The True ROI of Outsourcing Finance for Construction SMEs

Introduction - ROI of Outsourcing Finance for SMEs

For many construction and engineering SMEs, finance is treated as a cost rather than a driver of growth. Business owners often ask, “What’s the return on outsourcing finance? Surely I can just get by with a bookkeeper or do it myself?” The truth is that poor financial oversight is one of the main reasons SMEs lose margins, run into cash flow trouble, and miss opportunities for growth.

Outsourcing your finance function, bookkeeping, management accounts, payroll, forecasting, and FD-level advisory, delivers a return far beyond compliance. It reduces overhead costs, prevents costly mistakes, and gives directors clarity to make better commercial decisions.

At Jones Financial Accounts (JFA), we specialise in turning finance into a profit centre for construction and engineering firms.

The Impact

Outsourcing your finance function delivers two major benefits: cost efficiency and insightful decision-making.

On cost efficiency, outsourcing removes the need to hire and manage a full in-house team. An SME trying to build this function internally may need a bookkeeper (£30k), an accounts assistant (£25k), and a finance manager (£50k+). That’s over £100k annually, before benefits and training. Outsourcing replaces this with a team of experts for a fraction of the cost, tailored to your workload.

On insight, outsourcing goes beyond basic bookkeeping. With the right partner, you gain management accounts, cash flow forecasts, job-costing reports, and board-level analysis. These tools show where profit is really being made (or lost), allowing directors to act early.

For example, discovering a project is overrunning by 10% halfway through means you can adjust and protect margin, rather than discovering the loss six months later.

The impact is measurable. SMEs often see cost savings of 20–30% compared to in-house finance, and profit uplifts of £50k–£150k annually by avoiding overruns, improving cash flow, and securing better supplier and lender terms.

Strategy to Get It Right

To maximise ROI from outsourcing, businesses need a structured approach:

1. Define scope

   Decide what to outsource, bookkeeping, payroll, management accounts, forecasting, or full FD-level support. Many firms start with compliance and expand as confidence grows.

   
   

2. Choose a specialist partner

   Generalist accountants may tick the compliance box, but construction and engineering require expertise in CIS, VAT, stage payments, and project costing. Select a provider who understands your industry.

   
   

3. Integrate systems 

   Cloud accounting (Xero, Sage) should connect with job-costing tools, payroll, and supplier systems. This reduces admin and gives directors real-time visibility.

   
   

4. Agree deliverables 

   Set expectations for monthly management accounts, cash flow forecasts, and board packs. The ROI comes not just from doing the work but from clear, actionable reporting.

   
   

5. Review and adapt. As turnover grows, adjust the service level. At £1m you may need basic forecasting; at £5m you’ll need pricing reviews, funding support, and scenario planning.

   
   

By following this strategy, outsourcing becomes a growth enabler rather than just a cost-saving measure. It frees leadership time, prevents financial blind spots, and equips directors with the tools to steer the business more effectively.

Example

A £1.5m-turnover construction business hired a bookkeeper and relied on year-end accounts for visibility. Despite strong sales, cash was constantly short, and suppliers demanded quicker payments. In one year, they lost £80k in margin due to labour overruns and untracked materials.

When they outsourced to JFA, we introduced weekly cash flow forecasts, job-costing reports, and monthly management accounts. Within six months, the business recovered £60k in lost margin by identifying overspending mid-project.

They also secured better credit terms with suppliers by presenting clear financials, improving cash flow by £100k.

The ROI was clear: outsourcing cost less than £40k annually but delivered a £160k turnaround in profit and cash flow. In-house, they would have needed to spend over £100k on salaries for the same level of expertise.

Misconceptions

• “Outsourcing is only for big companies.” Wrong. SMEs benefit most, especially when turnover passes £500k and financial complexity increases.

  
  

• “You lose control.” In reality, outsourcing gives you more control. You gain accurate, timely information instead of chasing paperwork.

  
  

• “It’s more expensive than hiring.” Fact: outsourcing often costs less than a single finance hire while providing a whole team’s worth of skills.

  
  

• “It’s just compliance.” The real ROI comes from insights: cash flow forecasting, project profitability analysis, and pricing reviews.

Key Takeaways

• Outsourcing reduces finance costs by 20–30% compared to in-house teams.

  
  

• The true ROI comes from insights that prevent losses and protect margins.

  
  

• Construction SMEs gain stability, credibility, and growth capacity.

  
  

• JFA delivers FD-level expertise at a fraction of the cost of a full-time hire.

Want to see how outsourcing your finance function can deliver real returns? JFA helps construction and engineering SMEs save costs, protect margins, and scale with confidence.

Wrapping up today's insights, tomorrow we simplify another accounting challenge