What support does my business need?
Outsourced finance team
An outsourced finance team is a firm that runs some or all of your finance work from outside the business, instead of you employing finance staff.
The short answer
An outsourced finance team is a firm that does your finance work as a service. Depending on the firm and the package, that can mean bookkeeping, payroll, management accounts, a financial controller and a part-time finance director, all from one provider. We have not found a fixed definition: one firm's 'outsourced finance team' may be another firm's bookkeeping plus monthly figures. Check exactly what each package includes and who does the work.
What checking a provider involves
Because firms use the term in different ways, the useful first step is to pin down what you would get. Work through these with any provider:
- List the work. Which of bookkeeping, payroll, VAT, month-end, management accounts, forecasts, year-end accounts and tax are included, and which cost extra?
- Find out who does it. Who are the named people, what are their roles and qualifications, and how much of their time is yours?
- Agree the timetable. When do you get monthly figures after the month ends, and how often do you meet?
- Check access and control. Who can approve payments, who holds the logins, and do you keep access to your own software and records?
- Read the exit terms. What is the notice period, and how are records and logins handed back if you leave?
- Ask about supervision and insurance. If the firm provides accountancy or bookkeeping services, who supervises it for money laundering purposes, and does it hold professional indemnity insurance?
What it can cover
Providers put together different levels of help. As a rough picture, from the day-to-day up to senior support:
| Level | What it covers |
|---|---|
| Bookkeeping | Recording sales and costs, matching the bank, paying suppliers, payroll |
| Management accounts | Monthly or quarterly figures, budgets and analysis |
| Financial controller | Month-end, financial controls and approvals, checking the bookkeeping |
| Finance director | Forecasts, funding, board reporting and finance decisions, part-time |
Some providers also prepare year-end accounts and tax returns. Others leave that to your existing accountant.
How it differs from a traditional accountant
The line is blurred. Some accountancy firms offer all of the above and call it an outsourced finance service. The difference is mainly one of depth: an outsourced finance team aims to run your finance function week to week, while some accountants focus on the year-end accounts and tax and see you a few times a year.
Who it may suit
- Businesses that need more than an accountant but aren't ready to employ finance staff.
- Businesses where one in-house bookkeeper or finance person is a single point of failure.
- Owners who want bookkeeping, monthly figures and senior advice from one place.
What it costs
We have not found a reliable published source for what outsourced finance teams charge in the UK, so we do not give a figure. Prices depend on what is included and how many hours or days of each level of support you get. Ask for a written breakdown by service.
Questions to ask before you sign up
- Exactly what is included each month, and what is charged extra?
- Who will work on our account, and will that stay the same?
- How quickly after month-end will we get our figures?
- Who can approve payments from our bank account?
- How will you work with our current accountant, if we keep them?
- What is the notice period, and how do we leave?
When a smaller step may be enough
If what you are missing is up-to-date records, a bookkeeper may be enough. If you need regular figures, your current accountant may be able to provide management accounts. An outsourced team may make sense when you need several of these levels at once.