Challenges, ambitions, growth and uncertainty, you really do need a virtual finance team!

Technology, Artificial Intelligence, changing markets, changing High Streets, International Markets, Trump, Brexit, Brexit, Brexit and Brexit, the road ahead for SME and owner managed businesses looks challenging and uncertain. (Did we mention Brexit!) With this amount of uncertainty, there can be fantastic opportunities for business growth for the well prepared and the well planned, but a minefield for those who are not.

For the larger businesses, this is where an experienced Finance Director can add great value and be a great benefit. From developing the strategic ideas, to engaging and challenging management against pre-determined goals, the FD is a true deputy to the managing director. But why would your business need an FD, virtual or otherwise?

Developing Strategy

• Defining strategic activities & investment
• Managing risk and exit planning
• Implementation timescales
• Strategic funding

 Developing Operations

• Controlled delegation
• Relevant business reporting & KPIs
• Profit improvement
• Working capital and cash flow management

 Supporting the business

• Compliance and reporting
• Annual tax planning
• Outsourcing other support services
• Managing legals

Business is growing, but with over-trading cash flow is challenging

In all high growth businesses working capital will be challenging. A well developed and structured reporting tool will help identify crunch points ahead of time, and a good FD will have several suitable financing options to call upon to steer through these times.

I want to grow, but not considered the longer term plan

This is a common occurrence in SMEs and entrepreneurial businesses where a great idea or delivery is being developed, but clear stated financial objectives are not. A plan can be developed which delegates and empowers senior managers to take ownership of objectives, with a clear view as to how they measure up against the overall goals on a regular basis. This is further underpinned by development of bespoke management reporting which actually gives relevant information that leaders can make decisions on, in a timely manner.

Systems and processes do not add value to customers.

Appropriate and controlled delegation aligned with good process management is a crucial cost effective tool which can free up time for the business owner and others to work on delivering value to customers, and differentiating your business from the masses. Making processes efficient, from a clear vision of what great looks like, can improve productivity whilst maintaining the control required to detect and prevent errors or drops in service quality occurring.

Predicting the uncertain future

Sensitivity analyses and a good stress test of your business is key to negotiating uncertainty. Will your imports become too expensive for your business model to work after a change in currency rates? What if inflation continues to rise, leading to an interest rate hike – how will you afford to keep debt payments on the funding obtained when your business was growing? Does your business rely on EU workers, and how will exit from the EU impact resourcing?

Modelling the venture

It is useful to have someone with an experienced approach to costing and profitability analysis. This helps to ensure that the idea will ultimately achieve its desired financial and operational objectives. Business Case Analyses (BCAs) are powerful tools to ensure that the idea has every chance of succeeding, and can also be used when quoting for new opportunities.

The virtual FD and Finance Team

Whilst a good finance director is expensive, you may not need one in a full-time position. Our Virtual Finance Office combines a cost effective accounting service with the experience and input of a seasoned Finance Director and Finance Team utilising the latest cloud accounting systems.

Our service ensures that a virtual FD is there to assist with the strategy and is always on hand to answer any questions arising or just to discuss ideas, attending monthly or quarterly board meetings to discuss results and direction of the business. Outsourcing the finance function means that continuity of service is maintained, and the virtual FD can dip into a wide-ranging talent pool within Harrison, Beale & Owen.

Although SMEs make up a large proportion of all businesses, many do not have an FD to provide strategic advisory support, as the cost can be seen as prohibited. However, in the changing world today, there must be no misunderstanding as to how much value the virtual FD can bring to a business. Combining that with a virtual finance function is not only cost effective but pivotal to the future success and growth of your business.

Given all of this that a virtual FD can offer a business, the only remaining question is why would you just use an Accountant when you can have a virtual FD and virtual finance team. 

Steven Mugglestone BA FCA

Associate Director Harrison Beale & Owen