The Case for Outsourcing Your Finance Function (Thrive Refugee Enterprise)

Peter Drucker is credited with coining the term knowledge-worker regarding someone who is paid to think for a living. 

Chartered Accountants, whether they are working in-house or for clients, are therefore defined as knowledge-workers. The value they add to a business is through their application of years of training in how to establish proper processes, maintain diligent record-keeping and provide accurate reporting for decision making. 

The challenge for businesses, particularly SMEs, is how to effectively run a team of accountants (i.e. their finance team) and implement the right systems so that they truly contribute their valuable knowledge rather than peddle through routine month-to-month reporting and baseline compliance output. It is not core business and accordingly, not the priority for time poor business owners.

In this article, we explore three key problems that SMEs face with managing their internal finance teams and see a solution come together for not-for-profit organisation Thrive Refugee Enterprise.

Problem #1: A lack of documented and indoctrinated processes that scale with you. 

Accountants spend a significant amount of time dealing with issues that arise out of a lack of strong processes. A classic example is that of having to manually check whether an invoice has been approved for payment processing. Time is wasted in writing emails, post-it notes or even working out who the approver is. 

Time should be invested in implementing internal processes that eliminate the vast majority of these recurrent activities from happening, such as an accounts payable workflow for a more streamlined approval process. 

The Solution: 

Prioritise systems implementation above all else.

By focusing on developing the right processes and ingraining them into your business with strong documentation, the system will not only help you grow, but will be agile enough to grow with your business. Knowledge will be kept within the business rather than at risk of being lost if key staff move on. 

When setting up these systems, it is important to only implement the gold standard methodology for doing payroll, accounts receivable, accounts payable and so on. There is no value in systemising a bad process. Investing in proper guidance here will pay dividends in the future. 

Cloud software enables businesses to automate many of the manual processes. In most cases, a single software is unable to do everything you’d like it to do. Therefore a business usually requires a combination of software, where the tech stack is seamlessly integrated in a way that it feels like a single platform.

As part of CharterNet’s Finance Function, we have curated a cloud software tech stack, ensuring it has all of the features and capabilities required for any given client. We then implement, customise and train staff in this new system for our clients.  

Problem #2: A lack of future-orientated reporting to support strong business management and decision making.

The lion’s share of an accountant’s hours are consumed with month-end reporting, BAS and tax compliance and annual financial reporting. 

While each of these are important and necessary, the opportunity cost of not spending more time on strategic, future-orientated forecasting, scenario planning and management is high.

The Solution: 

Increase the time spent on management reporting, such as cash flow strategy, budgeting and forecasting, KPI setting and tracking, periodic reporting. In turn, these result in meaningful strategy meetings that bring the finance team together with sales, marketing, operations and support for business planning. 

Free up time for these higher-value activities through implementing the right technology stack, methodologies and framework so that we dramatically increase the capacity for the finance team to play a larger role in the business’s growth. 

Problem #3: Staffing a whole finance function is expensive & difficult. Internal resources alone are not enough for consistent and cost-effective finance outcomes. 

Many SMEs require a bookkeeper, senior accountant and Financial Controller, which typically make up their accounting department. 

A Chief Financial Officer (CFO) is often engaged either on a part-time basis to provide advice on strategic decision-making, however the core day-to-day accounts are managed by a Financial Controller. 

Unfortunately for many SMEs, it is hard to compete salary-wise for a talented team and retaining the knowledge and experience of high-achievers is a real challenge and often means paying more than you’d like in competitive remuneration packages. 

Without consistency, your compliance becomes messy, technology breaks or is loosely held together, accounting becomes an expensive pain and your finance department starts to feel like a car held together with duct tape. 

The Solution: 

Calculate the cost of your internal team and compare it to an outsourced team. Outsourcing is more cost-effective than hiring internally, particularly when superannuation, leave provisions and training are taken into account. 

The value of having complete accountability built into a Service Level Agreement (SLA) with a finance function means you can depend on a fully responsible solution, with a highly defined scope designed to scale with your business. 

In such an environment, all the checklist elements that keep the business out of trouble are attended to seamlessly, while business owners have more time to collaborate on the value-add elements they never get around to like interpreting numbers through regular analytics and insights that drive effective decision making. 

The CharterNet Finance Function (CFF) provides a comprehensive range of services for businesses looking for a scalable and integrated solution across outsourced finance from  bookkeeping and payroll right through to CFO-level special projects. CFF is an end-to-end solution which can either support your existing internal resources, or replace your finance function in full on a fully outsourced, flexible basis.

The bespoke solution gives businesses access to experienced professionals and resources without the burden of hiring internal finance teams – a new way forward for SMEs looking to save time, reduce costs, and maximise value. 

If you have a Financial Controller that requires a strong operational accounting team, CharterNet’s Finance Function can be tailored to provide the exact services they need support with. 

Client in Focus: Thrive Refugee Enterprise

Thrive Refugee Enterprise is a not-for-profit dedicated to helping refugees get established in Australia by supplying small, unsecured business loans. 

As a charity operating as lean as possible, CharterNet provides the robust structure of a finance function to enable the board of directors to confidently make the decisions it needs to. 

As part of this long-term partnership, a key area of CharterNet’s focus has been tailoring the reports to deliver the precise information needed for effective decision-making and steering away from ‘reporting for reporting’s sake’.

“One of the goals for every organisation is to find that sweet spot in reporting where you focus on the forest as opposed to the trees. Board reporting is all about communicating actual progress against the organisation’s mission and strategy. It’s important not to get lost in the details, which can happen if there is too much information,” says Ernest Chunge who heads up CharterNet’s Finance Function.

“The value we bring has grown over time as improved processes and methodologies are introduced and we’ve been able to achieve this due to the strong championship of an outsourced function by Thrive’s Financial Controller Chris O’Neill.” continues Chunge. 

“CharterNet has been a long-term partner of Thrive and we’re now at a stage in our growth together where our accounting processes represent best practice, supported by a robust back office function that performs the operational accounting and compliance effectively,” says O’Neill. 

Build Your Business’s Finance Function

At CharterNet, we believe the future of Finance Functions lies in combining best practice accounting methodologies with a well integrated technology stack – all supported by a multi-disciplinary accounting team and strong knowledge system.

With cloud-software playing a larger role in accounting, it’s important to ensure these are configured and integrated specifically for your business and industry.

The CharterNet Finance Function can ensure that you have the right Chart of Accounts set up, and that your Compliance and Payroll processes are the most effective, documented and indoctrinated within your organisation. 

We support all SMEs with their Finance Function. This may mean supporting your Financial Controller with outsourced bookkeeping and senior accounting services (like we are with Thrive Refugee Enterprise) or delivering a fully embedded Finance Function which takes care of everything for you and your Board. We also provide strategic CFO services as and when required, such as during major projects, mergers and acquisitions. 

If you would like to explore what an outsourced Finance Function could mean for your business, get in touch today.