Outsource Finance vs Internal Team
Should you outsource your finance function or build an internal team? A cost and capability comparison for SMEs and boards.
The assumptions
5-year horizon. Internal team: 1 finance manager at $120,000 plus on-costs, 1 bookkeeper at $70,000 plus on-costs. Outsourced: $8,000/month retainer covering month-end, BAS, payroll, and management reporting. Software costs equal in both scenarios.
What the spreadsheet says
For organisations with revenue under $10M, outsourcing is typically 20–30% cheaper over 5 years — but the gap narrows sharply once you need daily decision support or sector-specific knowledge.
What the spreadsheet cannot say
The model does not capture institutional knowledge, team culture, responsiveness to ad-hoc requests, or the risk of provider lock-in. It also assumes stable workload — seasonal or project-driven organisations may see different results.
The question
Is it cheaper and more effective to outsource your finance function to a specialist firm, or to hire and manage an internal finance team?
What might change the answer
- Organisation size — above $10M revenue, internal teams start to make more sense
- Complexity of reporting — grant-funded or multi-entity organisations often need internal knowledge
- Growth trajectory — if you’re scaling fast, an outsourced provider may struggle to keep up
- Quality of the outsource provider — not all are equal