The benefits of outsourcing accountancy services for SMEs

3rd April 2024

In recent times, has there been a more interesting, dynamic and challenging time to be a Small and Medium-sized enterprise (SME) in the UK?

SMEs face a myriad of challenges; the macro-economic environment is volatile and unpredictable; inflation is reducing but remains well above normal levels and interest rates have remained stagnant at 5.25% following the latest meeting of the Bank of England. The cost of borrowing for business remains high. Continued globalisation creates opportunities but SMEs are often competing with larger corporates that benefit from economies of scale, operational efficiency, better technology and a reduced regulatory burden (relatively speaking). Technology is evolving at a pace not seen since the industrial revolution, with everyone clambering to get grips with the inevitable impact of Artificial Intelligence (AI).

This is all on top of managing day-to-day operations and somehow strategising for long-term growth.

Amongst all of these challenges, efficient financial management remains a critical pillar for success. This is where outsourcing your finance and accounting function can support your business, offering several advantages that can significantly bolster the growth and efficiency of your organisation, as well as giving you one less thing to worry about!

Cost efficiency: One of the most compelling reasons for SMEs to outsource their accountancy services is cost efficiency. Hiring a full-time, in-house accountant or accounting team can be financially burdensome for small businesses due to salaries, benefits, sickness and training costs. Outsourcing can eliminate these overheads, allowing businesses to pay only for the services they need, when they need them.

Quick access to expertise: Outsourcing your accounting function also gives SMEs access to a pool of experts who possess a broad range of knowledge and experience. These professionals stay abreast of the latest financial regulations, tax laws, and accounting technologies, ensuring that your business’ financial matters are handled professionally. This level of expertise might be difficult and costly for SMEs to attain and retain in-house.

Focus on your core business activities: By delegating financial operations to external specialists, business owners can reallocate their time and resources towards core activities that drive revenue and growth. This strategic focus is essential for staying competitive in today’s fast-paced market. Outsourcing can therefore act as a springboard for growth, enabling SMEs to concentrate on customer service, and what they do best.

Scalability: Outsourcing offers flexibility and scalability to SMEs. As your business grows, your financial management needs will become more complex. An outsourced accountancy service can easily adjust the level of support to match your business’s growth trajectory, providing more resources when needed without the hassle of hiring additional in-house staff.

Enhanced financial reporting and analysis through technology: Accounting firms have access to advanced software and tools to provide detailed financial reports and analysis. These insights are crucial for making informed business decisions and can give SMEs a competitive edge. High-quality data helps in identifying trends, managing cash flow more effectively, and pinpointing potential areas for cost savings.

This access to the latest accounting technologies and software provides SMEs access to expertise and knowledge which might be cost-prohibitive for SMEs to purchase and implement. These advanced tools offer efficiencies in processes like invoicing, payroll, and tax preparation, providing SMEs with the benefits of modern technology without the direct investment.

Risk mitigation: Compliance with tax laws and financial regulations can be a daunting task, especially with constant changes in legislation. Mistakes in financial reporting can lead to penalties and legal issues. An outsourced accounting team will specialise in tax compliance, greatly reducing the risk of financial inaccuracies and non-compliance. Their expertise ensures that financial reporting is accurate and up to date, mitigating the risk of legal complications.

How can we help?

As seen, the benefits of using an outsourced accounting team can provide numerous benefits. It’s not just a strategy for financial management, it can also be used a platform for growth and efficiency. From cost savings and access to expertise, to enhanced focus on core business activities and risk mitigation, the benefits are substantial. At a time when agility and strategic focus are paramount for businesses, outsourcing emerges as a prudent choice for SMEs aiming to carve a niche in the competitive business landscape.

Our Outsourcing team is expertly positioned to support your business’ growth, working with you collaboratively to meet your strategic goals whilst maintaining business continuity. For more information on how we can help, contact Elena Ramkalawon, Partner and Head of Outsourcing, or Dominic Noakes, Director.

Awards and Accreditations

Accounting Excellence Large Firm of the Year 2023
eprivateclient top accountancy firm 2023

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