outsourced finance function is right for your business >> Book your free discovery call.