The Real Cost of In-House Finance: Is It Worth It for Your SME?

Imagine you're a small business owner, juggling multiple roles, from managing sales to overseeing operations. One of your biggest headaches? Handling the finances. You’re torn between hiring an in-house finance department or outsourcing. Both options have their pros and cons, but which is truly cost-effective? This article explores the real costs, helping you make an informed decision for your SME.

Understanding the Cost of Having an In-House Finance Department

For SMEs, an in-house finance team typically includes an accountant, payroll manager, financial analyst, accounts receivable/payable clerk, and a CFO or financial controller.

According to Glassdoor, the average UK salaries for these roles are: accountant (£29,000 - £50,000), payroll manager (£33,000 - £50,000), financial analyst (£28,000 - £50,000), accounts clerk (£25,000 - £33,000), and CFO (£91,000 - £157,000).

These figures don't include additional costs such as recruitment, training, benefits, and office space. Recruiting and retaining skilled finance professionals can be a significant financial burden. For instance, recruitment costs can add up to £3,000 per hire, and ongoing training can cost hundreds annually per employee.

These hidden expenses, along with the risks of employee turnover and inefficiencies, make in-house finance a costly venture for SMEs.

Of course, you might want to keep certain positions in-house, and that’s perfectly fine. However, tapping into external financial service providers could offer you extra leverage and cost savings.

Outsourced Finance Function Solutions

Outsourcing finance functions can be a cost-effective alternative for SMEs. First of all, these external finance service providers don’t incur the usual overheads for your business. You can simply select a package that works for your business, sign a contract, and you’re good to go.

For example, here at Sanay, we offer comprehensive financial services, including bookkeeping, payroll management, and financial analysis, at a fraction of the cost of maintaining an in-house team.

We offer three main plans to suit various business needs:

• Outsourced Finance Department: Starting from £1,000 per month
• Remote Financial Controller: Starting from £700 per month
• Virtual Bookkeeping Partner: Starting from £450 per month

These packages include access to a team of financial experts, advanced software, and regular financial reports, ensuring high-quality service. By outsourcing, you can save a lot on salaries, benefits, and office space. Plus, with the scalability and flexibility that outsourced providers offer, you can easily adjust services as needed without the headache of recruitment and training.

The Bottom Line

Choosing to have an in-house finance department or outsource it involves balancing cost savings with operational efficiency. An in-house team can cost you thousands annually in salaries, recruitment, and training expenses while outsourcing to financial service providers can be much more cost-effective. These providers are readily available and bring the necessary tools and software to do the job.

Ultimately, outsourcing can free up resources, allowing you to focus on growing your business. Evaluate your needs carefully to make the best decision.

If you’d like to discuss whether outsourcing your finance department is the right option for your business, get in touch with us today.