External Finance Department

Posted by ashleyphillips - August 21, 2020 2:33 pm External Finance Department

Highlight on services – External Finance Department

If the sudden and unexpected emergence of Covid-19 has shown us anything, it is that businesses need to be adaptable and having the flexibility over how and when work is performed is vital. The ability to be able to increase or scale back the work being performed is really important. As shown by widespread use of the Coronavirus Job Retention Scheme (CJRS), the biggest expenditure risk to UK businesses overall comes in the form of committed salary costs. Apart from industries where zero hours contracts are common, the ability of businesses to quickly scale up or scale down their workforce is something that they just do not have the option with as employers.

Tough decisions

Knowing when to take on an additional employee, or unfortunately more recently for many businesses, to look to make an existing employee redundant, can be one of the toughest decisions a business owner can have to make, especially when a business is in relative infancy or experiencing a period of growth or decline.

Often management have to carefully consider and balance a changing workload and the income that brings with the staff resource and expenditure required to manage that workload.

One area that businesses are making greater use of is outsourcing, removing committed costs and replacing them with variable ones that can easily be upscaled, downscaled or, removed with limited or no notice required. Creating a lean employee structure gives those businesses greater flexibility and often an economic edge over some of their competitors.

In recent years, we have seen a large increase in clients wanting the provision of services, which come under the classification of ‘business services’. These are services, which traditionally have been covered by internal finance functions and includes areas such as bookkeeping services, VAT compliance, management accounts, payroll services, credit control services, BACS approved bureau services, budgets and forecasts as well as implementation of accounting systems.

For a number of clients we are their finance function. However, some businesses are starting to take this a stage further and outsourcing all elements of the finance role.

Higher Level Expertise

This is particularly useful for businesses going through a growth phase, where higher level financial expertise is required but not at the level where a full-time staffing position is justifiable. Or, where a position is required but the type of work required means you would be paying for an expensive individual to deal with lower level work at certain times. Outsourcing this work means that you can pay for that level of expertise on the items and at the times when you require it, but are not committed to it when you do not.

This is particularly useful for businesses going through a growth phase, where Finance Director expertise is required but not at the level where a full-time staffing position is justifiable. Or, where a position is required but the type of work required means you would be paying for an expensive individual to deal with lower level work at certain times. Outsourcing the Finance Director role means that you can pay for that level of expertise on the items and at the times when you require it, but are not committed to it when you do not.

This also gives greater flexibility in recruitment where a candidate may be highly suited to the role but does not quite have the experience or expertise to take it to a strategic level.

Alternatively, you may just need cover for a temporary period, such as maternity/paternity leave cover, furlough leave, annual leave or to provide cover for illness.

We act as external finance department for a number of clients and every situation is different. Our services can be tailored to your exact needs and by having staff at various levels and with different expertise; we can ensure you get the right person doing the work at the right cost. In addition, by making use of technology, as many businesses have been required to do during the pandemic, travelling time and associated costs can be reduced or even eliminated.

Our external Finance Department services can include:

  • Attendance at Board meetings
  • Financial assessment of contracts, customers and suppliers
  • Liaising with auditors
  • Detailed financial elements of business plans
  • Managing relationships with external business stakeholders
  • Management of working capital
  • Strategic financial advisory
  • Design and implementation of financial processes and procedures, including financial authorisation limits
  • Training and mentoring of finance staff

If you believe that any of our business service functions would be of use in your business then please don’t hesitate to contact your local McCabe Ford Williams office.