Outsourcing IT, facilities and HR has always been a common practice among small and medium-sized enterprises (SMEs) as it affords them the time and energy to focus on running their business.
It can also make great commercial sense for SMEs to outsource their finance function, and there are several compelling reasons for this.
As well as saving money, it provides other benefits, such as giving you access to innovation and a greater depth of specialist intelligence, freeing you up to focus on strategy.
Cloud accounting software can provide a real-time view on business performance, cash flow and business finances. These key metric dashboards help SMEs work smarter and faster.
The considerations around financial outsourcing are usually driven by a business event “trigger”. These could include a review of the finance function for security and effectiveness, difficulties in recruiting high-quality personnel, emergency accounting support required due to leavers, sick leave or maternity or the potential sale of a business.
Each of these events can prompt a need to review the way your finance function operates now and in the future.
The cost savings cannot be overlooked. The automated processes and ability to tailor the support required on an individual SME business can bring about significant savings. As a rule of thumb you would expect to save least 25% against existing total salary and associated costs of your financial function.
The concept of outsourcing your finance function might seem daunting at first. These concerns can be overcome by taking some key steps and continually assessing the impact and benefits of this business transformation process.
Firstly, the choice of provider is crucial in ensuring the support and technical knowledge required during the process and on delivery are proven and secure. Choosing a provider who has experience within your sector or with your size and type of business is crucial. Ask for recent client testimonials.
It is vital that your chosen provider clearly scopes the changes and milestones required and with the appropriate technical and legal input to ensure a smooth transition to outsourcing.
This scoping process should assess your existing systems and outputs and enable you to streamline and tailor them, not just for internal management purposes but also for meaningful key metrics and dashboards for third parties, such as banks and investors.
In addition to the business bookkeeping, accounting and management accounts, this service can also provide accurate cash flow forecasting, credit control support and an FD service to support the business.
At Mazars we have seen SME businesses throughout the UK considering this flexible, fixed-cost and high-quality output model.
These businesses can range from new start-up, fast-growing SMEs through to mature businesses whose finance functions have developed over many years and are no longer fit for purpose.
The technology and support are out there to implement this flexible finance model – this is the future for SME businesses.
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