TALKING FINANCES DURING TALK MONEY WEEK
It seems fitting during Talk Money Week to shine a spotlight on the benefits of outsourcing your non-core activities, especially those relating to financial matters such as accounts or funding.
If it’s something you are considering, you’re not alone. Research conducted last year by YouGov showed that 28% of B2B companies had outsourced their payroll, and 24% of other accounting processes.
Financial functions are the ideal candidates for outsourcing. Money comes in, and money goes out. It’s governed by rules, processing, and calculation. And it’s repetitive, with the same processes run again and again.
WHY DO AGENCIES OUTSOURCE?
The YouGov research shows that many companies can’t afford to operate finances in-house effectively, and over a third feel that they don’t have the qualified staff to do so. Of the 40,000 odd recruitment agencies in the UK, the vast majority have under ten employees. So it’s no wonder that fully qualified accountants are not commonly on the payroll. As a result, finances tend to fall under the remit of the owner or someone in the team with bookkeeping experience.
It makes perfect sense to us that recruitment directors should outsource as many of their non-recruitment duties as possible to an external company, as this frees up time to allow them to concentrate on what they do best; recruiting and growing their business.
HERE ARE JUST SOME OF THE BENEFITS OF OUTSOURCING
It makes financial sense: outsourcing converts fixed overheads into variable costs. It frees up capital for investment elsewhere in the company and helps agencies to avoid large salary costs. And because you are effectively buying a ‘share’ of a group of skilled people, you only pay for the appropriate level of resource for the job in hand.
It helps you become more efficient: maximise the skills of your team, letting them add value to your agency, rather than getting them caught up in low value, transactional tasks that need to be done but don’t actually contribute to business growth. And those tasks also become more efficiently transacted as the outsourced partner focuses solely on the job in hand, without distraction.
It helps keep your staff: if you’re one of the many organisations without specific financial staff, it will be tagged on to someone else’s job. And if you employ a junior as, for example, a payroll assistant, they may well soon move on to bigger and better things. Outsourcing frees up your team’s time to focus on what they really want to do.
It removes the need for training: when you employ someone to do your finances, every time they move on, a new person needs to be trained up. When you outsource, there is continuity of supply. When someone leaves the outsourced company, there are other team members to take over. Training of new personnel is handled by the outsourcing professionals.
It supports the making of informed decisions: in our experience, many agencies look at their finances maybe quarterly as a maximum. Outsource your financial functions, and you’ll receive monthly management accounts. Better, regular information leads to improved decisions, based on facts rather than gut feel.
So you can see that outsourcing is not just about making a quick cost-saving. Instead, consider the effect on your business of being able to really concentrate on growing your billings. And how, by accessing accurate and regular management accounts, you’ll develop a deeper understanding of the way your agency is performing. As that increased focus spurs growth, you’ll find an outsourced service is totally scalable.
TBOS can help any size or type of recruitment business with its back-office, accounts and funding requirements. Whether you’re a new start-up or an existing agency, we have your complete recruitment back-office covered.