Charity Accounting Services - Charity Outsourcing Cost-Benefit Analysis

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ph: 020 3286 3185
fax: 020 3014 8868
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Charity Outsourcing Cost-Benefit Analysis

Here is an example of a charity client's outsourcing cost-benefit analysis.

Charity Background: A London based charity working with vulnerable people. The charity has an annual income of £450k, of which around 75% income comes from, contract/grants and rest from general donation (unrestricted). It operates with 9 staff members and 36 volunteers. Several funding contracts were coming to an end without any firm indication from donors to renew these contracts. A part-time finance officer was taking care of accounts/finance functions, who decided to leave the charity. The trustees explored various options and eventually decided to outsource the service to us.

Outsourcing Cost-Benefit Analysis

Cost Description	Before Outsourcing (a)	After Outsourcing (b)	Savings/ (Loss) (c=a-b)
Human Resources - Finance Officer (3 days/week) - Administrator (1/2 days/week)	17,136 -	- 2,400	17,136 (2,400)
IT Systems - Hardware – pc/printer etc - Accounting software - software support/ maintenance	540 576 720	- - -	540 576 720
Office space for relevant staff (one desk space cost)	3,600	-	3,600
Annual Accounts Preparation	2,000	1,194	806
Fixed Price Outsourcing Fee (Our teams includes, Bookkeeper, accountant and finance director)	-	5,688	(5,688)
ANNUAL TOTAL £	24,572	9,282	15,290
Note: 1) Staff cost includes salary and employers cost e.g NI, pension, etc. 2) An administrative time ½ day per week required to maintain liaison with the outsourcer. This was absorbed within existing office administrator roles. 3) Outsourcing fee includes VAT.
OUTSOURCE SERVICES Maintaining up to date accounts Running payroll systems and producing payslips Monthly Management accounts (10^th of each month). Reconciled bank accounts Annual accounts in SORP format and providing all details to the auditors. Ad-hoc report and donors report information whenever required. Periodical review meeting with the Chief Executive. The Charity has now; Access to our people any time Online access to report a full finance/accounts team from us rather than a part time finance officer.

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Charity Accounting Services
London, United Kingdom
ph: 020 3286 3185
fax: 020 3014 8868
enquiry@cas-live.com