Financial Outsourcing: A Full Guide for SME Owners in the UK

This article has been checked and approved by Neil Nichols, Founder of Accounts and Legal. In 2021, alongside his brother Robert Nichols, Neil sold Portico, the company they’d built together. Since then, he’s helped countless business owners grow their businesses through offering financial outsourcing services.

Something is shifting in the business world. Maybe it’s the looming threat of AI on jobs, maybe it’s rising costs, or maybe it’s something else. What is clear, is that businesses are increasingly outsourcing parts of their organisation, and it doesn’t seem to be showing any signs of slowing down. In 2024, a fifth of businesses outsourced their finances, with 57% of UK organisations saying they plan to increase the level of business processes outsourced to third parties in 2025. But why? Well, when it comes to costs alone, outsourcing is often much cheaper, and that’s not to mention the levels of flexibility it offers too.

For SMEs in particular, Financial Outsourcing has become an incredibly cost-effective and practical way of growing without the commitment of hiring someone internally. Rather than hiring a full team, many firms are turning to specialists like ourselves to offer flexibility and scalability.

What is Financial Outsourcing?

Financial Outsourcing is where you hand over either part of, or the full finance function to a trusted external company that provides the same functionality of an in-house team. At Accounts and Legal, that service includes everything from bookkeeping, payroll, annual accounts, VAT, management accounts, credit control, forecasting, strategic board-level advice and more.

Instead of hiring a team to do the jobs internally, you can pay a fraction of the price and get the same features externally through outsourcing. For small businesses this can be huge. You’ll have access to qualified accountants and business advisors for a fraction of the cost.

At Accounts and Legal, our Outsourced Finance Department acts as your all-singing, all-dancing finance function. You get a dedicated team covering everything from the day-to-day bookkeeping and payroll through to cash flow forecasting and strategic advice, all for one straightforward monthly fee.

What Does In-House Really Cost?

Having a full internal finance team adds up. Beyond salaries, there are employer costs (think pensions, NI), recruitment, sick leave, holidays, and not to mention the hours lost by founders or CEOs doing finance tasks instead of growing the business.

You’d be surprised how many CEOs spend their time doing admin task or jobs like bookkeeping because they think they’re ‘saving money’. In reality, it often costs more both in time and lost opportunity from wasting time doing jobs that aren’t meant for a CEO.

Depending on your business size and requirements, costs for an in-house setup can run from a few thousand to £30,000+ a month, especially as roles like Finance Director, Controller, Credit Controller, Sales Ledger roles all get added or scaled.

What Do Different Finance Teams Cost?

The cost of an in-house finance function depends heavily on how much support you need:

• Basic setup (Manager + Bookkeeper): £6,000-£7,000/month
• Growing SME team (Manager + Bookkeeper + Credit Controller): ~£9000–£10,000+/month
• Full finance department (Head of Finance + Manager + Clerks): ~£18,000–£20,000+/month

And that’s before pensions, NI, recruitment fees, or covering holidays and sick leave.

Read More: In-House vs Outsourced Finance: What’s the Real Cost for Your Business?

Read more: What Is the Salary Range of a Financial Manager in the UK?

How Does That Compare to Financial Outsourcing?

With Accounts and Legal, you get the same access to a range of expertise (bookkeeping, payroll, credit control, management reporting and FD level support) but at a fixed monthly fee that’s usually 30-40% less than the in-house equivalent.

Put simply, you could save thousands of pounds every month and you’ll gain flexibility, scalability and the reassurance of a whole team rather than a single point of failure if someone is off sick or absent or on holiday.

Our Financial Outsourcing service gives you all the bits you want and need, no more, no less. As you grow you can add or takeaway services as you see fit. We’re positioned to be able to help with everything an SME owner may need along their business journey.

Why Financial Outsourcing Is Getting Popular

So if in-house is getting so expensive, what do you get by outsourcing instead?

• You get a team: not just one person, but specialists covering payroll, bookkeeping, forecasting, VAT, reports, etc.
• It’s flexible: scale up or down with your business needs, avoid paying for downtime, cover for sickness & holiday etc.
• Predictable costs: you know what you’ll pay each month, and you don’t get hit with surprises.
• Better visibility: you still get the insights you need—management reports, cash flow, forecasting—without being bogged down in day-to-day tasks.

Financial Outsourcing has moved beyond just simple bookkeeping, it’s now a popular strategic decision for business owners looking to grow who want professional financial management without the hefty price tag that comes with a fully-fledged in-house team.

The Benefits of Financial Outsourcing for UK SMEs

In addition to the obvious cost-saving, financial outsourcing comes with lots of other benefits, including:

• Access to expertise: you have a full team at your disposal just like you would if you hired internally, from payroll, to bookkeepers, qualified accountants, business advisors and legal experts too.
• Stay Compliant: we’ll ensure you stay compliant and on top of any HMRC deadlines
• Better decision making: with real-time data kept in your Xero, you’ll be able to make decisions based on what’s going on in the moment rather than after the event.
• Scalability: you can start of as big or small as you’d like. The beauty of our service is we grow with our clients as they grow, offering all the services they may need at each stage of their journey.
• Peace of mind: let us do the stuff we do best, so you can focus on what you do best. Outsourcing gives you the peace of mind that your finance function is being looked after so you can focus on the parts of the business that will help you grow.

At A+L, we use the latest cloud software and integrated apps in Xero ecosystem to give you full visibility of your finances at all times. You’ll get a bespoke, live dashboard, detailed reporting and proactive meetings on a quarterly basis as a minimum, to go through the numbers and work out where we can help you.

Read More: The Benefits of an Outsourced Finance Department

When should you consider Financial Outsourcing?

You might think about outsourcing your finance function if:

• You’re spending too much time managing admin or chasing invoices
• Your bookkeeping or reporting is always behind and you feel like you’re constantly playing catch-up.
• You want to scale or plan for investment and need a helping hand as to how to get your finance function in ship-shape.
• You need a finance team but you can’t quite justify an internal hire quite yet.

The beauty of outsourcing is that it can start small and you can add-on features as you grow or when they’re needed. For example, you will only need your contracts drafting at the start of your journey, so working with a firm that can do that for you makes sense. You may only need a bookkeeper or someone to pay your staff for now, which is an option within our pricing. We don’t try and sell you anything you don’t need, but you can be comfortable in the knowledge that its there when you need it.

Why Choose Accounts and Legal for Financial Outsourcing?

Accounts and Legal is an award-winning UK firm offering fully managed outsourced finance service for small business owners. We have everything under one roof to cover every finance role from accountants, bookkeepers, credit controllers and payroll professionals through to finance managers, management accountants and finance directors. It works for business owners as it scalable and flexible. You can have as much or as little functionality depending on your budget and goals.

With offices in Manchester, London and Liverpool, we’re perfectly set to support businesses across the UK with services including:

• Day to day bookkeeping and management accounts
• Payroll and VAT
• Credit Control and cashflow forecasting
• Tax and legal advice
• FD and CFO-level strategic input

Our clients receive quarterly reviews as standard, with clear dashboards and tailored advice to help clients with whatever is on their mind.

Financial Outsourcing: the New Way to Manage your Business’s Finances

For our clients, financial outsourcing isn’t just a way to save money, it’s a way to grow. For SMEs in the UK, it allows you access to professional services at a cost that works for you. We often find when clients are looking to hire internally it’s a chicken-and-egg situation. They know they need a finance person, but maybe they can’t justify the cost yet. If they leave it too late they might be overwhelmed by the amount of work to do, if they do it too early, it might be too costly, and also they might not have enough work to do. That’s where outsourcing comes in. It can be scaled up or down depending on where you’re at with your business.

And the great thing is it’s usually 30-40% cheaper than hiring internally.

If you’d like to find out more about financial outsourcing, talk our team today.