In-house finance functions – more trouble than they’re worth?
This post is by Giles Ellis, an experienced business coach and Director at GECA Chartered Accountants.
Using an in-house person to manage your accounting and finance functions might seem like a great solution. You have someone on hand to answer questions who knows your business inside out.
What many businesses don’t consider are the risks that come alongside it – some of which can have devastating consequences to a business. At GECA, we’ve helped a number of businesses come back from the brink of bankruptcy after relying on an in-house finance person.
Here are some of the most common risk factors.
Illness, death and departure
We often see businesses operating with a one-person finance team. This person holds key information to the business’s finances – from small details like logins to access financial systems, and where documents are stored, to overarching information like the strategic direction of the company’s financial future. If something happens to the finance person – they leave suddenly, they get sick, or worse, they pass away – the company is unable to operate even the most basic of functions.
Fraud
You want to trust your people, but the sad truth is that fraud happens, and it’s seen most often in scenarios that don’t come with checks and balances. Having one person in your company’s finance role means you won’t have the basic controls, like dual authorisation, that can help protect against fraud.
Compliance errors
Human error is a fact of life – and when it comes to compliance, those errors can cost your company time and money. A single finance person has no support – no one to check their work, which means that errors can happen more often, and can go undetected for longer. It also means that any errors are your company’s fault alone – you can’t blame a third party and demand they cover any penalties and fines.
Employee data privacy breaches
In-house finance people are often asked to manage payroll – and even legal HR issues – something they could have no experience in. This allows errors to creep in, but also exposes the company to risks around the mishandling of employees’ private data. Any breaches, inadvertent or otherwise, can at best damage employee relations, and at worse lead to a public relations or legal nightmare.
Outsourcing – the smarter option
Unless your company can afford to sustain a larger finance department with the right mix of skills and protocols, outsourcing might be a smarter solution. It means you sidestep many of these risks, or pass them on to people who are much better equipped to manage them. For example, with GECA’s Virtual Finance Team service you get a group of experienced professionals covering all aspects of your accounting and finance. The service is designed to act as your own finance department – you get exactly the services your business needs, such as banking, payroll and management accounting, strategic planning and business coaching.
Strong internal controls give you the checks and balances that are missing from one-person finance departments. They are designed to catch errors and protect against fraud – and since we’re a team, if we lose one person it won’t affect your business at all.
More often than not, VFT also reduces costs – you’ll save on wages, and management time can be spent more productively. You’ll also only ever pay for the functions you need now – VFT can be scaled as you grow.
Outsource for peace of mind
Most importantly, an outsourced finance model like VFT delivers you peace of mind. Rather than keeping an eye on finance and accounting, you can refocus on the business, knowing it’s in safe in the hands of experts.
So, is it time to outsource your finance department? Talk to us about how our Virtual Finance Team could save you time, money and stress – Call us now on 0800 758 766 for a complimentary, no-obligation meeting.
Time to outsource your finance department? Learn how GECA helps owners of family businesses grow their profits and increase their wealth.
