In short- yes! You absolutely should outsource your back office function, but just saying “yes you should” without giving you some reasons wouldn’t make for a very good blog would it!
So; when, why and how should you outsource your back office function? Are there times when you shouldn’t outsource and what, if any, are the benefits of outsourcing?
We’re not going to sit here and ramble on a load of old rubbish to get you to buy from us but, we genuinely think all our current and prospective clients, should have an honest and open view of what they truly do and (more importantly) don’t need when it comes to managing their back office and accounts function.
With that in mind, here are a few reasons that it makes sense to outsource your back office function:
Save yourself some money!
Believe it or not, outsourcing your back office function can and (absolutely should) save you money. Aside from the fact you won’t need to invest in quite as many bits of software, you will also cut employee costs as you won’t need to hire as many (if any), members of staff to manage your back office.
In addition, outsourcing your back office will minimise the risks of errors which could lead to hefty HMRC fines or financial mistakes. Your accountant is there to make sure things run smoothly and you don’t fall into any, potentially disastrous, financial traps.
We take the time, so you don’t have to
We all know that time is money when it comes to business, so why waste time managing your own back office when you’ve got more important things to worry about.
Outsourcing your back office function takes away a big chunk of administrative time, leaving you free to do what you do best…. grow your business. It also means you don’t have to spend time hiring and training teams – bonus!
We’re no gymnasts but we’re damn flexible!
Having your own internal back office team means fixed costs for your business and it can mean reduced profits, particularly if you’re a recruitment agency or transactional type business. As your income fluctuates, having a fixed internal team means you can’t be flexible and reduce your own costs when you need to.
This is where having an outsourced back office team can be of huge benefit. With fluctuating income, you can easily increase or reduce the support you receive, meaning your profit margins are more stable and you don’t have to worry about paying wages.
Access to the experts!
Google might be your best friend at the pub quiz but, when it comes to your business finances it’s a much safer bet to speak to the experts directly. When you outsource your back office function, that advice and guidance is on tap, as and when you need it.
Make better decisions; faster.
As your business grows, so does the impact of your decision making. Making decisions about your business can be difficult at the best of times, let alone trying to do it without sound financial information.
With an outsourced back office function, you have access to up-to-date financial reports and access to the experts that can support you with the financial aspects of your decision making, so you won’t have to take as many risks and you’ll be able to make decisions faster.
Now you have some of the key benefits, when exactly should you think about outsourcing? We advise that business outsource their back office as early on as they possible can to make sure they are done correctly from the get-go.
But, that doesn’t mean you have to outsource everything! Starting with just your end of year back office and your payroll function is a good start, you can then move additional functions over as you grow.
Here are a couple of key milestones to help you decide when to fully outsource your back office function:
You Employ up to ten people or more
You’ve reached £500,000 in revenue
You can no longer be involved in every aspect of the business
You have entered or are looking to enter an accelerated growth period
You need more sophisticated financial reports for decision making
As you hit each of these milestones, it is worth checking in with your accountant for support and using their expertise to grow your business in a sustainable way.
Still looking for a reliable, outsourced accountant for your business? Book in with us for a FREE 15-minute consultation.