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There was a time when outsourcing got a bad rap, often deserved.  The term became associated with firms moving their call centres to far-flung locations or worse, getting a third party to support a firm’s IT.

In both cases, it never went as smoothly as planned with poor customer service and interminable waits to get access to company systems, being the usual result. That’s why, in the intervening years, many companies have rolled back these strategies by bringing essential functions back in-house.  Many firms made a virtue of this volte-face by extolling the benefits of having ‘UK-based call centres’ as if it’s something new.

That said, outsourcing is my theme for this blog, specifically the benefits to firms of outsourcing their finance functions to a trusted third party. While it may not suit huge corporate concerns, for SME’s the outsourcing of finance operations can be a real game-changer.

Here are just a few of the benefits such a move can bring.

Cost Reduction

SME’s can make up to 25% savings on finance admin’ costs by outsourcing this function.  By its nature, day-to-day financial management and bookkeeping tend to be a sporadic process.  There can be quiet periods where all that’s needed is the tending of accounting systems and the many associated excel spreadsheets. Then, at critical points, the Finance team is all a flurry, managing month-end, year-end, payroll submissions and quarterly summaries.

While these aspects are the ‘nature of the beast’ it can also mean that well-paid finance teams are spending up to a quarter of their time, adding very little value. The efficiencies of outsourcing to a multi-disciplinary provider guarantees all the time spent on financial management is productive and value-adding.

, The Benefits Of Outsourcing Your Finance Function

Better Use Of Technology

Regular readers will know the Enso team is evangelical about finance tech’. By investing in some of the innovative solutions available, it’s possible to automate big chunks of finance admin’ to an almost hands-off status. If you have implemented core systems like Xero allied to a feature-rich banking solution, the rest is easy. With the addition of some apps that efficiently deal with expenses, payroll and cash flow, outsourcing your finances becomes a breeze.

Take a look at products like FloatSoldo or Expensify and see the advantages they bring. Your outsourcing partner can expertly install and configure these systems and, voila, you have much more control and lower costs (and fewer headaches).

Real Expertise

By choosing an experienced outsourcing partner, you get access to a host of financial expertise. Good quality outsourcing partners will employ time-served business finance experts. Assuming you make a wise choice, then your provider will bring many valuable skills. These can include in-depth knowledge of corporate and VAT taxation, financial structuring, funding and capital management and help with issues like R&D tax credit applications.

By outsourcing to a firm run by a multi-disciplinary team of finance experts, you’ll get a more significant ‘bang for your buck’. It’s like getting all the skills of a heavy-weight finance director at a fraction of the cost.

 

Scalability

It’s a fact that well-managed firms with a solid grip on their finances will thrive.  And with growth, comes additional complexity. This can often cause concern for business owners.  That’s where outsourcing the finance function offers the ability to scale a business sustainably and securely.

Your provider can help to develop detailed plans, cashflow scenarios, risk management profiles and growth financing options. This broad knowledge is hard to develop in-house. That’s why outsourcing should be seen as a strategic choice. Using your financial data and the experience of working with other similar businesses, an outsourcer’s business growth advice is ‘worth its weight in gold’.

Everyone’s Outsourced

There a final point to make. As I write, in July 2020, in the face of Covid-19, businesses are effectively outsourcing their services wholesale. With millions working from home, the virtues of remote process management, without unnecessary oversight or micro-scrutiny have become abundantly clear.

Companies are trusting their employees to use technology like Microsoft Teams to do the right thing for their clients. Looking at the anecdotal evidence, it seems to be going well with firms reporting improved productivity, happier clients and lower costs.

If that isn’t proof positive that outsourcing is a great option, I don’t know what is…

If you’re considering outsourcing your finance operations and want to add Enso expertise to your team call me today on 0161 917 7864 or email me at adam@meetenso.co.uk

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