Financial outsourcing for charities
Many charities already outsource some of their day-to-day functions to enable them to maximise their social impact. Increasingly, charity Trustees and managers are examining the practicalities and benefits of outsourcing elements of their finance function, often as part of a wider review of the efficiency and effectiveness of support functions within their organisations.
When we consider the reasons why this is happening now, we can see the benefits Mazars can bring to your charity as a financial outsourcing partner.
We believe there are two important drivers for the growth in financial outsourcing in the charity sector, being recent improvements in available technology and the ongoing requirement on many charities to concentrate resources on their frontline services and generally ‘do more for less’.
Historically, many organisations have been sceptical about whether financial outsourcing could really be a workable alternative to an in-house resource. Recent advances, however, can significantly improve the process:
- Documents and data can be supplied to our team by uploading it to a secure portal, thus eliminating the need for the cost and delay of posting paperwork to us;
- Through the use of cloud technology, tasks can be shared between your own team and the outsourcing provider or, alternatively, you can maintain ‘read only’ access to your ledgers to allow you to deal with queries;
- Optical Character Recognition (“OCR”) software allows scanned invoices to be converted directly into accounting data and also doubles as an electronic storage facility;
- Data is kept secure, reducing reliance on in-house servers and manual back up procedures; and
- Through our use of the latest accounting software, management reporting is dynamic and structured to the requirements of your senior team and your Trustees. We can also bring you recommendations for improvements based on work we are doing for other clients.
Many charities operate in an environment in which the scale of their activities is quite seasonal, or can fluctuate very quickly as project funding rises or falls.
Others operate at a scale at which the ongoing requirement might be for a % of a low-level book-keeper, a % of a management accountant and a smaller % of a finance director to work with the Trustees and undertake higher level management tasks. That poses particular recruitment challenges in that the organisation might over-recruit, and have an expensive resource undertaking basic tasks, or under-recruit, and risk not having the financial management skills required to enable senior managers and Trustees to manage effectively.
Financial outsourcing offers a charity the opportunity to ‘buy’ only the resources it needs, structuring a package of support according to specific seasonal requirements and increasing or decreasing the level of input at short notice.
We find this to be a particularly attractive proposition in respect of payroll services, where some organisations already feel exposed if they have only a single employee who is able to run the monthly payroll, and realise that from time to time this important process might be impacted by annual leave or sickness.
In most cases, a proposal for financial outsourcing support will offer a reduction in an organisation’s overhead costs.
Benefits of Outsourcing
It is not all about cost, however. We believe that financial outsourcing offers a wide range of benefits to charitable organisations as set out below.
If you would like any further information in relation to our financial outsourcing services for charities, please contact Keith Marshall .