Is it time to outsource your accounting function?

Running a growing business means wearing a lot of hats – and for many owner-managers, “bookkeeper” or “finance director” can be one hat too many. Over recent years we’ve seen a steady rise in Yorkshire SMEs choosing to outsource some or all of their accounting function to a professional firm, rather than recruiting in-house. This isn’t just a cost-cutting trend, it’s increasingly a strategic decision.

Below, we explain what’s driving this shift, the areas worth considering, and an example of the difference it can make.

Why Outsourcing Is on the Agenda for More SMEs

• Rising cost and scarcity of in-house finance talent – recruiting and retaining a qualified bookkeeper or accountant has become harder and more expensive, especially outside major cities.
• Making Tax Digital (MTD) and increasing compliance complexity – HMRC’s digital requirements are expanding, and staying compliant now demands more technical knowledge and the right software.
• Access to a wider skill set – an outsourced team can bring bookkeeping, payroll, VAT, management accounts and strategic advice under one roof, rather than relying on one generalist employee.
• Scalability – support can flex up or down with the business, without the overhead (or awkwardness) of hiring and letting staff go.
• Reduced key-person risk – no single point of failure if an in-house bookkeeper is off sick, leaves, or retires.
• Better management information – outsourced providers often bring cloud accounting tools (Xero, Fathom, etc.) that give owners real-time visibility of cash flow and performance, not just year-end figures.
• More time for the owner – freeing up hours previously spent reconciling accounts or chasing invoices, to focus on customers, product and growth.
• Fresh, objective perspective – an external team can often spot inefficiencies or risks that go unnoticed when finance sits entirely in-house.

None of this means outsourcing is right for every business, or that it has to be all-or-nothing – many clients start by outsourcing just payroll or bookkeeping, and build from there.

Case Study
A Yorkshire-based manufacturing business with around 20 staff had grown quickly over three years, but its finance function hadn’t kept pace. Bookkeeping was handled part-time by the owner’s spouse alongside other duties, using outdated spreadsheets, and management accounts were rarely more current than two months old. The owner was making decisions on cash flow largely by instinct.
After moving to an outsourced bookkeeping and management accounts service, the business gained:

• Weekly bank reconciliation and up-to-date cloud accounting records
• Monthly management accounts within 10 working days of month-end, rather than quarterly figures produced months late
• Early warning of a seasonal cash flow gap, allowing the business to arrange a short-term facility well ahead of time rather than reactively
• Freed-up time for the owner’s spouse to move into a customer-facing role

The result wasn’t just tidier books — it gave the owner the confidence to plan stock purchases and a small expansion with real numbers behind the decision, rather than guesswork.

Frequently Asked Questions
Does outsourcing mean giving up control of my finances?
No — you retain full visibility and decision-making. Outsourcing typically improves visibility, since you get more regular, accurate reporting than many in-house set-ups provide.

Is it only for bookkeeping, or can it cover more?
It can be as light or comprehensive as you need — from bookkeeping and payroll through to VAT returns, management accounts, and ongoing advisory support.

Will it cost more than hiring someone in-house?
Often it’s more cost-effective once you factor in salary, employer’s National Insurance, pension contributions, software costs, training and cover for holidays/absence — but the right answer depends on your business size and needs.

What about data security?
Reputable firms use secure, cloud-based accounting software with bank-level encryption and controlled access — generally a more secure setup than a single spreadsheet on one person’s laptop.

Can I outsource just one part, like payroll, to start with?
Yes. Many businesses start with a single function and expand the scope over time as trust builds and needs change.

How do I know if my business is ready to consider this?
If you’re spending more than a few hours a week on bookkeeping, your management information is out of date, or you’re not confident in your current numbers, it’s worth a conversation.

Speak to us

If you’d like to speak to our team at Kirk Newsholme about how to outsource your accounting function, please contact Steven Wotherspoon Steven.Wotherspoon@kirknewsholme.live DD 0113 2044243 for a free, no-obligation initial meeting.

Written by: Steven Wotherspoon, Associate Director

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