Finance Directors and Chief Financial Officers are just for large corporate businesses aren’t they? Wrong! All businesses can benefit from a Finance Director, supporting business owners in creating clear financial strategies to achieve their goals. Here are 3 key reasons why your business needs a finance director:

Expertise

The best piece of advice I have received during my career is recognising you cannot be an expert in everything. If your expertise is not in finance, then a Finance Director will help your business to identify the following:

  • key drivers of your business financials, enabling you to identify ways to grow quicker
  • ways to improve your profit margins
  • ways to improve your cash position
  • system improvements to save time and money
  • reporting and analysis required to improve decision making

The fresh pair of eyes in your business will also pick up issues not already spotted. This allows you to mitigate any potential risks within your business. For example, someone with experience of growing businesses knows how important managing cash flow is during the initial growth stage. This is due to managing increased costs whilst waiting for sales income to be received.

A Finance Director’s level of expertise helps in multiple areas such as:

  • negotiating funding with banks or other lenders
  • providing analysis and insights to any investors
  • dealing with any HMRC queries.

The ability to provide the relevant level of information to different stakeholders gives confidence in your business and your plans.

To have a continually successful business, you need strength across all areas, and especially in Finance.

Focus on Strategy

A Finance Director will focus on key strategic decisions of the business with you. These include areas such as improving profit margins, revising pricing, systems implementations or cost savings. They will help you understand what’s driving business performance, and how to grow your business and increase its value further. By not getting caught up in the day to day operations like any other finance staff you have, it enables focus on delivering the key actions required to implement your business strategy.

With a focus on the future, rather than the past, a Finance Director will also support you achieving your financial goals in a quicker time frame. With potential issues spotted in advance, actions can be taken to reduce the risk to your business.

Support

How often do you speak to your accountant? Once or twice a year? You need constant support and guidance to help you make the best decisions for yourself and your business. Your accountant is unlikely to know the ins and outs of your business. 

A Finance Director gives you that support and a soundboard; someone to confide in, but who will also constructively challenge and provide commercial and financial insight. Using the skills of analysing data, identifying trends and ways to improve the business, a Finance Director will provide clarity, enabling you to create a plan to achieve your goals.

Having a Finance Director can also reduce some of the pressure on your shoulders. They can take responsibility for key decisions such as cash flow management or contract negotiations. This also enables you to free up time to focus on the business strategy and your areas of expertise.

Finally, a Finance Director will not only support yourself, the business owner, but also other key departments in your business. They are a business partner to these functions, providing the right information for both strategic and financial decision making. This enables these departments to increase the value they add to your business.

Still not sure whether you need a Finance Director?

Here are some questions you should ask yourself about your business currently:

  • Do you receive regular (i.e. monthly) reporting which includes key performance indicators and insightful commentary and analysis, to measure business performance and support decision making?
  • Do you receive information with a forward looking view of your business, and does this information enable you to model for different potential scenarios?

I need some help, but I can’t afford a full time Finance Director?

You’re in luck! Many businesses do not need a full-time Finance Director, but do need some support on a regular basis. A report from the Financial Executives Research Foundation (FERF) stated that part-time Finance Directors are “critical to the success of start-up and early-stage growth companies”.

Utilising a virtual finance director enables you to choose a package which suits your needs. You can either access support for one-off projects, or use a subscription model to get support on a monthly basis. This makes the costs more affordable for you. It also provides the sense of certainty that your business is getting the expertise and support it deserves.

To look at the packages and services offered at Enrich Accounting, click here.

If you require any part time Finance Director support, contact Paul at Enrich Accounting here, at paul@enrichaccounting.co.uk or on 07403 407455.