Internal Vs External Accounts Department – calculating the best value for money…

As a business owner, we know you appreciate the importance of value for money. Whether you’re assessing the cost of the products and services you procure, or the cost of the products or services you offer. But, when it comes to your business finances and deciding if you should outsource your requirements or manage them in-house, have you done your sums when it comes to the best value for money?

Whilst not all companies warrant an internal accounts department due to their size or requirements, it’s often assumed that larger organisations, that require substantial support, should recruit an accounts person or team. However, when you drill into these numbers in a bit more detail (which, as you would expect, we have) you may be surprised at the direct and indirect costs involved.

We’ve outlined a few of the headline cost comparisons below, based on a £1million T/O organisation, to give you some food for thought…

The variable /estimated costs add another factor that is difficult to budget for, and all of the above are calculated on just one member of staff, without any costs for recruitment and induction should you need to make changes to your personnel.

Costs aside, there are other considerations when comparing the benefits of in-house verses external accounts support.

• What if your payroll clerk is off sick when payroll is due?
• What if a member of your accounts team leaves? Have you considered the recruitment and training costs plus the interruption to your business this could cause?
• Do you know if your accounts staff are 100% up to date on all legislative and regulatory changes, including the many updates issued by HMRC?
• Who is going to cover the accounts’ functions when your accounts clerk is on annual leave?       
• Could your accounts staff manage an unexpected task such as an HMRC audit or a major change in systems such as Making Tax Digital (MTD)?
• Have you considered any HR costs should there be a problem with your employed member/s of staff?

As you can see from the table above, outsourcing your accounts functions, whether you choose to handover some or all of your requirements to an expert accountancy firm, has many cost savings and business benefits. Whilst we may be a little biased, we believe the numbers used in our example speak for themselves.

Running any business, regardless of size and turnover is tough, especially during a cost-of-living crisis when many other overheads are on the rise. Have you evaluated the true cost of some of your business choices? Is it time to save money, improve efficiency and reduce the variables?

If you’d like to explore the benefits listed above and discuss the many other benefits to your business that working with Ellacott Morris will bring, then please do get in touch. Our skills and services are varied, our team are incredible and our commitment to our clients adds a great deal of value too. We offer a completely bespoke service, supporting your business needs in the way that best serves you.

Let’s discuss what’s best for your business… Give us a call or drop us a line.