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Saturday, May 18, 2024

Should UK firms outsource their financial management?

The UK has thousands of financial adviser firms that can help firms of all sizes and types with their financial management needs. But just because they’re available doesn’t necessarily mean they’re the right fit – after all, hiring a financial expert you trust can take time, and the services themselves can come with expensive fees. That being the case, should firms outsource their financial management?

In this article, the pros and cons of outsourcing will be explored to help you make an informed decision for your firm’s needs and goals.

Pros of outsourcing financial management

Outsourcing your finances as a firm, whether you operate as a sole trader or have a team working for you, can have several benefits for your overall operations and general peace of mind as a business owner. Let’s examine how outsourced financial management can positively impact your firm’s operations.

Cost savings

Cost savings is one of the most notable benefits of outsourcing your financial tasks, particularly if you’re weighing between hiring an in-house accountant and financial advisor or getting an outside person or company to do it for you.

When it comes to hiring in-house, you’ll have to consider the fact that you’ll also face the costs of taking on an employee. The costs of this can add up quickly as they can encompass more than just an employee’s salary. They will also include employee benefits, training, office space, equipment (like a computer), software, and the time and money required to find the right person to hire.

By hiring a firm or independent accountant, you can avoid these additional costs and only pay for the work being done, which may feel like a high upfront cost but is actually significantly cheaper than hiring an employee when you add up all the numbers.

Time savings

When you’re a professional service provider, focusing on your skill set and clients should be your top priority. Taking care of your firm’s finances or managing its operations in-house can get in the way of your ability to do that, as both require your valuable time and energy to ensure they’re done and done correctly.

By hiring another company to do this for you, you can have peace of mind knowing the job is getting done without having to manage it.

Financial expertise

While it’s possible to take on your financial needs by yourself, when you outsource to a reputable provider, you can benefit from their financial expertise and experience. This means you can feel assured that financial tasks, from bookkeeping and tax filing to financial reporting and forecasting, are being done accurately.

On top of this, with these tasks being a financial manager’s area of expertise, they’ll also have the skill set and knowledge to carry them out efficiently while being aware of changing regulations and opportunities for savings you may not be able to keep up with or be aware of on your own.

These skills can help optimise your firm’s cash flow to improve your bottom line.

Room for growth

Financial needs fluctuate and change from month to month and over time as a business grows. Outsourcing financial management allows you to have more or less support as you need it, unlike having an on-staff team, which needs to be financially supported even during slow periods.

An independent financial manager can also help you plan for growth by setting up processes that support your firm’s long-term goals and can expand their services as you need them.

Cons of outsourcing financial management

While there are many benefits to outsourcing your firm’s financial management, there are also a few concerns to be aware of.

Finding reliable management

Finding a reliable financial manager or financial management firm can be a time-consuming process, with many details you need to be aware of and consider. You’ll want to know their education and certifications, level of experience, reputation, scope of service, how to evaluate a contract or service agreement, and even more details about a financial firm and the services they offer. Because of this, it can take up a great deal of time and be a stress-inducing process.

Loss of control

One benefit of keeping your financial operations in-house is that you can keep an eye on overall operations and enjoy the feeling of having more control over how the work is being completed. When it comes to hiring an outside firm, you may get control over which firm you hire, but after this, your control is limited. This is why finding a reliable financial service provider and having a carefully crafted service agreement is important.

Work culture

If you have an established finance department for your firm, deciding to restructure to outsourcing these services can hugely impact your firm’s work culture. It means you’ll likely have to let go of an employee or multiple employees, which can create tension and an uncomfortable situation for everyone involved.

In addition to this tension and discomfort, significant changes, particularly those that impact job security, alter the workplace landscape and the confidence other employees have in the organisation.

Before making a substantial change like this to save money, consider the negative impacts of affecting your firm’s work culture, as it’s more than just productivity and worker satisfaction that can be harmed.


While outsourcing financial management may initially feel unattainable or as if you have to rely on the chance of winning money to grow your business, it can save you money and be more efficient than taking on tasks yourself or keeping them in-house. Of course, whether it’s the best choice for your firm will depend on various factors, so it’s best to carefully evaluate all the pros and cons and the unique nature of your firm before making a decision.



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