Financial Outsourcing

Financial Outsourcing for Charities and Not-for-Profit organisations

Financial outsourcing for charities and not-for-profit organisations

At AccountsPro we frequently speak with charity CEOs and Executive Directors who have already outsourced some of their day-to-day duties like graphic design, website development, marketing, and PR in order to maximize impact while delivering cost efficiencies.

A significant number of these leaders are also looking to explore the possibility of outsourcing their finance function. Often this question comes at the cusp when an organisation is carrying out a wider review of the efficiency and effectiveness of their support functions.

What’s driving this interest is largely to do with improvements in technology and the requirements of many charities to focus their resources on their frontline services and generally do ‘more for less’. There is also an increase in confidence and acceptance of remote working, which has, to some extent, quelled some of the scepticism around whether financial outsourcing can be a viable alternative to an in-house team.

Financial outsourcing delivers numerous cost efficiencies, and also to allow for better and faster access to finance data for day-to-day decision making by leadership teams and trustees. Some of the most commonly outsourced functions include bookkeeping, management accounts, payroll, Charity Commission reporting, grant reporting, and board reports.

In this article, we will explore the benefits of financial outsourcing in the charity sector. We will also provide guidance on when outsourcing should not be considered.

 

What are the benefits of financial outsourcing for charities and not-for-profit organisations?

Outsourcing, offers organisations the opportunity to ‘buy’ only the resources they need. This is particularly attractive for example in regard to payroll services, where organisations may have only a single employee who is able to run the monthly payroll. In most cases, outsourcing will reduce an organisation’s overhead costs. This is because multiple functions such as payroll can be run at a fraction of the cost of hiring a permanent onsite team.

If we come back to our example of the employee who is responsible for running the monthly payroll. If there is no one else that can perform the function when he becomes ill, then this will reduce the continuity of service. This also leaves the organisation to be exposed to unnecessary risks and threats as a result of tasks such as payroll and other financial functions not being performed in a timely manner. By outsourcing these services, the contracting company can mitigate these risks and enable complete continuity of service.

In recent years the charity sector has seen a backlash for the lack of transparency, particularly when it comes to submitting annual audits and accounts. With charity pressures growing, CEOs and trustees are turning to outsourcing as a way to improve the quality and reliability of their accounts. From our own experiences, having a fresh pair of eyes that is looking at the organisation from the outside is both hugely valuable and beneficial. This is especially true for firms that are looking to increase their transparency and accountability to donors and service users of the charity.

Another interesting benefit that comes out from financial outsourcing, is that you will often have a outsource team that have a much broader range of specialist knowledge, experiences and skill sets which can be utilised when needed. For example, when one of our clients needed a specialist who was familiar with the South African tax system. The support they needed was provided by a team member they already worked with, in a related but different capacity.

Outsourcing also helps charities to better utilise their internal staff and increase targeted efforts. By contracting out tasks such as bookkeeping and other financial administration, charities can free up the time of internal staff. This allows them to focus on work that better meets the aims and objectives of the organisation and in turn can work to increase in levels of staff retention. When staff are hampered with tasks, particularly finance tasks which are not core to their role, this is often a reason why someone will start to look elsewhere for an opportunity that is more fulfilling to the core of what they do.

Technology advancements have made outsourcing a more efficient process, allowing secure uploading of documents and data to a secure portal. We have also seen advancements in Optical Character Recognition software that converts invoices into accounting data; and dynamic management reporting that can be structured to the requirements of CEO, senior management and trustees. Both accessibility and portability to data is no longer a stumbling block to financial outsourcing as it once was.

 

When Outsourcing Should Not Be Considered

It should be noted that financial outsourcing is not a one-size-fits-all solution, and it is not necessarily the most effective option for every organisation. The pros and cons of outsourcing should be weighed up by charities, and they must also ensure that outsourcing aligns with their core mission and values. It is also imperative that the charity chooses an outsourcing partner that is reputable and reliable. This will ensure that the charity’s financial management is in the most capable of hands.

When it comes to outsourcing, charities should be aware that if it is not managed properly, it can lead to a loss of control over the process. In this regard, it is essential to set up an effective procedure for outsourcing management from the onset of a contract. This will ensure that control over the contract is maintained.

Charities should also consider the importance of maintaining strong relationships with their donors and stakeholders. If outsourcing may have an impact on these relationships, charities should think twice before proceeding. Finally, outsourcing should not be used as a way to avoid dealing with internal issues. Organisations should address internal problems and create a culture of accountability before considering outsourcing as a solution.

 

Conclusion

Overall, outsourcing can offer many benefits to charities, including cost savings, access to specialist skills, better risk management, and improved transparency and accountability. With the right approach, outsourcing can help charities achieve their mission more efficiently and effectively which enables them to provide better services to their beneficiaries.

We would be more than happy to provide you with further information in relation to our financial outsourcing services for charities, so please feel free to get in touch with us at: hello@accountspro.co.uk or via our contact page:- https://accountspro.co.uk/contact-us/

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    Accounting Business

    HSBC has recently announced that it will acquire the UK operations of Silicon Valley Bank

    HSBC has recently announced that it will acquire the UK operations of Silicon Valley Bank, a move that could have significant implications for the country’s startup ecosystem. Silicon Valley Bank has been a significant investor in UK startups and has provided funding for many successful companies, including Monzo and TransferWise.

    The acquisition will allow HSBC to expand its presence in the UK startup scene and support the growth of innovative businesses. HSBC has stated that it is committed to supporting the country’s tech ecosystem and will continue to provide funding and other resources to startups.

    The move has been welcomed by many in the UK startup community, who see it as a positive development for the country’s tech scene. Many entrepreneurs believe that the acquisition will lead to increased competition and more opportunities for funding, which could help to drive innovation and growth.

    However, some have expressed concern that HSBC’s conservative lending practices could limit the growth of startups. Silicon Valley Bank has been known for its willingness to take risks on early-stage businesses, while HSBC has traditionally been more cautious in its lending.

    Despite these concerns, the acquisition of Silicon Valley Bank’s UK operations by HSBC represents a significant development for the UK startup ecosystem. With the continued support of banks such as HSBC, as well as other investors and sources of funding, the country’s tech scene is poised for continued growth and innovation.

    In conclusion, the acquisition of Silicon Valley Bank’s UK operations by HSBC is a positive development for the country’s startup ecosystem. While there are concerns about the bank’s lending practices, the move is expected to lead to increased competition and more opportunities for funding, which could help to drive innovation and growth in the tech sector. The UK’s vibrant tech ecosystem continues to attract investment from a wide range of sources, and the future looks bright for entrepreneurs and investors alike.

    Sources:

    https://www.theguardian.com/business/2023/mar/13/hsbc-buy-silicon-valley-banks-uk-tech-startups

    https://www.bbc.com/news/business-60700780

    https://www.ft.com/content/ffa0811e-a92c-4d91-bd9c-29f0bc4b4ea6

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      Accounting Events

      Workshop for Charities: Benefits of Cloud Accounting for your Charity on the 8th September (12-1pm) Book Now

      AccountsPro are arranging an online seminar on the Benefits of Cloud Accounting for your Charity on the 8th September (12-1pm).

      The session will be led by Jonathan Levy, Director of AccountsPro and is aimed at small to medium sized charities.

      In this session, you will gain insights into how transforming your accounting and bookkeeping will provide you with the time and tools to drive your charity forward.

      We will talk about:

      • the benefits of the cloud
      • is it hard to move over?
      • what about historic data?
      • event and activity profitability
      • visibility and accessibility of data
      • budgeting/departmental reporting
      • automation and management accounting

      During this session, we will take you through a real case example of charity that has gone through cloud transformation.  

      The session will end with a Q&A, so that you can get your questions answered.

      Event Details:

      Date: 8th September 12-1pm

      Type of Event: Online Seminar

      Click on the Link Below To Book Your Spot. Limited Spaces

      https://www.eventbrite.co.uk/e/workshop-for-charities-the-benefits-of-cloud-accounting-for-your-charity-tickets-410217370197

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        Accounting Branding Events

        Branding and Finance Workshop for Startup Founders:- 17th November (12pm-2:10pm) Book Now

        Branding and Finance Workshop for Startup Founders:- 17th November (12pm-2:10pm) Book Now!(https://www.eventbrite.co.uk/e/branding-and-finance-workshop-for-startup-founders-tickets-163758858153)
        Everything is a priority when you’re a startup founder. You’ll find yourself juggling everything from your business personality to positioning, partnerships, sales, accounting & finance.

        Fundamentals are important for a new business to grow.

        First, you need to have a strong brand. A strong brand is more than a logo, colours and a set of trendy collateral—it’s about ethos, reputation, recognition, social impact, sales and forming an excellent business strategy.

        The other aspect of business success is your business plan, which must include a working financial model and processes in place to ensure that you can focus on running your business. When the business generates revenue and starts to look for funding, there are needs for financial guidance that can steer the business towards securing investment. Once the startup has raised investment, there are needs for an FD or CFO to navigate the finance function in order to help you make an eventual exit.

         

        The Branding and Finance Webinar for Startup Entrepreneurs will cover a wide range of branding and finance tips, and will be divided into four sessions which will cover:

        1. Personal Branding:
        Consumers want to know, like, and trust the personal brand behind a business brand. Your reputation and personal brand are two of your most valuable assets that you can build on. Your personal brand is an important factor in your success. It can help you to become successful on the market and attract more customers.

        2. Accounting 101
        Everything you have ever wanted to know about starting your own company. From incorporation – Do I need a secretary? What share structure should I put in place? – to setting up your first accounts/bookkeeping system. We will also cover – What records do I need to keep and for how long? With an overview on payroll, dividends, tax returns and VAT registration.

        3. Branding for Businesses
        Branding is much more than a logo, colour palette, and related collateral. An effective brand is one that resonates deeply with the ethos of your organisation and your mission, and that delivers reputation, social impact, partnerships, sales and plays a key part in the formation of an excellent business strategy.

        4. Advanced Accounting & Finance for Founders
        Do I need a bookkeeper? When do I need a controller or finance director? What information should I be seeing weekly? How do I know if my financial data is correct? What about looking at the future – is there an easy way to model out cash flow? What additional tax tricks are there that I should know about?

        Our experts on the topic are Jonathan Levy, Director of AccountsPro and Valerie Forgeard, Founder and Director of Stunning Brand in partnership with Startups Magazine.

         

        About AccountsPro

        AccountsPro is a London based firm that provides Accounting, Talent and FD support to startups and scaleups. Founded by Jonathan Levy, who has worked in entrepreneurial startups and professional practice. The firm provides accounting support and also specialise in building financial models, R&D tax credits, preparing startups for investment, through to FD support and international expansion. They also help their clients find interim and permanent talent to launch or scale their business. For more information on AccountsPro’s services, please visit accountspro.co.uk

        About Stunning Brand

        Stunning Brand brings 32 years of experience in broadcasting, social media, stakeholder engagement, community building, public speaking and negotiation to the private, non-profit and public sectors in unique services that help leaders, entrepreneurs and companies raise their profile and their impact. For more information on Stunning Brand’s services, please visit stunningbrand.com

        Book your place on the Branding and Finance workshop here: https://www.eventbrite.co.uk/e/branding-and-finance-workshop-for-startup-founders-tickets-163758858153

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          Advices Business Funding

          Cheat-sheet The Business Startup Checklist – Part 1.

          The Business Startup Checklist:- Things you need to start a business
          When launching a new venture it’s important to get the best advice and guidance to help you through the process from evaluating yourself and creating a business plan to funding and building your team.

          Wouldn’t it be great if you could have a cheat-sheet (or a startup checklist) to guide you through the process with key tasks and activities to ensure your start-up business is a success.

          There is not an ultimate guidebook, but AccountsPro have put together a business startup checklist which will guide you through the things you need to know from pre-launch to post-launch.

          Startup Checklist (This is Part 1. of the Startup Checklist. There will be a Part 2. to follow)

          Evaluate yourself
          This is a vital step in starting up a small business. Consider your knowledge, confidence and experience and identify areas where you night need support. Commit yourself to starting a business and ask yourself:

          • What skills do I have?
          • What am I passionate about?
          • What is my area of expertise?
          • Am I committed to starting a business?

          Once you have satisfied yourself that starting up a business is for you consider:

          • How much can you afford to invest?
          • Do you need to raise extra funding or capital?

          Create your idea
          Validate your idea and ensure it solves a real-life problem. Consider what is different about your idea.

          • How will it stand out from the crowd?
          • Why will people want to use it?
          • Do you know about this business?
          • If not, what do you need to learn?

          Market Research
          This is critical for any small start-up business. Spending time on market research is the best way of knowing and understanding your customers. Comprehensive market research is the best way to evaluate the strength of you new business and vitally important if you want to raise capital.

          Write a business plan
          Formalise your ideas on paper. Planning helps clean up ideas, achieve full potential, find the right team to support the business and secure funding.

          Your business plan will give a clear picture of your small business startup and is more likely to attract investors and funding.

          Choose a business structure
          Choosing the right business structure is important, with each structure having different tax issues to consider as well as different liability considerations.

          The differences between the main structures are:

          • Sole trader – exclusive ownership of a business, entitlement to all profits, but also liable for losses.
          • Partnership – similar to the option above, but profit and liability split between all founders.
          • Limited company – a private company where your liability is only tied to the amount you have invested.
          • Limited liability partnership – as above, but with multiple partners tied to the amount they have invested.

          Assess your finances
          Once you have evaluated your plan you will have a clear idea of what sort of capital you will need to start. The finance you will need will depend entirely on the business you are launching. Break it down into categories:

          • Essential investment
          • Helpful investment
          • Nice to have investment

          You will also need to consider:

          • Finance options including bank or startup loans and investment or funding. You may consider applying for funding through the UK government Seed Investment Scheme (SEIS). For further information see AccountsPro article A Guide to SEIS for Startups: How to Make Your Startup Investible. Crowfunding and venture capital funding are other options open to small business startups.
          • Finance tools to ensure you are able to effectively track and manage your money and meet your financial obligations as a small startup business in respect of accounting and bookkeeping and tax advice and obligations. There are a number of accounting tools that are available for startups. AccountsPro can assist with our Cloud Automation Services which can automate a number of financial processes within the business.

          Choose a business name and brand for your business
          This will need to be thought about carefully for legal and marketing purposes. Check that your business name is available by doing a search with Companies House.

          Register a website
          Once you have decided on a business name, you should consider registering your website address (domain name). It is important in today’s world that you have a digital presence, and we can help you to source the talent to design and build your website for you.

          Making your first hire
          Many startup founders have the mindset that they can do everything themselves, but this is rarely the case. Startups need talent at different stages of growth, and it is often more cost effective to hire interim talent and leaders that can specialise in building teams around their particular function.

          AccountsPro specialise in helping your hire permanent or interim talent but, hiring is not always the option, and we can advise and provide guidance on more cost-effective alternatives.

          Sourcing an Accountant and financial services
          Ensuring you have a good accountant will help to overcome initial hurdles. Keeping financial records, complying with tax obligations, VAT and PAYE rules are all musts.

          Our Accounting Services include monthly and all-inclusive packages from bookkeeping to year-end accounts and PAYE.

          AccountsPro are listed as a Tech SME UK Accountant Recommendation for 2021 and our team can give you guidance and advice on financial modelling for your small business startup including company incorporation, preparing startups for investment through to flexible FD support.

          Our Startup Advisory Service provides guidance which is based on our teams’ experiences of both working ‘with’ startups and ‘inside’ startups. Our team have the experience as employees and founders, and we are always on hand to give you the best possible guidance.

          For a trusted finance partner that will support and guide your business, contact us for a free consultation using our contact form. Alternatively, you can call us on 0207 193 8798 or email us at: hello@accountspro.co.uk

          CONTACT US TODAY

          FOR A FREE CONSULTATION

            CFO

            Outsourced CFO and FD Services for Startups & SMEs

            Outsourcing a CFO or FD can be a very cost-effective practice for startups and early-stage companies and provides an invaluable resource for your business, allowing you to access the strategic financial skills and expertise that your company may not as have as a newly formed company or startup.

            Hiring a Chief Financial Officer (CFO) or Financial Director (FD) is often not economically possible and allows you to gain expertise without adding to your permanent headcount.

            As a business develops and expands, a start-up or early-stage company will need CFO or FD to help navigate growth. An outsourced CFO service can be highly effective and outsourced CFO service costs can be very appealing to start ups and small businesses.

             

            An outsourced CFO or FD can provide your company with:

            • Experience – being able to tap into financial expertise
            • Forward planning – working with your business to provide monthly forecasts, yearly budgets, source funding and capital and give you a clear view of your company’s likely landscape down the line
            • Oversight – help you to see, understand and enhance the numbers
            • Insight – review and challenge financial strategy and information

             

            Chief Financial Officer v Financial Director

            The roles of CFO and FD are interchangeable. Both roles play a vital part in managing, controlling, and analysing the financial climate of a business.

            In larger companies, where there are teams of people working on financial matters, the CFO is the most senior person within the finance operations.  The FD will be the most senior accountant in charge of day-to-day operations.

            The key responsibilities of both roles are outlined below.

            The Chief Financial Officer will oversee the company’s financial operations, managing the financial intricacies and working together with senior company executives and the senior management team to develop and manage financial and tax strategies and set up financial IT systems.  Their primary goal is to drive the company’s financial planning to support its growth and secure new business and are responsible for strategic direction.

            The Financial Director has similar responsibilities, creating a solid foundation upon which a company can grow, providing financial advice and support to senior executives and directing the company’s financial operations.  They are generally responsible for focusing on all financial aspects of the company and overseeing systems and controls on a day-to-day basis.

            In start-ups and small to medium sized businesses, the distinction can be academic with the job descriptions being comparable.  The key point is to focus on the tasks to be performed and to ensure the business has the right financial leaders to build financial models, source investment, raise capital and explore funding options.

            In organisations where there is a CFO the FD will have similar responsibilities, but the key difference is that the CFO will be part of the senior executive team and sit on the board, whereas the FD are not part of the senior team but have a key role in overseeing and directing the company’s financial operations and report to the CFO.

            The level of financial leadership required will depend on business requirements.  Each have different skill sets and the stage of a business will establish when such skill sets are needed. A startup or early-stage company will need advice and support when raising funds and capital and to explore tax relief schemes such as EIS/SEIS.

            Hiring is not always the right option, at AccountsPro we can provide your business with FD and CFO Support which are designed to help your business grow and succeed. We will provide an experienced and commercially astute finance professional without adding to employee count and resource costs and will work with your startup or early-stage company to ensure you have the right level of support that will add vast support to your team.

            We understand how businesses work and how to make them grow. By combining financial support and business acumen, we will build the right financial foundations for your company and give you the support and advice when you need it – identifying opportunities and providing a cost-effective resource to support your company’s growth.

            AccountsPro can find the best talent for your startup, helping you hire interim or permanent FD or CFO support as we become an extension to your business.

            For a trusted finance partner that will support and guide your business contact us for a free consultation.

            CONTACT US TODAY

            FOR A FREE CONSULTATION

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