What does outsourced finance support really cost? And the questions most consultants ask before investing

One of the first questions people ask us is, “How much does outsourced finance support cost?” It’s a completely fair question because, if you’re thinking about investing in your business, it’s only natural to want to understand what that investment might look like from the outset.

The difficulty is that outsourced finance support isn’t a fixed product with one price tag. It’s based on where your business is today, what you already have in place and where you want the business to go, so the cost will be different for every business.

What am I actually investing in?

When people first think about outsourced finance support, they often focus on the practical services. That might include bookkeeping, payroll, management accounts, cash flow forecasting, budgeting or support at board meetings.

Those things are all important, but they’re only part of what you’re investing in. The bigger value is having confidence that the financial information is accurate, up to date and reliable enough for you to make decisions from it.

It’s also about visibility. At a high level, that means understanding how the business is performing overall. At a more detailed level, it may mean looking at project profitability, client profitability, staff utilisation and how different parts of the business are performing.

Having that level of visibility means you can make better decisions and have more accountability around them. Instead of working from assumptions, you’ve got information you can use and someone to help you understand what it means.

There’s also the strategic support. My finance background, together with David’s experience as the managing director of an engineering consultancy, means we understand both the numbers and the practical issues that come up in consultancy businesses.

That might mean helping you work out whether you can afford to recruit, understanding why a project wasn’t as profitable as expected, looking at pricing or simply talking through a decision with someone who understands the business. The reports matter, but the real value comes from what you’re able to do with the information.

Why isn’t there a standard monthly fee?

If you run an engineering or design consultancy, you wouldn’t expect to quote for a project before you understood the scope. You’d need to know what the client needs, what’s already in place, how complex the work is and what they’re trying to achieve.

Outsourced finance support works in much the same way.

Some businesses already have good systems and reliable bookkeeping in place. They may be using Xero and Xero Projects effectively and just need support with management accounts, forecasting and strategic decision-making. Other businesses may need an initial piece of work to get the systems set up or working properly before useful reporting can begin.

Some businesses already have an administrator or bookkeeper handling sales invoices and the day-to-day transactions, while others are still relying on the business owner to manage everything alongside running the business.

We need to understand what’s already there, what’s working and what’s missing before we can recommend the right level of support. That’s why it’s difficult to offer one standard monthly fee that would be appropriate for everyone.

What affects the level of investment?

The level of investment will depend on the size and complexity of the business, the systems already in place and the support you already have internally.

A smaller consultancy with a relatively simple structure is unlikely to need the same level of support as a larger business with several teams, more projects and more detailed reporting requirements. In the same way, a business with reliable bookkeeping and well-organised systems may need less initial work than one where the accounting software, project reporting or internal processes need to be improved first.

We’ll also look at which parts of the finance function are already being handled. One business may need support with everything from bookkeeping and payroll through to management accounts, forecasting and strategic input, while another may already have someone dealing with the day-to-day work and need us to focus on reporting and decision-making.

That’s why the investment varies. It depends on what’s already there, what’s missing and what level of support will be most useful.

What if the recommended level of support feels like too much?

Once we’ve spoken to you and understood the business, we’ll put together a proposal based on what we think would make the biggest difference. That may include some initial work to improve the systems and reporting, followed by ongoing monthly support.

We also understand that this can feel like quite a big step, particularly if you haven’t had regular management information or strategic finance support before. You may not be sure whether you need everything we’ve recommended straight away, or the full proposal may feel like too much to introduce in one go.

That’s why the proposal is the starting point for a conversation rather than something we expect you to simply accept or reject. We can talk through the priorities, look at what’s already being handled internally and consider whether the support would be better phased.

For some businesses, that might mean completing the initial setup work and starting with quarterly meetings before moving to more regular support as the business grows. For others, monthly reporting and strategic input may be the right place to begin.

The important thing is that the support works for the business and can develop as your needs change.

What’s the cost of doing nothing?

A business can, of course, carry on without strategic finance support. Doing nothing may save money in the short term, and not every business needs the same level of support at the same stage.

There can still be a cost to carrying on as you are, though. Decisions may be delayed because the information isn’t readily available, or you may make a decision based on what you think is true when the numbers are actually telling you something different.

Without project-level visibility, work that looks successful may be losing money or producing a much lower margin than expected. If you don’t know which projects, clients or types of work are most profitable, it’s also much harder to price future work properly.

You may find that the business is constantly reacting to things rather than planning ahead. Instead of making an informed decision early, you end up dealing with the situation once it’s become urgent.

Those costs won’t always show up as a separate line in the accounts. They may appear as missed opportunities, delayed recruitment, poor pricing, lower margins or time spent firefighting.

There’s clearly an investment involved in strategic finance support, but there may also be a cost to staying where you are.

What does the process look like?

We’d usually start with a short introductory call of around 30 minutes. That gives us a chance to understand the broad picture, answer any initial questions and see whether we’re likely to be a good fit for each other.

If it makes sense to continue, we’d then arrange a more detailed conversation where we can look more closely at the current systems, what support you already have, what information you’re receiving and what you want to achieve.

We’ll then put together a proposal based on those conversations. Once you’ve had a chance to look at it, we can talk it through, answer any questions and make changes where needed. If you decide you’d like to go ahead, we then move into the onboarding stage and start getting everything set up.

Finding the right fit

Choosing strategic finance support isn’t just about finding the cheapest option. It’s about finding the right level of support for where your business is now and working with people who understand where you’re trying to get to.

For consultancy businesses, that also means understanding the commercial side behind the numbers. Project profitability, utilisation, resourcing, pricing and growth all come into it, and the right starting point won’t be the same for every business.

Some businesses will be ready for monthly reporting and regular strategic support, while others may be better starting with an initial project followed by quarterly meetings. There isn’t a right or wrong answer.

The important thing is to start with an honest conversation so we can understand what you need, explain what we think would make the biggest difference and build the support from there.