Rapidly Rising Costs Reinforce the Benefits of Using a Virtual Finance Department

Benefits of Virtual Finance Department

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With inflation hitting businesses hard, companies need to find ways to reduce their workload and maximise profitability. A Virtual Finance Department can help, says GroForth’s PAUL MURPHY.

 

It’s an unfortunate fact that as companies develop, the pressures on business owners multiply. Most eventually need support to keep on top of routine administration and compliance.

Accounts is a good example of a time-consuming area where reliable support can free up management for activities that add more value to the business. However, hiring qualified accounts staff is not easy. Any business owners will tell you that finding the right person is a slow process. You then have to provide equipment and resources, pay a salary, train, manage and motivate your employee and hope that they remain with you so that you don’t have to repeat the hiring exercise again too soon.

A Virtual Finance Department can be cost-effective way to get around these difficulties and avoid the burdens that come with finding and employing your own accounts staff. Various studies suggest that around a third of businesses outsource their accounts and a significant proportion find that using a Virtual Finance Department helps to increase their profitability.

 

 

What is a Virtual Finance Department?

A Virtual Finance Department is an outsourced service provider delivering a range of accounting supports for companies who either do not have the resources to employ an in-house financial controller or who need to access additional finance services.

 

 

Examples Virtual Finance Department services:

 

Here at GroForth, our Virtual Finance Department also provides tailored support for accounting firms who need to access additional resources during busy periods and/or throughout the year.

Benefits of using a Virtual Finance Department

A big advantage of using a Virtual Finance Department is that you get the accounts services you need without having to have an in-house finance team. So, as well as saving on the expense of employing accounts staff, you also avoid the employer’s burden of having to comply with the complexities of employment legislation.

Another advantage is that Virtual Finance Departments use various cloud-based technologies which means they can provide you with realtime information to help you run your business more effectively. However, to get the most from this, you need to ensure you give the Virtual Finance Department the data they need from you on a timely basis. (See our article on realtime accounting information)

Depending on your stage of development, another important advantage is that a Virtual Finance Department allows you to access additional resources when you need them. While you might just need management accounts, payroll or bookkeeping support in the early stages, your needs tend to become more complex as time goes on. Accurate financial information and forecasts are crucial, not just for your own day-to-day decision-making, but also for your lenders and investors who usually want to see several years of business accounts when assessing a funding application.

 

What you need to consider when selecting a Virtual Finance Department

 

Errors and omissions in your accounts information can land your business in trouble with Revenue and/or other regulators so it is important to ensure that your Virtual Finance Department has the necessary skills and resources to provide reliable, accurate services. Examples of some things to check before deciding on a service provider include:

 

  • Check the qualifications of the team that will be working on your accounts, payroll and credit control
  • Ensure that the Virtual Finance Department has processes in place to keep up to date with relevant tax, employment and AML requirements.
  • Check that there will be staff available to cover if the person who usually looks after your services is on leave or absent through illness.
  • Verify that the Virtual Finance Department uses industry-standard software and provides a confidential and secure service.

 

Timing considerations when switching to a Virtual Finance Department

The last quarter of the year is a good time to assess your existing Finance Department and/or your requirement for additional or alternative accounts/finance services. Keep in mind that it takes time to research potential service providers and that if you intend to switch to a Virtual Finance Department it’s important to have a robust business case underpinning your decision.

Regardless of whether you want to outsource individual functions like management accounts, payroll, Bookkeeping or credit control, or intend to fully outsource your Financial Department, the best time to make the change is usually the start of the year.

 

GroForth Virtual Finance Department Services

GroForth provides a comprehensive suite of Virtual Finance Department services that can be customised to suit your individual requirements. Our team is fully qualified and based in Ireland so you don’t have to worry about time zones, language difficulties or regulatory differences when you rely on us for your support. To find out more about our Virtual Finance Department, please get in touch.

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