Six Reasons to Evaluate and Upgrade Your Finance Team
In today's fast-paced business environment, making informed financial decisions is crucial for success. Many companies grapple with the decision of whether to employ an in-house finance team or to partner with a specialised provider. Let's delve into the costs and risks associated with these choices and explore how partnering with a Virtual Finance Director can be a game-changer for your business.
The Cost of Employing an In-House Finance Team
Hiring an in-house finance team might seem like a straightforward solution, but it comes with significant costs. Salaries for experienced finance professionals can be substantial, and when you factor in benefits, training, and overheads, the expenses quickly add up. Additionally, the recruitment process itself can be time-consuming and costly, with recruiters sometimes charging a fee of 30% of the salary!
A small company could easily invest upwards of £100k per annum for a fully functioning finance team. It can be challenging to get the right blend of skills and experience doing the right pieces of work. Moreover, there are hidden costs such as office space, equipment, and ongoing professional development. These expenses can strain your budget and divert resources from other critical areas of your business.
Typically, our outsourced bookkeeping services and finance and accounting outsourcing solutions are a fraction of this cost and are a fantastic solution for businesses with a lean business model.
Having an in-house team means that the finance knowledge and experience available to you will be limited to that of your in-house team. The Smart Team can give you access to all the skills you might need on a fractional basis, and although we may not be sitting at the next desk in real life, we are right with you virtually; The Smart Team takes pride in being super responsive to its client’s needs.
“We feel prioritised. They do whatever it takes and have made us feel like we are their only clients”
The Risk of Continuing with Your Current Solution
All businesses should from time to time evaluate the performance of its finance function; is it efficient, responsive, up-to-date and cost-effective? Sticking with your current financial solution, especially if it is outdated or inefficient, poses several risks. Inaccurate financial data can lead to poor decision-making, which can have long-term negative impacts on your business. Additionally, without the right financial expertise, you might miss out on opportunities for growth and optimisation. From payroll, expenses and outsourced bookkeeping services to reporting, analysis, and process optimisation, The Smart Team constantly evaluates relevant software and other solutions available across the spectrum of finance and business support to recommend the best solution for YOUR business, so you don’t have to.
Continuing with a subpar solution can also expose your business to compliance risks. Regulatory requirements are constantly evolving, and failing to stay compliant can result in hefty fines and legal issues. The lack of timely and accurate financial reporting can also erode stakeholder confidence, affecting your company's reputation and market position.
The Risk of Not Having Up-to-Date Management Information
Timely and accurate management information is essential for making strategic decisions. Without it, you might be operating in the dark, unable to respond swiftly to market changes or internal challenges. The cost of not having up-to-date information can manifest in missed opportunities, inefficient operations, and ultimately, reduced profitability.
For example, if you don't have real-time insights into your cash flow, you might face liquidity issues that could have been avoided. Similarly, without accurate financial forecasts, you might overestimate or underestimate your budget, leading to either overspending or missed investment opportunities.
The Intangible Cost of Time and Energy Spent on Financial Management
Managing your finances in-house requires a significant investment of time and energy. Business owners and managers often find themselves bogged down with bookkeeping, financial reporting, and compliance tasks. This not only diverts their attention from core business activities but also adds to their stress and workload.
Consider the hours spent reconciling accounts, preparing financial statements, and ensuring compliance with tax regulations. These tasks can be overwhelming, especially for small business owners who wear multiple hats. The time and energy spent on financial management could be better utilized in driving growth and innovation.
The Risk of Not Getting the Right Financial Leadership Advice
Having access to expert financial leadership is invaluable. A commercially experienced Fractional Finance Director brings a wealth of knowledge and expertise that junior team members are unlikely to possess. Without it, you might miss out on strategic insights that could propel your business forward.
The right financial advice can help you identify and mitigate risks, optimise financial performance, streamline your operations, identify inefficiencies and growth opportunities, and help you to ensure you have enough funds to navigate your business to its next stage.
The cost of not having this guidance can be substantial. Poor financial decisions can lead to cash flow issues, lost revenue, increased expenses, and missed opportunities.
The Traditional Accountant Option
While traditional accountants focus primarily on historical compliance, ensuring that your past financial activities are accurately reported and in line with regulations, our commercial focus is on the financial health of your business both now and into the future. Of course, we also cover all the compliance, but for us, that’s getting the basics right before we start to add the value.
The difference in our approach is profound. Rather than merely reporting what has happened, we actively work with you to shape what will happen, steering your business towards a successful future. With a commercially experienced Virtual Finance Director on a fractional basis, you gain access to a wealth of knowledge that can propel your business forward, mitigate risks, and unlock opportunities that might otherwise be missed.
We invite you to give our offering serious consideration. Discover how our focus on strategic financial leadership on a fractional basis can transform your business. Take a look at our website www.thesmartteam.co.uk and get in touch with us today to learn more about our services and pricing. Your business deserves the best financial guidance to thrive now and in the future.
