The short answer: what an outsourced finance department costs
An outsourced finance department costs most UK businesses between £500 and £1,500 a month for a managed function, and between £1,500 and £2,500 a month where there are multiple entities or heavier reporting. For a company turning over £500,000 to £5 million, that single monthly fee usually covers everything a small in-house team would do: bookkeeping, payroll, VAT, monthly management accounts and the year-end.
The reason that range looks cheap next to a payroll is that you are buying a slice of a whole team and its software, not one person's full salary. A provider spreads a qualified bookkeeper, a management accountant and finance director time across many clients, so you pay for the hours you actually need. Our outsourced management accounts service is built exactly that way, and it is the anchor most owner-managed clients start from.
What follows is the honest comparison. We will build the true, fully-loaded cost of doing it in-house from public pay data, then set it against the outsourced monthly fee so you can see the gap for your own numbers rather than a sales pitch.
The true cost of an in-house finance team
The headline salaries are only about two thirds of what an in-house finance team really costs. Most owners price a hire by the advertised salary and stop there, then get surprised by employer National Insurance, pension, software, recruitment and the cost of covering holiday and sickness. Add those in and the number climbs fast.
Let's build a realistic small function for a business in the £500,000 to £5 million range: one full-time bookkeeper, one full-time part-qualified management accountant, and a fractional finance director for about a day a week. For the base pay we use the median gross annual figures from the ONS Annual Survey of Hours and Earnings 2025: book-keepers and payroll clerks sit at £31,560, financial accounts managers at £48,980, and financial managers and directors at £76,447 (all as at 2025). The fractional finance director is roughly a third of that full-time figure.
Fully-loaded in-house finance team, per year
The two on-costs owners underestimate most are National Insurance and pension. From 6 April 2026 employers pay Class 1 National Insurance at 15 percent on earnings above the £5,000 secondary threshold, which alone adds £13,500 across these three salaries. On top of that, auto-enrolment requires a minimum 3 percent employer pension contribution on qualifying earnings, another £2,590 here.
Here is the trap almost everyone falls into. You might assume the £10,500 Employment Allowance wipes out most of that National Insurance. In practice it rarely helps at the margin, because it is a single allowance for the whole business and is usually already absorbed by the rest of your payroll before the finance team's wages are even counted. If you already employ people, the finance hires' National Insurance sits on top, unsheltered.
What an outsourced finance department actually does
An outsourced finance department is one provider running your entire finance function, not a bookkeeper you top up with a year-end accountant. In practice that means seven jobs handled under a single monthly fee: bookkeeping, payroll and PAYE, VAT returns, monthly management accounts, cashflow forecasting, year-end accounts and corporation tax, and board-level advisory.
Payroll is a good example of why bundling matters. Once you employ people you carry a monthly PAYE (Pay As You Earn) calendar, real-time submissions to HMRC, auto-enrolment duties and year-end forms, and getting any of it late triggers penalties. Handing that to a provider that also owns your bookkeeping means the wage journals, the pension postings and the management accounts all reconcile without a handoff. Our payroll and PAYE service plugs straight into the same ledger as everything else.
VAT is another piece most owners at this turnover cannot avoid. Any business over the £90,000 VAT registration threshold is filing returns under Making Tax Digital (MTD, HMRC's digital record-keeping and filing regime), so someone has to own that quarterly calendar and keep the digital records straight. Inside an outsourced function it is just one more thing that happens on time.
In-house team versus outsourced: the maths
Set the two side by side and the gap is stark: close to £132,000 a year in-house against £6,000 to £30,000 a year outsourced. That is not because the outsourced team does less. It is because you rent a share of a bigger team and its software instead of carrying three salaries, their National Insurance, their pension and their downtime on your own payroll.
There is a quality point hidden in there too. A single in-house management accountant is one person's judgement, one person's holiday, and one person's leaving date. An outsourced function gives you a bookkeeper for the daily work, a management accountant for the monthly numbers and finance director input for the decisions, all reviewed by more than one pair of eyes. For most owner-managed businesses that is a stronger setup than a lone hire, not a weaker one.
Be fair to the in-house option, though, because it does win in specific cases. Once you genuinely need someone in the building full time, sitting in on operations daily, chasing debtors in real time and owning a complex stock or project ledger, an internal hire earns its cost. The honest rule of thumb: below roughly £5 million of turnover, outsourcing almost always gives you more finance capability per pound; above it, a hybrid of some in-house resource plus outsourced specialists tends to work best.
Which option and which tier suits you
The right choice comes down to turnover, complexity and how much you need someone physically present. Most businesses between £500,000 and £5 million land in one of the two outsourced tiers, and the split is usually about complexity rather than size alone.
The managed finance function, £500 to £1,500 a month, suits a single trading company that needs its bookkeeping, payroll, VAT and monthly management accounts run properly, with year-end handled in the same place. The multi-entity and complex tier, £1,500 to £2,500 a month, is for groups, businesses with several entities or currencies, project-based reporting, or boards that want a proper monthly pack and forecast. If you are weighing which tier applies, that is exactly the sort of thing a short call settles in minutes.
Here is how the three common approaches compare for a growing UK business:
| What you need | DIY / spreadsheets | In-house hire | LOYALS outsourced |
|---|---|---|---|
| Predictable monthly cost | ● Your time, unpriced | ✗ Circa £132k/yr loaded | ✓ From £500/month |
| Bookkeeping, payroll and VAT in one place | ✗ You juggle it | ● One person's capacity | ✓ Whole function bundled |
| Monthly management accounts and forecast | ✗ | ● If they have time | ✓ Every month |
| Finance director input at board level | ✗ | ✗ Extra hire again | ✓ Built into the fee |
| Cover for holiday, sickness and leavers | ✗ | ✗ Single point of failure | ✓ Team, not one person |
| Open Mon to Sat for urgent questions | ✗ | ● Office hours only | ✓ 10am to 7pm Mon to Sat |
This is why most owner-managed businesses at this turnover outsource the finance function rather than build a team from scratch.
What this means for you: before your next finance hire
Before you advertise a finance role, price the whole thing, not the salary. The steps below take an afternoon and usually change the decision.
- Load the salary properly. Add employer National Insurance at 15 percent above £5,000, the 3 percent minimum pension, software, recruitment and cover. The advertised figure is rarely more than two thirds of the real cost.
- List every finance job you actually need done. Bookkeeping, payroll, VAT, month-end, forecasting, year-end, board reporting. One hire rarely covers all of them well.
- Decide how much presence you genuinely need. If the work does not require someone in the building daily, you are paying a full salary for part-time value.
- Get one outsourced quote to compare. A fixed monthly fee against your loaded in-house number is the clearest test there is.
- Sense-check the tier. Single company or group, one currency or several, simple or project-based. That decides whether you are in the £500 to £1,500 or the £1,500 to £2,500 band.
None of this is complicated. It is just costing the decision honestly. Done properly, most owner-managed businesses find the outsourced route gives them a stronger finance function for a fraction of the fully-loaded team, and frees the salary budget for something that grows the business instead.