Outsourcing a Finance Function: Is It Right For Your Business?

Outsourcing isn’t a groundbreaking concept in the business world.

For decades, organisations across the globe have successfully outsourced everything from individual production lines to entire departments.

While outsourcing your finance or accounting function may seem like a big step for your business, the fundamental drivers of this move are focus and expertise. Simply put, with a team of trusted experts in control of your accounting function, you are able to channel your time and effort into other business priorities such as growth, innovation and improving your product or service offering.

This blog delves into the pros and cons of outsourcing your accounting or finance function to help you decide if an outsourced, blended or in-house team is right for you.


The Benefits Of An Outsourced Accounting and Finance Function 

Some of the well-known benefits of an outsourced or blended finance team include:

  • Reduced internal workload
  • Savings on infrastructure and technology costs
  • No or reduced internal training costs
  • No or reduced key staff dependencies

If implemented correctly and with a trusted outsourcing partner, these benefits extend to:


Compliance And Best Practice

Staying current on complex changes to accounting and taxation standards is essential. An outsourced team will help ensure you are compliant with the multitude of rules and regulations that govern your operations. In most instances, an outsourced function can keep ahead of these changes, preempting issues before they become apparent. Your outsource partner will also have other clients in similar industries which will allow them to understand the challenges you will face as your business grows.


Cost-effective Non-cyclical Resourcing

Access to short-term accounting resources can be a cost-effective solution to non-cyclical business needs. Instead of hiring and training a contractor of unknown ability, or wasting money on a full-time headcount, you can increase your capacity on a needs basis. Relying on your outsource partner to deploy skilled staff when and how you need them also allows you to maintain your focus and time on what is important.


A True Business Partnership

When your accounting provider has the ability to provide additional services, the value proposition multiplies. In the lifecycle of an organisation, it is inevitable that there will be some structural change – anything from a merger to the sale of all or part of your business. In these instances, having access to a trusted advisor that is intimately familiar with your financial health and business aspirations is invaluable.

Any change will also result in intense scrutiny on your financial records going back a number of years, so having a partner involved from early stages will help keep your accounting department organised and compliant.


Risk Mitigation And Safeguarding

Adding a degree of separation between yourself and the flow of money in your business is an essential risk mitigation tool. The separation of duties is a key to minimising financial risk within an organisation. Reducing the level of financial responsibility from business owners, or internal staff, decreases the chances of mistakes and fraud.


The Blended Finance Function

A fully outsourced function is not always appropriate for every business. A blended solution can offer similar benefits at a lower cost that works seamlessly with your existing teams.

There are many scenarios where a blended solution might be preferable.

For example, you could have a long-standing employee with a deep understanding of the ins and outs of your business, but they do not have the capacity or knowledge to keep up with the growing demands of your business.

Alternatively, your team might need to increase their short-term capacity or skill level at certain times of the year, such as year-end, commission payment periods or for the preparation of key lodgments and statements.


Is An Outsourced or Blended Team Right For You?

Our team of Chartered Accountants at Sovereign Private believe that industry and technical experience is the most important weapon when assessing your accounting and finance function. When it comes to the important decision of choosing an outsource partner, it should not be made without the appropriate due diligence.

That’s why we offer a complimentary, no obligation finance function review. We will present our recommendations, and detail how we can partner with you to benefit your business. For more information or to book a consultation, please get in touch at 02 9227 9002 or via email on info@sovereignprivate.com.au.