Have you got the resource to deal with your financial year end?

07/11/2023.
As the shortage of good skilled staff continues to impact upon all aspects of business, how is your finance team coping? With many corporate year ends approaching at the end of December, if you are a Finance Director, you may be about to get a nasty shock.
Whether you have had your in-house team, or an independent contractor, deal with your year-end procedures, you could find a lack of resource early in the new year which causes delays and adds expense to the process. Factor in that many audit firms are also resource constrained so are insisting on specific timetables being met, then you have a significant risk in meeting your stakeholders requirements.

There are a number of different areas where support can be obtained which not only can help in Q1 of the next financial year, but also from a longer-term perspective for your business.

The following are good reasons to outsource some of your year-end procedures, including the preparation of your financial statements:

Retain focus on core tasks

For many finance teams, the preparation of financial statements is something that is only thought about once a year. At this point, it takes time to familiarise themselves again with what was done last year and research new financial reporting standards or new disclosure requirements. This distraction takes focus from core tasks and can be inefficient.

Outsourcing to a team that has this specialist expertise, working upon such questions all year round, enables efficient production of the financial statements, freeing up your team to keep their focus on core business activities which benefit the performance of the business.

Keep up with reporting requirements

Financial reporting requirements seem to increase year on year and have become more complex as a result. Narrative reporting requirements have also increased, with sustainability reporting requirements, as well as pressure to improve the quality and detail of disclosure made in directors and strategic reports. Increased regulatory pressure on auditors is also causing auditors to exert greater pressure on their clients to improve the quality of disclosures made within financial statements. What has been disclosed historically is often no longer good enough

Outsourcing brings peace of mind that your business adheres to the latest reporting requirements and regulations and provides quality disclosures. By engaging with a longer-term outsourcing partner, these challenges can be dealt with on a timely basis, throughout the year so information is readily to hand.

Liaison with auditors

When the preparation of financial statements is outsourced, that team can provide significant support in the communications with your auditors. The extent of this will depend upon your requirements and can range from extensive reconciliation work to the preparation of a year-end information pack for audit. This can help minimise queries and reduce the time spent interacting with your auditors. Our outsourcing team have experience of working closely with third-party audit teams, many with backgrounds in audit themselves.

Continuity of staff

A benefit of having an ongoing outsourcing relationship is the continuity of teams that look after your accounts. Staff turnover is inevitable in the current market; however, we believe that having a team with a specialist skill set that is applied to a range of clients provides a greater continuity that benefits our clients. In-house teams can do this, but career development can be a barrier, and contractors may well not be available from one year to the next. Whilst familiarity is considered to be a threat to independence in an audit team, for your accounting requirements this accumulated knowledge within an outsourcing team can be valuable.

Access technology

Many businesses still use manual processes for preparing their financial statements, often based on Word or Excel, with manually updated supporting schedules and notes. This opens the door to mistakes and errors that could be avoided. Whilst you might hope that the auditors would identify, there is a greater risk these could flow through to the final financial statements.

Outsourcing provides access the latest technology and to people with the skills to interpret the data. Businesses can benefit from the use of technology to both streamline the process and eliminate many areas where errors can occur. For businesses with structures that include a large number of statutory entities, benefits achieved here can quickly multiply and result in significant cost savings compared to preparing in-house. Furthermore, the software will be regularly updated for changes in reporting requirements, and whilst each assignment would be subject to quality controls, the necessity to only update once as compared to many times across a group of companies would be a significant resource saving.

After considering all the above, together with the potential shortages of resources that businesses will face next year, we believe that outsourcing is a simple solution for many Finance Directors. We can help outsource part or all of your finance function. Our outsourcing team bring local knowledge, expertise and support, every step of the way.

If you would like to get in touch and discuss your requirements with a member of our outsourcing team, please complete the form below.