In business, outsourcing specific services is not a new thing.
We outsource printing, design, and even areas of social media strategy and management, but outsourcing your charity’s finances…well, that’s a different story entirely.
However, due to the numerous benefits outsourcing can provide and its already proven popularity in the commercial sector, this concept is a growing option for many.
For small to medium-sized charities outsourcing your finance practices offers you a lot of flexibility, providing you with an opportunity to lower costs and reinvest funds into other areas – which in these financially challenging times sounds like music to every charity’s ears!
Cost efficient, time effective, and allowing you to focus on your charity’s core services, outsourcing elements of your accounting practices could be a great option. However, before you jump in, it’s important to know why you should outsource, the benefits you can expect, and the areas you must consider.
Reasons to outsource
You now have to do a lot more with a lot less
Today, we know that charity managers are expected to do a lot more with a lot less.
By outsourcing all or parts of your financial obligations, you can gain the most valuable element to a business…time.
Time that allows you to focus resources back on frontline services and your core activities.
You can also reduce costs by outsourcing during peak times within your business, meaning you don’t have to employ a full-time person in accounting if this isn’t necessary.
And with reduced costs, you now have further resources to support your core purpose.
You don’t have the skills inhouse
This is often the main reason why many charities speak to Beyond Profit.
Do you have a small core team responsible for producing the annual management accounts, filing these appropriately, producing Trustee reports, budgetary data, day-to-day accounting, managing petty cash, and more?
Not all small charities have the resources or skills and experience in accounting practices to produce what is needed to ensure complete transparency and compliance.
And this is where outsourcing comes in.
Presenting you with more opportunities as you benefit from third-party expertise, knowledge, and experience.
Must improve efficiency and effectiveness
Trustees and managers will always look for ways to boost efficiencies and improve the charity’s overall effectiveness.
By outsourcing your finances, could you now utilise staff in other business areas, freeing up time to focus on other objectives? Supporting an improvement in the performance of the organisation.
Transparency
The more transparent a charity is, the more confidence people have when working with and supporting you.
When a professional company works with you on your accounts and management reports, it can drastically improve confidence and transparency in the organisation.
Avoid recruitment challenges
As many small to medium-sized charities will be working on extremely tight budgets when it comes to recruitment, what should you look for?
Someone with fundraising skills but limited experience in bookkeeping, or a full-time, experienced accountant with limited to no experience in fundraising initiatives and business development?
By outsourcing, you can avoid recruitment challenges allowing you to focus your recruitment on the core needs of your business.
Benefits of outsourcing your finance
Outsourcing can be as flexible as you need it to be. For example, you have the choice to outsource parts or all of your finance functions depending on requirements and budget.
You have access to skilled specialists. Specialists who can provide you with improved financial management information vital for Boards of Trustees and senior management teams.
This, in turn, helps support other charity activities, freeing up additional resources, people, and time.
Outsourced agencies will also use the most up-to-date technology and accounting software, providing peace of mind that all data and information are kept safe and secure but is accessible when required.
Outsourcing generates considerable efficiencies, as you only have to “buy” what you require, allowing you to reduce your overhead costs in this area (especially if only seasonally needed, for example).
You will also see a reduction in risks as accounting, filing, submitting, and the production of management accounts are carried out by professional teams.
Areas you could contract out:
- Bookkeeping
- Management accounts
- Payroll
- QuickBooks Consultancy
- Year-end accounts
With any area of outsourcing, you must ensure you are meeting your charitable purpose at all times.
Things to consider:
Before diving straight into outsourcing your finance department, make sure to do your research. It’s essential that you carry out due diligence on suppliers, checking references, testimonials, etc.
It’s also essential to define who will be looking after the contract. Someone within the charity must still be responsible for working with the supplier to build a strong relationship that ensures consistently high quality. You want to work with a team or individual who has a process that is well-planned and communicated with you.
When looking at costs and savings, make sure to factor in the fees charged by service providers and VAT costs associated with these.
Is outsourcing your financial elements right for you?
Outsourcing can be an excellent solution for smaller charities that require expertise in specific areas. Or for those charities who have to maximise their resources and improve efficiencies while maintaining high standards and management reports.
At Beyond Profit, we aim to reduce the cost of running your finance department using our skills and years of insight and charity accounting know-how to provide you with an accounting service that is second to none. Offering strategic oversight at Director level, you receive all of the benefits outsourcing offers, matched with transparent and professional accounts, all at a fraction of the price you would pay to employ someone in-house.
Call us at 01204 582 104 or email [email protected] to see how our team can save you time and budget while improving the efficiency and effectiveness of your charity.
