How Outsourcing Can Improve Your Business

From networking to marketing, accounting to sales, setting up a modern business means having to take on a lot of day to day business functions outside of your field of expertise. For a lot of small businesses this can actually limit growth at best, at worse cause enough of a distraction that your core service suffers. This is why so many businesses outsource various functions and chief amongst these is accounting.

In this article, I want to look at the advantages outsourcing the financial side of your business to a qualified accountant can bring in terms of flexibility, security and growth. We’ll start though by looking in more detail at some of the specific tasks and functions an accountancy firm can provide to your business.

How outsourcing can improve your business

What can my Business Outsource?

Accountants are often associated with bookkeeping and end of year accounts and little else. But that’s really only the tip of the iceberg when it comes to what a good accountancy firm can offer your business. Below we’ve listed some of the core roles an accountant can look after on behalf of your business.

  • Year End Accounts: All businesses need to submit end of year accounts to HMRC, whether that’s self-assessment for sole traders or statutory accounts for limited companies. Not only does this take time but it also requires a degree of financial understanding that many business owners or directors just don’t have. 
  • Registering your business: All limited companies must be registered with Companies House. An accountant will help you do this incorporating your business and ensuring the paperwork is completed properly, including the company register and articles of association.
  • Outsourcing your payroll: There are huge advantages to be offered from outsourcing your payroll. Accountancy firms will be able to administer and run this service using their own in-house payroll software to process wages and pay your staff on time every week or month. They’ll also make sure all HMRC guidelines around payroll are met and online declarations are made on time.
  • Financial advice: Whether you need advice applying for a business loan or how to minimise your tax bill, your accountant will be able to consult with you on all manner of financial issues relating to your business, including making profit projections and assessing the financial impact of big purchases or acquisitions.

Outsource your accounting needs

The Benefits of Outsourcing Financial Functions

  • Freeing up resources: By outsourcing you are able to free up vital resources that you can direct towards more profitable business functions. This includes finance staff expertise, as well as software and maintenance savings. Some accountancy firms will provide information management and reporting services with services like payroll, creating previously unforeseen efficiencies resulting from more accurate management information.
  • Compliance: Even a simple mistake can cause problems if it’s picked up by HMRC at a later date. Having an accountant takes the strain out of doing this every year and ensures your accounts are completed properly every year with no mistakes. There are a lot of statutory requirements for VAT and PAYE/NI and rules can change periodically, which means your staff having to stay on top of it. This as an accountant’s bread and butter however. 
  • The ability to scale: One of the truly great advantages of outsourcing essential finance functions like payroll to an accountancy firm is the flexibility it gives you to scale your business. With increased business activity comes need for new staff, new systems and new capacity but this can all be handled in-house by your accountancy firm, which has the economies of scale to deal with any sudden increase in workload.
  • Fixed monthly costs: There’s lot to be said for predictability when it comes to business income and outgoings. Having an accountant will give you a fixed monthly cost, meaning clearer understanding of overheads.
  • Minimising your tax bill: Minimising your tax bill doesn’t mean signing up to some dubious offshore tax avoidance scheme. All accountants will be able to find perfectly legitimate ways of shaving pounds off your tax bill, whether that’s through expenses you aren’t claiming or carrying forward losses.
  • Staffing cost savings: Many small businesses will take on a single bookkeeper or accountant to deal with all their end of year accountings and payroll. This makes your business very vulnerable if this person were to be taken ill or leave the company for any reason. By outsourcing staff, staff retention and training costs in these vital business areas are a thing of the past. This allows you to take on extra staff without increasing the workload on your payroll staff.
  • Reduced operational risks: Outsourcing drastically reduces your operational risks in areas around IT and software maintenance. Having your essential financial data marshalled and managed by your accountant, removes the risk of critical data loss due to a security breach or a natural event like flooding. You accountancy firm therefore form a core part of your business continuity and disaster recovery plan.