4 Revealing Signs your Business is Crying out for a Part-Time Finance Director (plus tips on finding the right one)

Is this you? You’ve got a bookkeeper or accountant who does your day to day accounts. Your suppliers and employees get paid on time and your sales invoices get paid ...probably. You receive a set of financial statements at the end of the year. So, you’re all sorted, right? Wrong. This is not enough. You could be blindingly walking your business down a very, risky road.

Find out if it’s time for YOUR business to get a part-time FD. Do any of these sounds familiar?

1.    You have ambitions to grow, but there is no long-range plan and no budget. Ambition without a plan, is simply a wish list. Without a budget there is no discipline to keep your costs in line with your income. It becomes impossible to set medium and long-term goals. You cannot accurately know if your pricing is correct, as you do not know your overhead and production costs. Does this resonate with you?

2.    You worry about cashflow. You know the old mantra, cash is king. You know it’s important. That’s why it wakes you up at 4AM because you have no visibility about if it’s going to run out, and if so, when. One of the skills of an FD is manage your cash flow and keep you abreast of the situation, so you know well ahead of time, if something needs to be done to change its course.

3.    You are feeling financially blind. You only know how your business did financially, when your accountant gives you a set of financial statements to sign once a year. Without monthly management accounts you have no visibility on how your business is performing. And if they are being done by a bookkeeper, how do you know they are accurate? One client I worked with had an established small finance team handling the day to day. When I reviewed their books, I found ￡100K in sales that had mistakenly not been invoiced. Having someone around to check this stuff is done right, is a great idea. As a business owner, you really need to confidently know month to month, how you’re doing.

4.    There is a serious amount of growth in sales. And the contracts you are winning are getting big! The faster the growth, the larger the risk is on your business. Payment terms might start to become less favourable especially with bigger clients. Do you have the finance in place to support these opportunities? If you have to invest heavily in stock to support sales growth, how are you paying for it? Having an FD at your side will help you steer through your options. If you require financing they can source and negotiate with finance providers and ensure you do not suffer the all too common “failure due to over trading” death sentence.

If you’ve identified with any of these scenarios, then you could use a part-time FD. Some businesses benefit from a regular 2 days a week and others reap great rewards from just one day a month. The beauty of outsourcing a part-time FD is that it is completely flexible.

What to look for

Your FD should be competent in (but not limited to) the following areas:

·     Budgeting, forecasting, long-range planning

·     Cashflow management

·     Knows how to mould a finance team into a great one

·     Is a mentor for your finance employees

·     Is up to date with the latest laws and tax legislations that could impact your business

·     Has rapport with the business owner. Trust is absolutely vital

·     Can demonstrate that they can easily explain financials to the Leadership team. Good communication and approachability is crucial.

WrightCFO Ltd is an award winning, niche consultancy of Portfolio Finance Directors across the Greater London area. We have a handful of quality finance professionals who are all chartered accountants and highly experienced.

If you would like to find out more about how a part-time FD could help your business email [email protected] or call me directly on 07817 784 603 for a discussion.

Sophie Wright, ACMA, CGMA

WrightCFO Ltd, Founder