What does an outsourced finance function actually bring to a growing Sydney business?

With scaling businesses there come's a point where they realise they have outgrown their finance function and they might start looking at an outsourced finance team.

Here's what that might look like...

The day-to-day transactions and the end of year accounts are getting correctly filed and reconciled but the leadership team may need more than that. The numbers are there, for sure. But are they giving senior leaders a clear picture so that critical decisions can be made on more than just instinct?

Sometimes businesses look for something new or they come to us because of a crisis. It could be something like a key financial operator is on sick leave or unexpectedly quit - that absolutely does happen, of course. In reality, it’s often because the business has moved beyond its current financial setup, and that the gap between where the finance function is and where the business needs it to be is starting to cost them something.

So, are you getting the right financial reports?

It's worth pausing to ask yourself a question. Are you actually receiving useful reports?

Not useful in the sense that the numbers are there and the columns add up. Useful in the sense that they help you make a decision, spot something worth acting on, or understand what's really driving performance across the business.

A lot of leadership teams receive reporting that tells them what has happened. Revenue up or down. Costs higher or lower than budget. Variances marked favourable or unfavourable. But knowing a number has moved isn't the same as understanding why it moved or what to do about it. And it's the difference between data and genuinely helpful insight that causes otherwise well run businesses to come unstuck.

From where we stand, businesses that get the most from their finance function do a few things pretty consistently.... They review P&Ls with department heads every month, not just at year end. They ask the people closest to the operation to explain what happened in their area and flag anything that might affect the months ahead. They treat the finance conversation as something that is essential to the success of any business and not something to fear or put off.

What matters is that that kind of reporting doesn't just tell you where the business has been. It gives you something to really work with - something to question, to act on, to build a plan around.

What an outsourced or embedded finance function actually looks like

You should expect a team of experienced experts and senior financial leaders working inside the business in a way that feels much more like an internal hire than an external service. The right systems get put in place (this is always our first step). Reporting is then built around how the business actually operates and it’s not just a standard template. 

Cash flow forecasting, margin analysis, board reporting and budget management are handled consistently and reviewed regularly all the time keeping the decisions that leadership teams are trying to make in the forefront. 

It should feel less like bringing in an outsider and more like having an experienced CFO-led team on the inside. People who help guide the decisions that matter while the existing team (or our team) handles the day-to-day.

And it works alongside whatever is already in place. If there's a bookkeeper, a finance manager or an external accountant, the outsourced finance function doesn't need to replace them. It should help to bring additional structure, direction and a clearer view of the bigger picture.

That being said, for businesses that need more, Navigate (and others like us) can take on the full finance function — from bookkeeping and reporting right through to strategic financial leadership. The team works within whatever systems and tools are already in place too, so there's no expectation to change software or start from scratch. The starting point is always whatever works best for the business.

The strategic value of outsourced finance

The operational side matters enormously. But for many of the businesses we work with, the bigger shift happens at leadership level and only once the financial foundations are solid.

When a CEO or founder has a clear picture of their business and what the future could potentially look like (i.e not just looking back at last month's P&L but a genuine understanding of what's driving performance, where the risks are and what the numbers say about the decisions they are trying to make at that time), then the quality of those decisions changes for the better — sometimes dramatically.)

We've seen a loss-making location turn profitable within a year, once the reporting was in place to show exactly what was happening at site level and why. We've worked with businesses that achieved a 25% revenue lift — not because we found new customers, but because better visibility led to better decisions about pricing, capacity and where to focus.

The common thread is always the same and we do say this a lot but it’s true (and therefore worth repeating).... Better visibility leads to better decisions. Better decisions drive stronger results. The finance function doesn't create that growth on its own but without it, growth tends to happen more slowly, more expensively and with more risk than it needs to.

When does it make sense to make the move?

There's no single answer to this but a few patterns come up consistently.

The business is making significant and hard decisions for example on expansion, hiring, pricing, investment but they don’t have a forward-looking financial picture to support them. The existing setup produces reports but not give any insight. Perhaps a finance team member has recently left, or a bank or investor has asked for forecasts the business can't currently produce. It could just be that the owner simply recognises that their time is being spent managing financial uncertainty rather than running the business.

What does this mean for businesses in Sydney specifically?

Sydney businesses operate in one of the most competitive and cost-intensive environments in the country. Commercial rents, labour costs and the pace of change across sectors from retail to professional services to not-for-profit all create a financial environment where the margin for error is smaller than it might be elsewhere.

In that context, having a clear and current financial picture isn't a nice-to-have, it's a must. For a growing business making real decisions about real money, it's one of the most practical investments a leadership team can make.

The following are some of questions that come up when we’re discussing how we work and what we could do for a client.

But, if you can’t find the answer to your question or just want to have a chat, we’d love to hear from you - contact us here.

Is an outsourced finance function only for large businesses?

Not at all. Navigate typically works with businesses turning over between $2 million and $50 million. If you think the financial questions are getting more complex, it's usually the right time to reach out to us.

How does Navigate work alongside our existing bookkeeper or accountant?

Collaboratively and without stepping on toes. The outsourced finance function sits alongside whoever is already in place. It's not a replacement. For businesses that need more, Navigate can also take on the full finance function, from bookkeeping and reporting right through to strategic financial leadership.

How quickly will we see results?

It depends on the business and where it's starting from, but early impact tends to come quickly — usually in the form of clearer reporting and better visibility within the first few months. For some Navigate clients, that has meant turning a loss-making location into profit within a year. For others it's been a 25% revenue lift. The foundations go in first then everything else builds from there.

How do we get started?

The first step is a conversation. We want to take the time to understand where the business is, what the finance function currently looks like and where the gaps are — and from there, works out whether and how it can help. 

Feel free to reach out for a free chat about whether Navigate might be right for your business. 

Photo credit: charlesdeluvio for Unsplash.