There’s a quiet revolution happening in the back offices of UK firms. Boards that once kept their finance teams strictly in-house are now more willing to hand over key functions to specialist providers. This shift is reshaping how financial work gets done and, perhaps more importantly, how companies are valued — especially when it comes to EOT valuations during sales to Employee Ownership Trusts.
Why the momentum keeps building
So what's actually fuelling this boom in finance outsourcing services? A few things, really.
First up – money's tight. Inflation's eating into margins, wages keep climbing, and suddenly that in-house finance team is looking very expensive. Businesses are scrambling to figure out how to keep their financial operations running smoothly without haemorrhaging cash. Outsourcing firms have cracked this because they're working at scale – spreading those fancy automation tools and expertise across dozens of clients instead of just one. The maths suddenly makes a lot more sense.
Then there's the tech revolution. Cloud platforms and AI have completely changed the game. Remember when getting your monthly reports meant waiting weeks while someone manually pulled numbers from five different systems? Those days are ancient history. Now external providers can plug straight into your systems and spit out accurate reports almost instantly. It's not just faster – it's actually more reliable than the old way of doing things.
And third, regulation. The UK’s financial and tax environment has grown increasingly complex. Firms that operate across regions — or even just within multiple tax jurisdictions — often find it more efficient to rely on providers who specialise in compliance, reporting and audit preparation.
All of this means that outsourcing is no longer viewed as a risk to control or oversight; in many cases, it’s the opposite. A well-managed outsourcing relationship can actually strengthen governance by introducing standardised procedures, audit trails and clear accountability.
The rise of Employee Ownership Trusts
Now, let’s turn to EOTs — Employee Ownership Trusts. Since their introduction in 2014, they’ve become a popular exit option for UK business owners. The model allows a company to transfer ownership to its employees through a trust, often with significant tax advantages and cultural benefits. Over the past few years, hundreds of firms have taken this route, from engineering companies to creative agencies.
The appeal is easy to understand. Owners can preserve the independence of their business, reward long-serving employees, and ensure continuity without selling to a competitor or private equity buyer. But with this structure comes an important consideration — the EOT valuation.
How outsourcing influences EOT valuations
An EOT valuation is designed to establish a fair market value for the business being sold to the trust. It must reflect sustainable earnings, realistic cash flows and appropriate market multiples. This is where outsourcing can play a surprisingly important role.
When finance functions are outsourced to experienced professionals, financial records tend to become more accurate, consistent and timely. That transparency can make a strong impression on valuers. If outsourced reporting shows stable margins and well-documented controls, it helps justify stronger valuation multiples. In other words, the company appears more reliable and better managed — both qualities that add value.
Of course, the reverse can also be true. If the outsourcing relationship is poorly defined or if there’s confusion over who controls financial data, valuers may apply a discount to account for the risk. Unclear contracts, incomplete data, or untested service arrangements can all cast doubt on the sustainability of profits.
It’s not uncommon for advisers involved in EOT transactions to review the company’s outsourcing arrangements during due diligence. They’ll want to understand how responsibilities are divided, how data is stored, and whether there are contingency plans in place if a provider changes or fails.
Preparing for an EOT in the era of outsourcing
Owners planning to move towards an EOT can take a few practical steps to make sure their outsourcing arrangements strengthen, rather than weaken, their valuation.
1. Map out the scope clearly. Define what is outsourced and what remains in-house. Clarity reduces the risk of duplicated effort or gaps in control — both of which can affect confidence during valuation.
2. Ensure transparency. Management accounts should be clear, consistent and independently verified where possible. If outsourcing has improved the reliability of reporting, make that a central part of the valuation narrative.
3. Review service agreements. Trustees and valuers often look for evidence of strong contracts, defined service levels and appropriate performance metrics. These documents can reassure them that key finance functions are stable and well-managed.
4. Make sure your service agreements are actually up to scratch. Trustees and valuers will be digging through your contracts looking for proper SLAs and solid performance metrics – they want proof that your finance functions aren't held together with sticky tape and crossed fingers. Good documentation here tells them everything's under control and professionally managed.
And don't forget the transition costs – they'll bite you if you ignore them. Once the EOT's in place, your outsourcing setup might need tweaking to handle new reporting requirements or different governance structures. Better to bake those costs into your forecasts now rather than getting a nasty surprise six months down the line when you realise nothing's budgeted for the changes you actually need to make.
A broader shift in how value is seen
What’s interesting about this intersection of outsourcing and EOTs is that it reflects a deeper change in how value is perceived. In the past, a company’s worth was often tied to its assets or intellectual property. Today, reliability, transparency and process maturity carry just as much weight. Outsourced finance functions, when managed well, can help demonstrate all three.
It’s also worth noting that the UK government continues to refine guidance around EOTs. Trustees are now expected to take a more active role in assessing whether the purchase price is fair, and detailed financial documentation is often part of that assessment. Clean, outsourced records can therefore make the valuation process smoother, faster and less contentious.
Looking ahead
Financial outsourcing and EOT ownership may seem like separate trends, but in practice they are deeply connected. Both reflect a shift towards professionalisation and long-term thinking in how businesses are managed.
As the outsourcing industry continues to mature—supported by better technology, more rigorous regulation and rising expectations from clients—its influence on business valuations will only grow. For owners considering an EOT, the quality of their financial outsourcing arrangements could quietly become one of the most important factors shaping the final deal.
At its best, outsourcing isn’t just a way to save money or tidy up the books. It’s a way to build credibility — and in the world of EOT valuations, credibility is often what turns a good number into a great one.
