Outsourcing vs. insourcing – what’s the difference?

Let’s break down the difference between outsourcing and insourcing finance professionals.

Outsourcing.

Outsourcing involves hiring an external individuals or companies to handle your financial tasks remotely that would traditionally be performed in-house by your or your employees. Instead of doing everything yourself or with your team, you can delegate these tasks to outside experts.

It can seem like a great idea, but outsourcing comes with its own set of headaches. You lose a control over how things are done, work might not get done to your timescales, and it can be tough to keep an eye on quality. Communication can be tricky, and there are also security worries about sharing sensitive information with third parties. And let’s not forget, some tasks just need that in-house touch to get done right!

Plus, hidden costs can pop up out of nowhere, making it less of a money-saver than you thought.

Insourcing.

Insourcing involves hiring external finance professionals to work within your business on a part-time (or fractional) basis. They work as part of your team, either remotely or on-site, but aren’t full-time employees.

They integrate with your existing staff, systems and processes, providing greater control over financial processes, and the ability to communicate directly with them. You’ll get access to a pool of people with tonnes of experience in your industry and systems, and all the best practises that come with their expertise.

Insourcing is perfect for businesses that want greater control, easier communication, integration with your business culture and better financial oversights to aid decision-making. And they’re flexible and scalable too, so they can adapt as your business changes!

Is it time to switch from a full-time finance team?

First of all, let’s debunk the myth that you need a full-time finance team in-house! Having a dedicated team sounds great, but it’s not always necessary and can be quite costly. Whether you choose to outsource or insource, there’s a number of ways you can benefit:

  • Affordability – Hiring a full-time finance team means paying salaries, benefits, training costs, and more. These costs can quickly add up and strain your budget. With insourcing, you only pay for the services you need, when you need them – which can lead to significant savings!
  • Strategic insights – Finance professionals do more than just handle the books. They provide valuable insights and strategic insights and advice to help your business thrive. From cashflow management to growth strategies, their expertise can help guide your decision-making process.
  • Accessibility – Insourcing means you’re tapping into a pool of financial experts with a diverse range of skills and experience across various industries. They bring fresh ideas, perspectives, and best practices to your business, giving you access to top-notch talent without the long-term commitment.
  • Flexibility – Your business’ financial needs will change over time. Insourcing allows you to scale your financial support up and down as you need. It’s all about being adaptable and agile!
  • Risk management – Finance professionals are experts when it comes to regulatory requirements and compliance standards. They help make sure your business stays on the right side of the law, minimising the risk of any costly fines and penalties.

By taking the financial tasks off your plate, you and your team can focus on doing what you do best – growing your business, innovating, and serving your customers!

How to get started.

Ready to explore insourcing for your business? That’s great!

First of all, identify which financial tasks you need help with. Is it bookkeeping, payroll, financial reporting, or something else? You can use our handy tool to help determine any areas of your finance function need some attention.

Then you need to research providers who specialise in the services you need. Remember though, it’s not always just one person you need to help with your finance function. With YRH, we have a team of hundreds of commercially focused finance professionals with different levels of expertise to improve your cashflow and profit, all at less risk.

We’ll only do things if it’s beneficial to your business – just book a call at a time that suits you to see how we can add value and give a return on investment.

Next week, we’ll be looking at the benefits of fractional resourcing – don’t miss it!

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