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Scaling Success: Outsourcing Financial Services for SMEs

Financial services for SMEs

Financial services play a crucial role in the success of any business, regardless of its size. For small and medium-sized enterprises (SMEs), managing financial operations (finOps) can be particularly challenging due to limited resources and expertise. Outsourcing has emerged as an effective solution to tackle these challenges.

In this blog post, we will explore how outsourcing can help SMEs gain better control over their financial functions and overcome common obstacles. We will also discuss the range of services that can be outsourced and the benefits of partnering with a reputable outsourcing provider like Baltic Assist.


Understanding SMEs: how do they differ from larger organizations?

SMEs, or small and medium-sized enterprises, tend to exhibit distinct characteristics compared to larger organizations. SMEs are businesses that operate on a smaller scale compared to large corporations. They typically have fewer employees, lower revenue, and limited resources.

According to Eurostat, SMEs are businesses that employ fewer than 250 individuals. Also, they typically have an annual turnover of up to EUR 50 million or a balance sheet total not exceeding EUR 43 million.

While the specific differences may vary across industries, advancements in finance automation have significantly altered the landscape. In today’s digital age, SMEs can efficiently manage their financial operations without the need for multiple full-time employees in the finance department. This is where outsourcing becomes highly beneficial.

By partnering with an outsourcing provider, SMEs can access a range of competencies without the requirement of hiring full-time employees. Whether the job requires 40 or 200 hours per month, outsourcing provides SMEs with the flexibility to engage professionals with the specific expertise needed for each task, ensuring efficiency and cost-effectiveness in their financial management.


What are the challenges that SMEs face?

As the number of SMEs worldwide continues to rise, solving their financial challenges becomes a priority. According to Statista, there were approximately 332.99 million SMEs worldwide in 2021, marking the highest number in the provided time period.

SMEs encounter various challenges in managing their financial operations that can affect all areas of the business in the long run.

First of all, SMEs tend to lack the necessary accounting knowledge and expertise to handle complex financial tasks. As a result, errors in bookkeeping, payroll processing, or tax preparation can occur, leading to financial discrepancies and potential legal issues.

Secondly, SMEs often face time constraints as they need to focus on core business activities. This leaves them with limited time to devote to financial tasks, which can lead to inefficiencies and missed opportunities.

Lastly, cost efficiency is a significant concern for SMEs, as they need to carefully allocate their resources to maximize profitability and sustainability.


Compliance obligations and scalability

Back in 2019, one year after the GDPR’s implementation, the European Union conducted a study to assess the level of GDPR compliance among SMEs. The study revealed that approximately 50% of SMEs were still non-compliant with the GDPR regulations.

Looking at the data, it only seems natural that one of the key benefits of outsourcing financial services for SMEs is the ability to ensure compliance and scalability. Compliance with financial regulations and reporting requirements is critical for businesses to avoid penalties and maintain their reputation.

Outsourcing providers specializing in financial services have the knowledge and expertise to navigate complex compliance obligations, ensuring that SMEs remain in full compliance with the relevant regulations.

Moreover, scalability is another advantage of outsourcing. As SMEs grow, they often require additional financial services and resources to support their expanding operations. By partnering with an outsourcing provider, SMEs can easily request additional services and resources to meet their evolving needs.

The outsourcing provider can quickly adapt and allocate the necessary expertise and staff, allowing the SME to focus on its core competencies and growth strategies.


Beyond bookkeeping: the added value of financial controlling services

While accounting and bookkeeping services are fundamental aspects of financial management, SMEs can benefit greatly from outsourced financial controlling services.

Financial controlling goes beyond providing accurate financial reports; it offers valuable insights and analysis to help businesses make informed decisions. By engaging a financial controlling service, SMEs gain better control over budget control, compliance, and cash flow management. These are vital components of daily business operations that contribute to the overall financial health and stability of an organization.

Financial controllers not only ensure the accuracy of financial data but also analyze the numbers, identify discrepancies, and provide recommendations for improvement. They act as trusted advisors, challenging the client’s assumptions and offering valuable insights to optimize financial performance.

By leveraging financial controlling services, SMEs can make informed decisions, mitigate risks, and enhance their overall financial strategies.


Advanced automation solutions and financial softwares

Baltic Assist, as a tailored outsourcing solutions provider, recognizes the importance of advanced automation solutions and software in streamlining financial workflows.

By leveraging cutting-edge technology, Baltic Assist optimizes financial processes and improves efficiency for SMEs. Their experienced team evaluates the client’s existing tech setup and suggests additional software options that align with the client’s specific needs.

Through automation, manual tasks can be eliminated or simplified, reducing the risk of errors and saving valuable time. Efficient accounting systems ensure accuracy, enhance data security, and enable real-time financial reporting.

By trusting their business to top-notch accounting systems, SMEs can focus on core operations, knowing that their financial functions are being handled with precision and reliability.


Which areas are suitable for easy and safe outsourcing?

Most financial functions within an SME can be outsourced effectively and without significant risks. Outsourcing providers like Baltic Assist offer a wide range of services that can be easily delegated. These services include:

  • accounting,
  • payroll processing,
  • tax preparation,
  • budgeting and forecasting,
  • audit support,
  • and CFO know-how.

By outsourcing accounting tasks, SMEs can ensure accurate and up-to-date financial records. Payroll services can handle complex calculations and ensure compliance with employment regulations. Tax preparation services ensure timely and accurate filing, helping SMEs avoid penalties and legal complications. Budgeting and forecasting services provide insights for informed decision-making, while audit support ensures a smooth audit process. Virtual CFO services can bring high-level financial expertise and strategic guidance to SMEs, without the cost of a full-time CFO.


Bottom line

For SMEs in Europe, financial services and controlling pose unique challenges due to limited resources and expertise. However, outsourcing financial functions can be a powerful solution to overcome these obstacles.

By partnering with an outsourcing provider like Baltic Assist, SMEs can benefit from a range of tailored outsourcing solutions. From accounting and bookkeeping to payroll services, tax preparation, and virtual CFO support, outsourcing enables SMEs to gain better control over their financial operations, ensure compliance, and achieve scalability.