- Accounting and finance is not your core business. With most finance teams being setup “piecemeal” over time, this lack of structure inherently results in inefficiency – and no real clarity on the true purpose of a finance team (hint: it’s not just to “keep you out of trouble” i.e. ensure bills / staff / ATO get paid).
- With the finance team’s haphazard setup and growth over time, costs become prohibitive. There is the hard cost of ongoing wages, and on-costs such as insurances, HR and training which can get into the hundreds of thousands. Then there is the opportunity cost of the business owners’ time for on-boarding new staff members, dealing with staff turnover and absences. These distractions and lack of structure are not conducive to a scalable model ready to accommodate the ever-changing needs of a growing business.
- The lack of strategic insight into business performance (its pulse) and proactive advice on how to increase profitability, not simply revenue. Insourced SME finance teams typically don’t have the time, experience or both to provide such analytical insights on a timely basis, so this is often missed.
Our prediction In the era of Uber, AirBnb and Airtasker, we live in a world where commoditisation of assets (cars, property and our time respectively) is increasing human output and our return on assets. The finance space is no different and we predict we will very quickly live in a world where the services provided by bookkeepers, tax advisers, Virtual CFOs and corporate advisers will all be delivered as an integrated service – CharterNet Finance Function. Barriers to business are being quickly eroded by technology and the need to stay ahead of the game requires careful allocation of these resources. Outsourced Finance Function services are fast becoming the bespoke, cost effective, accountable and truly value-add solution – redefining what it means to create a quality finance team for your business. The problem with the status quo Without funding or an existing skillset within the executive team, many SMEs initially employ a bookkeeper or junior accountant to manage routine daily and periodic accounting and financial reporting requirements for the business. Over time, these resources are expanded to accommodate for the growth and complexity of the business. The downside of this typical SME setup is as follows: