Is Your Business Ready For a Finance Director?
Part Time Finance Directors
In 2020, the financial services sector contributed £164.8 billion to the UK economy, 8.6% of the country’s total economic output. With this in mind, it’s easy to see why businesses are looking to Finance Directors (FD) to drive growth. But is your business ready to take the plunge and hire a Finance Director?
What is a Finance Director and what do they do for a company?
It’s not particularly hard to decipher what the role of an FD entails – they provide direction for all finance activities and services a company uses. Specifically – according to Indeed,
“A Finance Director, or Head Finance Officer, works at the executive level of a company and helps make long-term financial decisions regarding the company’s future. Their duties include analysing departmental finances, creating a company budget and ensuring the financial health and stability of the company.”
As the title suggests, an FD is part of the senior executive level at any business, and their role is both operational and strategic for the company. While they manage accounting and financial control functions, they also establish a financial strategy for the profitable long-term growth of the company.
The benefits of having a Finance Director on staff
Over the years, the role of an FD has evolved from solely being the director of the financial department to becoming an overall commercial leader of the business they work for and the CEO’s right-hand (wo)man and strategic advisor.
Alongside some of the obvious skills required to be an FD, certain ‘soft skills’ have been integrated into the role’s repertoire over time. FDs now often manage the behaviours, relationships and expectations of all stakeholders and shareholders involved in the company and are commonly the public face of the business.
But it’s not just the shareholders they get stuck into, they’re closer to the customer than ever before – they understand where the money is made, how to drive growth and create value, and they understand that much of this information lies within the customer journey.
The benefits of hiring an FD on your payroll are vast and often include ensuring that the company:
- Achieves its business goals by providing advice and guidance on financial strategies
- Meets all financial targets by developing and controlling the company’s annual operating budget
- Is regulatory compliant from a financial standpoint through the development of internal audit programmes
- Operates efficiently and receives the best value by managing external contracts and services
How to determine if your business needs a Finance Director
FDs aren’t just for large corporations, small businesses benefit from them greatly too. If the cost is a concern, then we’ll get to why it shouldn’t be later. For now, if you’re umming and ahhing as to whether you need an FD for another reason, then ask yourself the following questions:
- Does my accountant/ finance team struggle to keep on top of the books?
- Is that person/ team spending all their time updating spreadsheets?
- Is my team attempting but failing to implement new processes and strategies?
If you’ve answered yes to any of the above, chances are, the person or persons in control of your business’ finances aren’t able to focus their attention on the important stuff, like finding new avenues for revenue growth or making smart investments. And if that rings true for you, then you probably need an FD.
What to look for when hiring a Finance Director
All in all, there are tonnes of different qualities to look out for when hiring a good FD but there are five characteristics that stand out above the rest…
Financial insights need to be drawn from a good knowledge base to make a positive impact on a business. A well-informed perspective paired with the ability to apply commercial thinking to financial planning and strategies is an indicative sign of an FD’s effectiveness.
Nobody likes to point out errors, but that’s a well sought-after trait of a good FD – having the confidence to point out the flaws of a business’ financial endeavours. Likewise, as companies worldwide turn to their FD to take on the role of the public face of the company, the confidence to perform is another admirable trait.
Staying up-to-date with new industry trends, changing consumer demands, new investment opportunities, innovative technology and new law, processes and compliance regulations is just one way an effective FD will help to ensure your business is and remains futureproof.
Data presentation doesn’t just refer to presenting data to the board of directors to influence a decision. It needs to be done in a clear and communicative way to be truly effective. Breaking down complex data and ideas into manageable points that are then communicated clearly to the audience in front of them is a clear sign of a stellar FD.
A well-structured and managed financial team and employee retention should be at the top of the to-do list of an FD. Making the best hiring decisions for the business and ensuring a cohesive financial team are just a couple of ways FD can help drive performance and motivate teams.
How to work with your new Finance Director
Now that you’ve hired a good FD – how do you work with them? You need to integrate them into your financial team as soon as possible so that they can start auditing and evaluating your business to find and plug the gaps Ensure they have all – and access to – the information and resources they might need to achieve this. Furthermore, encourage greater employee cooperation by having your new FD set up meetings with individual team members and departments to get to know them better and keep employees happy and on-side.
Best practices for financial management within a company
Once your new FD is settled and bringing value to the company, it’s time to look at some of the best practices associated with the financial management of your business.
Go beyond the single product/ service
An FDs bread and butter is revenue growth. If your company only offers a single product or service that brings in revenue, your FD is going to want to change that. They don’t like to keep all the business’ eggs in one basket and will often seek out opportunities and avenues for improved revenue and growth.
Focus on CX
Every FD knows that the customer experience is king. They are more involved in customer satisfaction and retention than ever before. Nowadays, once brand loyal customers are only one dissatisfied experience away from churning to the competition. Here, the role of the FD is to ensure the business is putting its money where it matters most along the customer journey.
Use the right tech stack
Part of an FDs job is to improve internal financial processes and procedures. One simple way to do this is by ensuring the company they’re hired by is leveraging the right technology that frees up cost, time and resources so employees can drive more value.
Part-time or full-time Finance Director?
Now, let’s circle back to why cost shouldn’t be a deciding factor.
Hiring a part-time FD has all the benefits associated with hiring full-time, with half the costs. Leadership Services offers part-time FDs that are highly skilled in managing your business’s financial needs on a part-time basis, which means delivering the same results as a full-time Director in significantly less time. It’s an affordable model that SMEs can leverage to access top-level finance experts at a significantly lower cost than hiring full-time staff.
Is your business looking for a Finance Director but not sure where to turn to get the most value? Then, talk to one of the experts from Leadership Services today.