Do you really need a full-time FD for your business, even if you can afford one?
With all the technology and resources available today, small to medium-sized businesses can easily handle the day-to-day financial management by using cloud based accounting systems and experienced book keepers and accountants.
With the daily routines looked after, a full-time FD may not have enough to do and it also avoids the heavy cost. The annual cost of an experienced full-time FD can run to a six figure sum including payroll taxes and benefits.
However, every business needs serious financial advice and input from time to time and as the business grows this need becomes acute. An experienced FD can deal with ailing cashflows, strategy and business planning, fund-raising, acquisitions, exit strategy and also look after HR, IT and legal issues.
This is where the services of an experienced part-time FD can add instant value to your business. Here are some of the virtues of having a part-time FD:
1. Gives the entrepreneur time to develop and grow the business – by agreeing a list of tasks with a part-time FD, the entrepreneur free up time to focus on growing the business
2. Grows with the business – can increase their time as the business grows up to the point where it needs someone full-time
3. Impact on working capital and cashflow management – can have an immediate impact of ensuring that working capital is managed effectively and increase cashflows
4. Monitor performance on a timely basis – can ensure that regular monthly management accounts with quality information is produced
5. Help with strategy and business planning – FD have great experience of preparing these and can ensure that the plans produced are realistic, achievable and includes a credible exit strategy
6. Equity and debt fund-raising – having a FD sit beside you facing potential investors’ to raise funding or with bank adds credibility and gives comfort on the plans being presented
7. Experience – part-time FDs’ have several clients and usually have experience of businesses at different stages of growth to enable them to do this
8. Cost effective – by working from one day per week to a few days per month, the cost of a part-time FD is a fraction of employing someone full-time
Of course, you have to make sure that the person you choose fits in with you and your business and increasingly there are more part-time FDs’ to choose from out there.
The key question to ask is what their long-term objective is for your business and the answer should be to do themselves out of a job by helping you grow the business to the point of you needing a full-time FD!