What A Finance Director Can Do for Your Company

You might think a Finance Director’s role is confined to traditional finance activities, but today’s FD (or CFO) can do so much more than count beans.

In the past, an FD’s responsibilities might have been confined to high-level accounting such as providing timely financial statements and monthly management reports, managing investments and expenses, monitoring cash flow, and managing risk. But as the business landscape has become more complex over the past decade, the role of an FD has changed.

That change is due to factors such as the global financial crisis—the biggest since the Great Depression of the 1930s, disrupted and volatile markets, the rise of big data, and the impact of digital and social media.

As a result, CEOs and their Boards expect so much more from CFOs, according to a KPMG report.[1]

“CEOs are increasingly looking to their finance leaders to help drive wider business strategies,” says Simon Dergel, author of ‘Guide to CFO Success’. [2]

They expect FDs to make decisions and shape their plans based on the company’s ambitions, he says. As the keeper of the company’s data with an understanding of every department’s objectives and performance, they can play an active role in refining and aligning business strategies.

“Perhaps the biggest change in terms of the CFO’s role in business today is that their advice is not only valued—it is necessary,” says Dergel.

“Businesses are currently dealing with a wave of disruptive competitors and fast-changing customer expectations, while also managing a global talent shortage and volatile financial conditions. The wisdom and experience of finance leaders make them indispensable in the boardroom as companies look to tackle one of the most uncertain economic periods in decades.”

Most importantly, CFOs are delivering on these expectations. The new breed of FDs is now much more forward-looking. They wear three ‘hats’ at any given time: financial expert, active management team member, and leader of the finance function.

Given the opportunity, they can perform multiple roles within a company, working both on and in the business. Not only can they direct financial performance and protect the financial integrity of the company but they can also drive strategy.

This is borne out by James Riley, the Group Finance Director and Executive Director of Jardine Matheson Holdings Ltd., who says, “A good CFO should be at the elbow of the CEO, ready to support and challenge him/her in leading the business.

“The CFO should, above all, be a good communicator—to the board on the performance of the business and the issues it is facing; to his/her peers in getting across key information and concepts to facilitate discussion and decision making; and to subordinates so that they are both efficient and motivated.

“Other priorities for a CFO are to have the strength of character, personality, and intellect. I take it as a given in reaching such a position that an individual would have the requisite technical knowledge and financial skills.” [3]

How Start-Ups and Scale-Ups Benefit

Most start-ups and early-stage growth companies don’t need and can’t afford the services of a full-time FD. But that doesn’t mean they can’t benefit from all that FDs offer. They can access the skills of highly qualified FDs by engaging them on a part-time basis.

Part-time FDs can provide enormous value in terms of strategy and planning for early-stage or scale-up companies. A report from the Financial Executives Research Foundation (FERF) went further: it described their role as “critical to the success of start-up and early-stage growth companies” since they provide key insights. [4]

It found FDs play key roles in not only managing a young and fast-growing company’s finances but also in setting broader strategic goals and establishing and achieving financial and non-financial milestones.

When the company is at a stage when it needs external investment, the part-time FD can manage the process to ensure it raises the right type of funding from the right sources. The part-time FD can also provide more comprehensive reporting as well as manage the relationship with the external investors, whether they are venture capitalists, private investors, or banks.

Part-time FDs also help to establish sound reporting systems and tools that help improve reporting metrics and communications to investors.
They also play a key part in setting and monitoring company strategy and maintaining a balance between investing in growth, building market share and preserving capital for future opportunities.

As they grow, the need for a part-time FD’s financial and strategic acumen becomes more acute, FERF found.

The FD Centre’s part-time FDs bring these skills to every client at a fraction of the cost of their full-time counterparts. For instance, its part-time FDs can:

• Provide you with an overview of your company so that you can make sound decisions about its future.
• Help you to understand your company’s finances.
• Eliminate cash flow problems.
• Identify cost savings within your company.
• Improve your profits.
• Create a realistic business plan and so make better financial decisions.
• Help you and your management team to manage your finances with ease.
• Develop clear strategic objectives.
• Identify your Critical Success Factors and Key Performance Indicators (KPIs).
• Find and arrange to fund.
• Understand your main profit drivers.
• Identify your best customers.
• Sort out your tax position.
• Introduce timely, easy-to-follow management reports.
• Facilitate expansion in your country and into other countries
• Build value to make your company more attractive to investors or buyers

To discover how an FD Centre part-time FD or CFO will help your business, contact us now on 0808 164 8902. To book your free one-to-one call with one of our part-time FDs, click here.

[1] ‘The Changing Role of the Chief Financial Officer’, Mbatha, David, KPMG

[2] ‘What Makes a Great Modern CFO?’, Dergel, Simon, Oracle, https://blogs.oracle.com, June 7, 2017

[3] ‘THE ROLE AND EXPECTATIONS OF A CFO A Global Debate on Preparing Accountants for Finance Leadership’, International Federation of Accountants, www.ifac.org, 2013

[4] ‘Center Of The Storm: The CFO’s Role In Start-ups And Rapidly Growing Companies’, Financial Executives Research Foundation, www.financialexecutives.org, March 28, 2017