What are the benefits of an outsourced finance department?

What are the benefits of an outsourced finance department?
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    Disclaimer: This article is based on legislation which was correct at time of publishing on March 23, 2023
    This page was last updated on September 21, 2023

    For many business owners, there are valuable benefits in outsourcing their company accounting and finance functions.

    The benefits of outsourcing finance to a professional accountant are:

    • time and cost saving
    • improved financial management and performance
    • positive cash flow 
    • reduced risk
    • affordable, professional expertise
    • compliance with HRMC and adherence to best practice
    • faster business growth

    As a business owner, you may have the perception that professional finance services are costly and that you might be better off managing your own accounts. But once you take the leap of faith, you may soon come to realise that outsourced accounting should be seen as an investment, not a cost.

    Read on for more details on what outsourcing financial services entails, what types of outsourced accounting services are available and how outsourcing can drive your business forward. To apply for a consultation with the experts at Butt Miller, please fill in our contact form.

    What is the role of an outsourced accounts department?

    The role of an outsourced finance department is to take on all aspects of financial management for a company – including finance tasks such as payroll, bookkeeping and tax returns – for a monthly fee. It is an alternative to hiring an in-house financial team or assigning accounting responsibilities to a director.

    An outsourced finance team can also produce meaningful financial reports that highlight financial challenges, successes, opportunities and risks for the company to enable better decision-making.

    Financial outsourcing services

    An outsourced finance team can provide the following accounting services:

    Bookkeeping

    Basic bookkeeping is the backbone of successful financial management. An outsourced team will ensure that all income and expenditure is recorded timely and accurately so that you maintain control of your finances. The use of cloud accounting software such as Xero can dramatically streamline this process and enables two-way collaboration in real time.

    Payroll

    Payroll is complex and time-consuming. Your outsourced team can run your monthly payroll, calculate deductions accurately, issue monthly payslips to employees and file your end-of-year payroll returns. Even if you have a relatively small team, the time saved and peace of mind this provides can be priceless.

    CIS

    If you are in the Construction Industry Scheme, an accountant can ensure you apply the legislation accurately when processing your subcontractor invoices and deduct the correct amount of CIS from your sales invoices.

    Corporation Tax and VAT

    Chartered Accountants live and breathe tax and can highlight valuable efficiencies, business expenses and tax reliefs to limit your company’s exposure and ensure it does not overpay.

    Your outsourced team can process and submit your quarterly and annual returns to HMRC, ensuring you remain compliant.

    Debt management

    An outsourced accounts team can chase the payment on outstanding sales invoices to ensure you get paid on time. They will flag any potential payment issues so they can be resolved in a timely manner, preventing any bad debt write-offs.

    Management accounts

    One of the key benefits of working with chartered accountants is access to their reporting and analysis skills. They can produce financial data, in the form of management accounts, on a regular basis to provide analysis on key performance indicators (KPIs). This helps to improve the company’s financial condition and strategic decision-making.

    How will an outsourcing company work with my business?

    Your outsourced finance function will effectively become an extension of your in-house team, available to you (albeit remotely) during the working week to deal with any matters as they arise.

    Working closely with you, but with a pre-agreed level of input from yourself, they will ensure your finances are kept up-to-date so that you are in complete control of your company finances.

    Why you should consider outsourcing your finance and accounting processes

    The goal of managing your company finances is to protect your assets. Maintaining accurate financial records and managing risk are key to protecting and growing those assets. A chartered accountant, such as Butt Miller, is highly skilled at just that.

    While it’s possible to manage your accounts in-house, unless you have the professional knowledge and skills of an accountant, you run the risk of making expensive mistakes and losing out on valuable opportunities. Not to mention the time wasted on number crunching that could be spent on improving your business.

    Has your company stopped growing?

    If your company has experienced growth but has begun to plateau, then outsourcing your financial services to a professional firm of accountants will free up time to allow your senior management team to focus on growing and developing the business.

    It’s also valuable to have an external partner who can take stock of the bigger picture and contribute ideas on how to improve business performance.

    6 benefits of having an outsourced finance department

    As well as saving you the trouble of time-consuming accounting work, an outsourced accounting team can actively save money, improve your business processes and help you plan for a profitable future.

    1. Cost-effective – a firm of accounting professionals looking after your company finances can save costs, find tax efficiencies and improve your overall financial performance.
    2. Positive cash flow – a professional team managing your accounting processes will ensure that you always have clarity on your financial position. That way, you can avoid negative cash flow and reduce other financial risks that threaten your business.
    3. Valuable, affordable expertise – outsourcing your finance function to professionals means that you have access to a high calibre of expertise at a fraction of the cost of hiring someone in-house.
    4. Guaranteed compliance – outsourcing your finance department to a professional firm of accountants will ensure you remain compliant with HMRC, avoiding any nasty fines and penalties
    5. Accelerated growth – picking the right outsourced finance partner can help you drive forward the growth of your business.
    6. A high ROI should you sell – having a long-term, professional finance function will ensure you have accurate financial records that will help to attract buyers.

    Why choose Butt Miller for outsourced finance and accounting services?

    Butt Miller has many years of experience successfully providing a fully outsourced finance function for companies based in the UK and abroad.

    Our outsourced accounting solutions are fully scaleable and use the latest technology to provide our clients with a seamless yet efficient service. Working in partnership with our clients, we have seen many small businesses grow from start-ups to multi-million-pound organisations.

    If you want to know more about our outsourced accounting services, please contact us.

    Conclusion

    If you are serious about your making your business a success, then it’s important to invest in its financial health. Financial outsourcing can give you time to focus on your business, as well as access to professional advice to help it prosper and grow.

    If you’re a limited company and considering outsourcing your accounting, then check out the benefits here:

    Get in touch today
    If you would like advice and you are interested in our accounting services please call, email or complete our website contact form:

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    Who we help at Butt Miller

    We provide many different businesses with outsourcing solutions to help make bookkeeping and financial reporting simple. Our outsourced finance function is backed by sector specific experts who sit behind the scenes, crunching the numbers and providing valuable advice and insight.

    We are able to offer support across a number of different industries ranging from:

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