Mike Firman of Firman Financial Solutions is seeing a rise in the number of SME’s that are engaging finance directors (FD’s) on a part-time basis…
The Part Time FD will spend an agreed number of days at the business every month, combining high-level accountancy and financial skills with commercial experience that can help a business fulfil its potential.
If your company needs to spend more money to grow, finding the cash will be far easier if you’ve got an experienced finance director who can talk to banks and funders, prepare the business for investment and work on financial business plans and forecasts.
The FD is there to help you make decisions based on financial analysis, rather than simply functioning as a bookkeeper. Indeed, given that the majority of companies will already have a bookkeeper or accounts administrator handling the day-to-day number crunching, what they really want from an FD is someone who can take the numbers and add value.
Very often a business owner won’t be getting the financial information needed. That’s because the numbers provided by the bookkeeper tend to be historical. What the FD can do is interpret those numbers and help you move the business forward.
An FD’s presence can also influence the external perception of your business.
If investors or lenders see good management, a strategic plan and robust financial control, they tend to be very reassured.
The cost of employing a full time FD can be prohibitive whereas a part-timer in the North East may charge between £400 and £800 a day, depending on experience, location and the nature of the assignment.
If the arrangement extends to a few days a month, that’s considerably cheaper than employing someone at say £60,000 to £120,000 a year. The Part Time FD tends to work with businesses turning over between £1m and £20m a year.
There are many reasons why a business might seek to take on a Part Time FD. It could be in response to a particular problem. For instance, increasing sales could be causing cash flow problems and creating the need for stronger systems and controls, or it could be that the business has hit a difficult period and requires expert help to turn fortunes around.
People often come to me ahead of a project, such as raising finance or capital investment.
Whatever the reason, it’s important that the business owner has a clear understanding of why an FD is needed and what it expects them to deliver. The brief may advise on fundraising issues, and once that has been resolved, there might be no further requirement. In other cases, the client will require an ongoing service of Financial Management from the Part Time FD.
The engagement contract offered should allow a business to change the number of days required from the consultant according to needs at any given time. The role can be very flexible.