When to outsource your accounting.

Article | Andrew Turpin | 25th June 2024

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Every successful business knows the importance of getting reliable accountancy support. As a business leader, you may think that the best option is to bring everything in house. However, running your own accounts department can be risky, time consuming, and costly. Is it time to consider outsourced finance services?

Many companies wouldn’t think twice about choosing to outsource IT support services, so why not accounting? In fact, many small to medium companies do choose to outsource bookkeeping and other regular monthly tasks, like payroll, in order to free up staff for some of the less predictable tasks. However, outsourcing business accounts services via a team of qualified accountants, through the likes of PEM, is reliable way to manage your entire accounting functions that could be well worth considering.

Yet, have you ever considered the company outsource option of a Virtual Finance Office (VFO)? One of the huge benefits of choosing this truly modern outsourcing alternative as a way of managing your accounts is its flexibility. A VFO is built around your individual company’s needs at any given time. Supplying you exactly the support you need, as and when you need it. This reduces your overheads by charging on a project-by-project basis, rather than having huge ongoing staffing costs, for example. Stick with us and let us explain how employing outsourced finance services through a VFO could save you both time and money.

With finance and accounting tasks being ongoing and essential to any business, you’ll be wondering when’s a good time to start. So, let’s look at when to outsource accounting services is best.

From day one

It might seem a bit over the top to start thinking about hiring an accountancy firm before your business is really off the ground, but we couldn’t recommend it more highly. Outsourcing company accounts through a VFO however, can make things even simpler.

Start right: Starting a new business it’s important that your accounts are set up properly, and that all statutory tasks are understood from day one. Save time, avoid making costly mistakes and take weight off your shoulders by getting a VFO to manage your company set up. Our outsourced finance team solution will keep you HMRC compliant, as well as ensuring invoices are processed and paid on time. Freeing you up to focus on the successful launch of your company.

Processes: A VFO uses digital technology to streamline your accounting and finance management, so getting these set up from the very start of your business means you’ll be up and running with the latest technology at your disposal from the outset. Streamlined, efficient and cost-effective, a VFO will put your new company in the best possible position for growth.

Planning ahead: Completely flexible, a VFO is adaptable at any time. So even if your company grows rapidly, you can choose to add on services as you need them.

Start-up packages: After an initial consultation, we’ll set you up with the support you need. Special start-up rates are available so speak to the PEM team about finding the very best deal for your new business.

When you lose a key person

For business owners, staffing can be one of the biggest ongoing headaches. Traditionally, accounts departments aren’t very resilient to staff changes due to the reliance on manual spreadsheets and individual knowledge. Losing a key finance team member could be just the trigger you need to call in the outsourced finance support of a VFO.

Continuity: When a key player in your team leaves, it can be challenging to hand over years of learned knowledge effectively. Thus, a loss of a key person tends to mean the loss of years of valuable insight into the running of your accounts.

Productivity: From how and where things are filed, to the specific way data has been logged, this loss of crucial information could set your department back months of work trying to understand and re-learn each unique process.

As a business, outsourcing accounts services through a VFO will mean the introduction of cloud accounting systems. These raise the continuity and resilience of your department by making processes more universal, more transparent and therefore less reliant on individual know-how. It’s much easier for anyone to pick up where the last person left off. So, there’s never any reason for a productivity dip, no matter who should decide to move on.

When you can’t hire internally

As you may already know from experience, hiring new staff is costly and time consuming. Add to that the complex nature of an accounts team and you have a company management headache. But what makes accounts departments so tricky to hire for, and why might it be time to look into outsource companies for finance support, or indeed a VFO?

Untransferable job titles: Finance departments vary so much in structure from place to place that job titles can be very misleading. For example, someone with the title Accounts Assistant could be doing the same level job as an Accountant elsewhere. It’s confusing for candidates, and as an employer, choosing a job title means you could inadvertently attract the wrong candidates for the role. Equally, when reviewing CVs, you’ll have to read the details to spot the candidates with the most relevant experience, costing valuable time away from your day-to-day accounts.

Sector-specific experience: Depending on the role, industry knowledge can be highly valuable. When reviewing CVs, you might find someone that perfectly fits the role, but has no previous industry experience. On the other hand, the person with the best sector experience may be less qualified for the role – leaving you with a tough decision, and the ultimate risk of making a costly mistake with the wrong hire

The overall cost of hiring: For every employee, the total cost to your company could be as much as three times their salary in the first year alone. From the cost of using a recruiter (an average of £3000 per hire), salary costs, National Insurance, pension contributions, office space and equipment, employee wellbeing costs (social functions, breakfasts, refreshments), to the cost of training – essential in accounts due to it being such a technically skilled area. Every new hire is a huge financial commitment. However, you could decide to replace an open role with the support of a financial outsourcing company, like opting for a cost-efficient VFO from PEM. With a VFO on your side, many of these costs are unnecessary, potentially saving your company tens of thousands of pounds.

When you want multiple different skills

Finance roles are split into two distinct areas of business. One skill set certainly doesn’t fit all. The day-to-day management accounting and reporting requires a Senior Accountant with attention to detail and an ability to work under pressure to tight and often company-critical statutory deadlines. Whereas, the more future-focused strategic financial management needs to be carried out by a business-minded qualified Finance Director or Chief Finance Officer, capable of guiding your company forward. With smaller to medium sized businesses, it can be hard to justify the cost of making multiple hires to cover these distinct areas, and yet without both being looked after reliably, your business can suffer. This is where a VFO can come in handy.

If you have a trusted FD, then you can set up a VFO to support them with the day-to-day running of the accounts. Equally, when you are happy with your team’s ability to meet your company’s short-term goals, but strategic support is lacking, then a Fractional FD could be the ideal solution to help drive your company towards long-term growth. Either option will save you the time, expense and worry of making additional hires.

Absences, sickness or parental leave

Setbacks due to short-term staff absence can be damaging. Accounts are focused on compliance and deadlines. Missing a statutory deadline, like your monthly/quarterly VAT return, can incur a costly fine. Therefore, it’s important for the smooth running of your business to keep your company resilient to such absences. That’s where outsourced finance support comes in. Your VFO, won’t go on holiday or get sick. We work with our team of qualified accountants to get your numbers submitted on time, every time. Doing away with the headache of trying to fill any short-term staff absences, whatever the role.

To support your growth:

When your company is doing well, you’ll need to expand the size of your accounting support. As a business, outsourcing your accounts through a VFO will set your company up in the best possible way for growth.

Flexibility: The advantage of a VFO is that it’s always ready to respond to change, including scaling-up your services on-demand. Even rapid growth isn’t a problem, making a VFO ideal for SMEs looking to grow at pace

Strategic support: If you’re looking to grow your business but perhaps you need more advice than your current team are able to offer, a Fractional FD can be employed to give you the strategic backing and forward-planning guidance you need, as you need it.

Key stakeholder reports: If fresh investment is needed, or you require the backing of your board to make changes to aid future growth, a VFO is able to supply an FD to produce the necessarily reports needed to secure stakeholders backing.

Expert guidance on-tap: With a VFO from PEM you have access to our full team of accountants, tax and business advisory specialists, anytime.

Technology upgrade: why financial outsourcing could be the answer

We’ve already outlined the many advantages of tech in accountancy. But its importance can’t be underestimated. From paying salaries to managing suppliers and staying HMRC compliant, not having the right tech in your armoury could hold your business back.

With a VFO, cloud accounting packages enable many of your company processes to be automated. Alongside streamlining many regular monthly tasks, the approval processes can also be centralised, raising productivity, and lowering the cost of running your accounts. Standardised practices through digitisation means great transparency, resilience, continuity and risk controls, keeping your company resilient to unexpected future challenges. With PEM, you’ll also always have access to the very latest cloud accounting software which we will help set up, integrate any existing data and train up your staff. Why outsource finance and accounting services? You’ll soon see the benefits when you upgrade through a VFO to greater digitisation.


There really is no time like the present. In these uncertain economic times companies are increasingly under external financial pressures which are often out of their control. Many businesses are looking to save costs and increase operational resilience to stay ahead. From continuity planning and resilience, to lowering staffing overheads while raising productivity, it has never been a better time to invest in the flexible support of a VFO.

Talk to us about how an outsourced finance package from PEM’s VFO team could revolutionise your accounts services, saving you both time and money.

This article was correct at time of publication.

About the author

Andrew Turpin

Andy joined PEM as Director of our Virtual Finance Office (VFO) in 2016, having qualified in practice and spent 9 years working Read more …