When should you outsource your agency’s finance function?

When should you outsource your agency’s finance function?

By Pamela Phillips.

What would happen in your agency if your financial controller or bookkeeper gives you their notice?

When you’re dependent on just one person to run so many of your financial activities it can leave you feeling more than a little exposed.

This is something that many agency owners worry about and it’s exactly what happened to Cascade Communications when their long-standing financial controller handed in her notice to move back to New Zealand.

Recruiting for a new in-house accountant was always going to be a huge challenge for the MD. How could she replace someone so embedded in her business and with such a deep understanding of how things work? And who would be the right person to fill the role? Should she hire a senior financial strategist to help her grow her business profitably and sustainably or a more junior controller to keep the day-to-day processes running smoothly?

As it turned out, the answer was neither. Instead, Cascade chose to outsource their full finance function to us at de Jong Phillips.

What is an outsourced finance function?

An outsourced finance function can vary in scope, from covering the day-to-day financial processes in your agency all the way through to providing insights and helping you build the agency that you want to own. Basically everything you would expect a regular in-house finance team to do.

A full finance function is multi-layered and includes:

  • Technicians to do the bookkeeping, file VAT returns, run payroll, make payments, and send sales invoices to customers.
  • Financial controllers to prepare management reports and budgets, run cash flow forecasts, and prepare annual accounts
  • A Finance Director to help guide the strategy of your business, build a robust finance function and work with you to identify growth opportunities to increase the value of your agency.

What are the benefits of outsourcing your finance function?

One of the biggest advantages of outsourcing your finance function is that your finance team can easily scale up or down as you need it. It can grow as your business grows and, if your sales do decrease, then you can reduce the services that you get so that your accounting costs stay at a level appropriate for your business.

Another huge benefit from outsourcing your finance function is that you get access to all the up-to-date financial and technological skills that you need, without the cost of hiring, training, and managing staff. 

You get the peace of mind that you’re adequately covering all your financial responsibilities whilst also getting the freedom to focus on growing your business.

By using a multi-layered team you get more than one set of eyes looking at the numbers and can introduce segregation of duties to reduce risk in your business.

And finally, it will cost you less to take on an outsourced finance function than to build a full finance team in-house.

So when’s the right time to outsource your finance function?

Here are some factors that could mean outsourcing your finance function is the right choice for your agency.

  1. Are you lacking timely or insightful reporting?
  2. Are you spending too much of your own time involved in the day-to-day finances of your agency doing things like paying suppliers or managing the expense process?
  3. Are you out of touch with the latest technological developments that could make your agency more efficient and profitable?
  4. Is your agency growing quickly?
  5. Have you had high staff turnover within the accounting team?
  6. Is your agency not yet in a position where it can afford to hire a full finance team internally?

Are you ready to strengthen your finance function?

If you would like to speak to us to find out how we can become your outsourced finance function for your agency, get in touch to book a 15-minute discovery session with one of our team.

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