Due to the scale and nature of business operations, small businesses do not require large teams and multiple departments like large corporates do. This is because a small business will have fewer business functions and do not have the capacity to expand teams.
Despite there being no need for a large management team, a small business will require the services of a controller, who is responsible for all accounting-related activities in a business like overseeing financial reporting and preparing payroll.
The controller may also collect, analyse, and consolidate financial data, especially when preparing budgets. These are all functions that are important to the success and growth of a small business and it is essential that a small business hires a controller.
The challenge that small businesses face is that adding a controller to a team may not be something they can afford. Adding a member to a team can be taxing on a small business, which is why outsourced financial management services are ideal for businesses of this type. If you are a small business owner interested in outsourcing your finance, these are the costs of outsourcing controller services for small businesses.
- Confidentiality
Outsourcing your finances will require that you share sensitive and confidential data about your business with a third-party. If, for instance, you make use of financial statement services, statutory reporting services, or company secretarial services UK, you must share information about your company so the outsourced financial management services can prepare the relevant reports.
The finance and accounting services may also provide you with a trusted business advisor who will analyse and study reports compiled on your business and review business performance to help you make decisions on the growth and expansion of your small business.
When outsourcing your controller services, confidentiality is a factor you must pay extra attention to. If sensitive data about your business is shared with the wrong people, it can have a significant impact on your business and employees.
- Turnover rate
Employee turnover rate is the percentage of employees who leave an organisation during a certain period of time and high turnover rates are usually seen in bookkeeping and controller positions. The reason small businesses may have trouble with filling an accountant position for an extended time is because accounting and financial services are not usually the core competency of the management team.
In a small business, for instance, the core team may not have any knowledge of bookkeeping and may not be able to hire a professional on a full-time basis. Despite these challenges, a small business cannot function without an accountant and this is why you can consider outsourcing your finances.
By opting for outsourced financial reporting services and company secretarial services UK, you can hire an accountant in Ilford for your small business but also not have to invest in recruitment and training.
- Single point of failure
As mentioned before, a small business will not have the capacity to hire a large team of employees. This means that an employee may be responsible for several tasks and, due to the low volume of transactions, may not have a team to delegate tasks to. This creates a single point of failure, where a task will not get accomplished if the person responsible for a function is not present or available.
When opting for outsourced financial management services, a small business can be guaranteed that their bookkeeping will be completed even if their accountant is not available on a particular day. This applies to other services as well, for instance company secretarial services and financial reporting services.
- Cost-effective
Hiring a full-time employee is expensive and time-consuming. Recruitment is a process that takes time and diverts the focus of the management team away from core business functions. After hiring an accountant in Ilford, a small business will also be required to train the recruit, especially if they use accounting software.
Even the addition of one employee can add to the expenses of a business and the cost factor is one of the main reasons small businesses opt for outsourced accounting and finance services. From a trusted business advisor to an accountant, a small business can access a range of services at a lower cost to the business.
Looking at the cost of outsourcing controller services on a small business, you may also opt to outsource your finances, whether it is for the services of a reliable financial business partner or a financial management service.