Outsourced Finance Director vs In-House: Cost and Strategic trade-offs
- kimberleylock
- Oct 6
- 2 min read
As your business grows, the financial complexity of decisions grows with it. Many SMEs reach a crossroads: should they hire a full-time, in-house Finance Director (FD) or outsource the role to an experienced partner?
Choosing the right path can mean the difference between controlled, profitable scaling, or expensive missteps.
In this guide, we break down the real costs, strategic benefits, and decision factors so you can confidently decide what’s best for your company.
What Does a Finance Director Actually Do?
A Finance Director (FD) isn’t just a senior accountant. They’re your financial strategist. Responsibilities typically include:
Financial planning and forecasting
Budgeting and cash flow management
Overseeing compliance and financial risk
Preparing reports for stakeholders
Advising on funding and investment decisions
FAQ: What does a finance director do?
A Finance Director provides strategic oversight of your company’s finances, ensuring the business stays solvent, compliant, and on track with its growth goals.
Cost Breakdown: In-House Vs Outsourced FD
In House Finance Director | Outsourced Finance Director |
Salary £85,000 - £150,000 | Starting from £37,500 |
Company Costs inc, NI, Pension, Benefits, Holiday cover & Sickness | Flexible Contracts |
Recruitment Fees | No Long term commitments |
Hardware inc Computers, laptops and space | |
Employer Liabilities |
Strategic Advantages of each Approach
Outsourced FD Benefits
Cost effective for SMEs under £20m turnover
Brings experience from multiple industries
Flexible - scale support up/down as needed
Inhouse FD Benefits
Deep knowledge of your unique processes
Stronger cultural integration with your team
Immediate, daily availability for decisions
When should you choose outsourced vs In-House?
Choose an outsourced FD is:
You're under #£20m turnover
Your business is growing or pivoting rapidly
You need best practices from a broad range of sectors
Choose an In-House FD if:
You're stable and need consistent hands on leadership
Culture fit and deep internal knowledge are top priorities
You can afford a £100k+ annual payroll Commitment
Real SME Case Study
Case: manufacturing business in Somerset, UK. Turnover £7.4m
Challenge: Held £2.5m of stock, with over £1m in slow-moving inventory aged 12+ months
Action: Appointed an outsourced FD who reviewed Bills of Materials (BOMs), identifying parts that had been swapped out unnecessarily while older stock remained perfectly usable. BOMs were updated to prioritize consuming existing stock instead of buying new components
Result: Reduced stock holding by over £450,000 in 8 months, freeing significant cash flow for growth and improving working capital efficiency.
Outcome: Avoided new stock purchases, improved margins, and generated cash without needing external funding, while saving #£50k/year in financing costs by not having to increase overdraft facilities.
FAQs
What does an outsourced FD cost in the UK?
Typical rates start at £750/day; total annual cost depends on days required.
Can you switch from outsourced to in-house later?
Yes! Many businesses start with outsourced FD support, then hire in-house once growth stabilizes
Do outsourced FDs sign NDSs/confidentiality agreements?
Absolutely! Professional outsourced FDs, like those at Lock & Ledger, are bound by strict confidentiality agreements.
Conclusion
Choosing the right finance leadership structure is one of the most important decisions you’ll make as a growing business. With outsourced FDs, you gain flexibility and immediate strategic support;
Ready to discuss the best fit for your business. Book a free consultation today.
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