In small and medium-sized businesses, the role of an experienced Finance Director (FD) is a cost that simply can’t be justified. However, access to a finance director who can develop a deeper understanding of the numbers and to help business owners make the choices that will lead to growth.
You might be wondering how or why? The key ingredient to running a successful business means getting to grips with the numbers. At evirtualfd, we talk about being fluent in financials – that’s no easy task. Looking at numbers is one thing but the numbers tell a story. Quite simply, the role of an FD translates those numbers so that you can really understand the story, take control and make your business more profitable. Let’s be honest, you don’t get out of bed in the morning just to break even. The name of the game is to earn more profit so you can earn more, live more.
So, let’s look at the role of a Finance Director
This is not a simple question to answer. As with everything, the role of an FD has evolved and changed. With cloud technology and a lot of automation available that can make your business more efficient, it’s become less about number crunching and producing balance sheets.
The role of an FD is about acting on the story, looking at strategies, uncovering potential, opportunity cost, risk and pricing. As with the life cycle of any business, the focus of an FD may be different for a startup, a growing or mature business. For a small and medium-sized business, it might not warrant a full-time role. However, with access to the right tools and insight, you can achieve the results that are possible. So what’s the solution?
Benefits of a virtual FD
There are advantages of strategic financial resources without the investment of a full-time salary. Not only is it more affordable, it gives a small business the strategic financial support it needs. A virtual fd will be more laser focussed on the task at hand. By not getting caught up in the day to day operations and office life, your FD can be solely focused on the numbers and there will be set timeframes for strategic sessions. We all know how effective we can be when working to a deadline!
Until such a time that a business is large enough, has the revenue and profitability to support a full-time Finance Director, a virtual fd can focus on the priorities of the business owner and what keeps you awake at night.
Often a virtual FD has a fresh pair of eyes from the early stages but also by working intermittently on the business. Focus can be on cash-flow strategies, looking at profitability and finding strategies for growth – sometimes that can be to increase sales but to look at margins and other areas of growth. Something business owners don’t often have the time to step back and look at the numbers and understand the story.
Being virtual by nature implies that there will online based working. As part of onboarding an evirtual fd, your systems will move to cloud-based technology, many parts of your accounting procedures will be automated – your virtual fd will spend less time number crunching and inputting data and more time supporting you strategically.
What makes an outstanding FD?
For an FD to be effective and outstanding, he or she must have a clear sense of what drives profit and cash in your business. You can think of an FD as your second in command, being a soundboard to make decisions based on logical, financial data and someone who is willing to challenge things.
It’s important for an FD to help you plan for the future and always have a contingency in place. A sense of curiosity to find out what’s behind the numbers and be able to communicate the story is integral.
Whether you’re interested in working with your own virtual FD or you’re interested in becoming a virtual FD, get in touch to speak to one of our experts today.