Why appoint a Finance Director (FD)

A Finance Director’s role is not just about producing regular accounts. They can be a key driver to help your company with strategy and development. A good Finance Director is key if you want to grow your business, evaluate strategic options, investment or improve and turnaround the business. If you are merely need somebody to record transactions or have a stable and less ambitious business, then you can probably make do with a book-keeper. Finance Directors have a more complete 'toolkit', are proactive, prepare business plans, forecasts, consider different options and push business growth. Why should you appoint a Finance Director? How do you get the right person?

Why appoint a Finance Director?

°          A Finance Director is a key part of a successful management team. Somebody to make sure you’re getting value for money, and making the most of your cash. A good Finance Director will also usually play a leading role in the legal, human resources and general administration of the business.

°          If you are looking to increase your profits, use your cash wisely or raise funds then a Finance Director will provide the necessary insight and analysis.

°          A Finance Director will keep an eye on your cash, financial strategy and play a leading role as a soundboard for the commercial and product strategy.

°          The FD will take on dealing with financial and commercial issues, leaving you to focus on other areas of your business

°          The Finance Director will help ensure the finances are compatible and supportive of business strategy and give commercial input into key strategic decisions.

°          A Finance Director will prepare updates and key information necessary to make important decisions.

When to appoint a Finance Director?

°          When you feel you need a ‘sounding board’, somebody to evaluate ideas and stand-in as a reliable and credible second in-command. When you have reached a point where you can no longer manage and control, or even understand everything that's happening with your business, it's time to focus and appoint an FD!

°          If you are seeking cash, new investment, such as a large loan, preparing to sell or float the company, or grow significantly, then a Finance Director will add value.

°          Your bank and potential investors will give more credibility to your business if you have a Financial Director as part of the negotiations. They will probably require a Finance Director be appointed.

°          Think about how a Finance Director could help your decisions making process. Whilst early stage companies may be too small to support a full-time Finance Director, the earlier you hire, the quicker your company will be focused on making the most of its resources, including growth. Seriously consider using a part-time or interim Finance Director such as ourselves. We are cost effective and will more than pay for ourselves in the short term.

The role of a Finance Director

°          Your Finance Director will be responsible for producing monthly management accounts, indicators, annual budgets and cash management

°          A Finance Director is different to an accountant. Accountants are traditionally driven towards ensuring compliance including historical data and tax reporting. A Finance Director should offer this and more - being a driving force, pro-active and forward-looking.

°          A Finance Director will advise and report on your financial performance and provide ideas, suggestions and implement changes necessary to drive forward and improve the financial performance, processes, procedures, controls and use of technology.

°          A Finance Director will deal with all tax, treasury, and audit requirements and ensure that you comply with all legal and financial obligations.

°          A Finance Director will help delivery your strategy, whether it be growth or downsizing, and ensure it corresponds with your business's actual and projected financial strengths.

°          A Finance Director will ensure your business has enough cash for trading, will assess whether you need additional finance, and how to obtain it.

Finding the right Finance Director

°          List the key tasks and achievements desired.

°          Look for someone who has experience of working in a commercial environment and who understands the big picture as well as the hands-on tasks that need to be completed.

°          Preferably the Finance Director will be a commercially aware qualified accountant and should have solid experience of dealing with auditors, lawyers, and tax advisers. CIMA qualified accountants such as ourselves are reknown for being more commercially aware and familiar with working at the sharp end.

°          The Finance Director will become a vital part of your management team with input on key strategic decisions, so make sure that you have a good, trusting relationship with them. A good Finance Director will turn into a ‘critical friend’. Somebody who should draw your attention to issues that you may have overlooked, acting as a counter-balance.

°          If you are concerned that there may not be enough work to justify employing a full-time Finance Director then you could make a part-time appointment with the Finance Director working occasionally, or 1-3 days a week. This would also make a substantial cost saving for your business and give you quality and experience at a price you can afford. Contact us!

°          If you cannot afford to pay a good Finance Director then consider offering a share in your business instead.