Typically, business owners become aware that they need additional financial management resources when backlogs start to build up. Delays in raising invoices can lead to late payments and cashflow problems while late filing of data with Revenue can result in penalties and fines. Outsourcing your financial management can be a good way to keep on top of administration and avoid these problems, explains Sarah Daly.
Previously on this blog, we explained some of the reasons why businesses consider outsourcing. Finance department tasks such as accounts receivable, accounts payable and management reporting are among the processes most often outsourced when businesses are growing. When thinking about outsourcing, here are five key questions to consider:
- Organisation. What stage of development is your business at? Are you expanding? Entering new markets? Investing? Implementing change? If day-to-day administration is taking up too much of your time each day, outsourcing could relieve the pressure and allow you to focus on more productive activities.
- Personnel. Do you have adequate staff available in-house to manage your company’s accounts? Are you confident that your staff’s knowledge is up to date and that they have the relevant skills to produce, and interpret, the financial information you need to develop your business. Having access to up-to-date, accurate financial information is vital but it can be difficult to stay up to date in periods of rapid growth or change. If you are struggling to produce timely, relevant information — or if you have difficulty understanding how to use financial information to improve your business performance — outsourcing could be a good option.
- Functions. A good question to ask outsourcing service providers like GroForth is, “What accounts functions are typically outsourced by businesses similar to mine?’ For example, if accounts payable is outsourced, the outsourced finance department will usually manage processes like data capture, processing invoices, and payments disbursement.
- Data security. This is an extremely important consideration for all businesses as breaches of data privacy can lead to substantial fines as well as repetitional damage for your business. When considering outsourcing, remember to satisfy yourself on the security aspects of how — and where — your data will be stored, processed and kept secure.
control. Because of the critical importance of financial
information, you also need to satisfy yourself that the outsourcing service
provider you choose has appropriate controls in place both to deliver the level
of service that you
rrequire and to protect your business.
If you are thinking about outsourcing your finance department and would like more information about GroForth’s services, please get in touch.