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Could your business benefit from a virtual finance director?

We wouldn’t blame you if you haven’t heard of a virtual finance director before. Finance directors only tend to be found in large organisations, right? Well, this is where you would be wrong actually. Finance directors are a useful resource to have for businesses of any size and at every step of the way. However, a full-time finance director is not right for everyone. If you are a small and developing business, you don’t want additional overheads that could end up being quite costly without bringing in any money at the same time. With the exponential rise in small businesses over the last few years, this is where virtual finance directors are useful and can help businesses flourish at low cost. We explore the role of virtual finance directors, how they can help your business, and look at what the key signs are that the time may be right for you to bring one in.

What do virtual finance directors do?

They do a number of things, including:

  • Looking after all financial issues within your organisation. This involves putting accounting systems into place where they may not yet exist, and preparing financial forecasts at regular intervals.
  • Preparing annual budgets.
  • Provide business support with information and advice related to the financial aspects of the business – for example, which elements are likely to be more/less profitable, the associated costs involved with implementation of new ideas, products, and services, etc.
  • Recruitment of a financial team and staff when you are ready to take that step.
  • Managing remuneration planning, which are linked to forecasting and budgeting for your business
  • Financial negotiations with other organisations – clients, partners, and suppliers.
  • Contractual reviews to ensure that they are financially sound.
  • Tax planning keeping you on track with all your legal tax obligations.

When do you need to bring in a virtual finance director?

There are a few key milestones in any business which will not only benefit from the input of an experienced finance director, but which arguably should not proceed without their involvement to make sure that the decisions are timely and sound. They include:

  • Time to grow. Many small businesses are set up by entrepreneurs or people who are very successful in their chosen field. They may, however, not have the financial planning in place to make them happen successfully and to consider the potential pitfalls and ways of dealing with them.
  • Cash flow problems. Your business may be growing but this may not be reflected in your cash flow. A finance director will identify where the problems may lie.
  • Process control and management. A good finance director can put into place lean process management systems to help improve productivity without impacting the time required for back office processes.
  • Costs and profit management. While you may have great ideas for growing your business, you may not always know how to cost them properly or how to put in place cost/profit analyses to help you determine whether or not they are worth pursuing.

Do you think you may need a virtual finance director? Talk to us at Hammonds Accountants and we can advise when it is the right time to take the next step for your business. We are on the phone on 020 8249 6328 as well as on email at when you need us.