Every business needs a department dedicated to managing its finances. But maintaining an in-house finance department is an expensive affair. It may also take away from the company’s ability to focus its efforts in a given direction. To remedy this situation, many firms of all sizes and from all industries have started outsourcing their finance departments. Let’s take a look at the various advantages of finance department outsourcing!
Advantages of Outsourced Finance and Accounting
1. Free Up Greater Working Capital
Recruiting and maintaining an in-house finance department requires a considerable capital investment. This is not just a one-time expense, either. It also involves incurring a rather large annual cost in terms of the salaries payable to the employees in this department. By outsourcing your company’s financial management to a firm like Diligen, you can cut down your annual fixed costs by quite a lot.
Outsourced finance and accounting will leave you with a much larger portion of your turnover to reinvest, recapitalize, or otherwise redistribute as you see fit. It gives you the opportunity to expand your business by increasing the amount you can use as working capital, too.
2. Access Expert Talent at Affordable Prices
The mathematics on this front is quite straightforward. A professional in the field of finance and accounting can only become an expert after gaining multiple years of experience. Naturally, the salaries earned by experts with multiple years of experience, especially in this field, are prohibitively high.
However, if one expert consults with multiple companies, the individual cost of hiring this consulting expert will be significantly lower for each of the companies involved. In short, outsourcing your finance and accounting to a company like Diligen helps you gain access to industry-leading experts at incredibly affordable rates.
3. Enhance Focus on Your Main Business
The cardinal rule of the entrepreneurship game is multitasking. All entrepreneurs wear multiple hats, and in most cases, their ability to focus on the heart of the business is compromised due to this.
Diverting resources including HR, money, and time on a company level to put together and maintain an in-house accounting and finance department takes away from the company’s ability to make optimum use of the same resources towards growing and developing its main business. By outsourcing this department, you can enhance the focus on the core business of your company not only on a personal level but also on a company-wide level.
4. Maintain Control Minus the Hassle
One of the core functions of a finance and accounting department is compliance. This is highly tedious and time-consuming work. It requires an acute level of diligence and attention to detail. Failing at doing justice to this can lead your company into massive trouble, legally as well as financially. However, the flip side of giving over the control of your finances and accounting to a third party can also be fraught with risk.
Finance is the lifeblood of any business, and the one in charge of this has a huge influence over the growth and future of the business itself. Naturally, this is not something any entrepreneur will be okay with having to do. It leaves the business vulnerable to external influence.
An excellent middle path to help you retain control over your financial decisions while avoiding getting bogged down with the tedious details of finance and accounting work is to outsource your finance and accounting department. Diligen offers a wide variety of services that can help you reliably outsource your entire finance department, irrespective of the size of your company.
5. Gain Greater Business Flexibility
Thomas Hobbes was referring to government bodies when he insinuated that the bigger the body gets, the tougher it is for it to be agile and responsive. However, this also applies to business concerns in the modern-day. The smart move today is to keep your company as compact as possible. It helps you focus on your strengths and allocate resources optimally.
But most importantly, the wider your company structure gets, the tougher it will become for you to maneuver your way through the legal, logistical, and tactical hoops that businesses need to go through to succeed in today’s cutthroat business atmosphere. Leaving your financing and accounting to a third party allows your company to maintain its flexibility and agility. These attributes prove to be excellent assets in helping a business thrive in the long term. By outsourcing your finance department to Diligen, you can rid yourself of the stress that comes with managing your finances in-house.
How Diligen Helps
Diligen offers a full spectrum of financial and accounting services that can take care of all the business needs your company is likely to require in its lifetime. Here’s a quick run-through of the flagship services.
1. Virtual CFO
Hiring a full-time CFO is usually out of the question for businesses in their formative stages. However, senior-level financial management is the most critical to businesses in these very stages. Diligen’s Virtual CFO service allows you to avail your business of these services at incredibly affordable rates, exactly when you need them the most.
2. Enterprise Risk Management
Having a massive amount of capital can only take your business so far if you don’t know how to hedge your bets and seize every opportunity to build value using your existing assets. Building value, however, comes with its own set of risks. Diligen can help you minimize your company’s exposure to financial risk while making the most of every opportunity to grow your company’s wealth.
3. Tax Planning Strategy
Unexpected tax liabilities can spell doom for business concerns that have failed to appropriately measure and accommodate for the same in their financial plans. Given the complexity of prevailing tax laws, it takes a certain level of familiarity with the system for a company to make appropriate arrangements to pay its taxes when the time comes. Diligen’s team of highly skilled accountants and state-of-the-art technology helps simplify this process for you. You will never have to worry about your company’s taxes again!
4. Due Diligence
Major business transactions such as project financing and handling mergers and acquisitions can take a heavy toll on any company’s in-house finance and accounting department. This is primarily due to the need for the company to perform its due diligence, which is an extremely nuanced and thorough examination of all the financial and legal documents involved in the transaction. The sheer amount of human resources required for this can overwhelm smaller businesses. Diligen’s team of experienced and accomplished professionals can help you by taking over the task on your behalf!