Despite the growing trend for outsourcing financial leadership to third parties, many business owners don’t yet understand the benefits of contracting a part-time FD to take care of their financial strategy – nor do they know precisely what kind of role this individual can play in their firm.
In part one of our series, How an outsourced finance director fits into your organisation, we’ll talk you through the role that third party CFOs like us can play in smaller companies with little to no existing finance function.
What are the challenges facing smaller businesses without a finance team?
Smaller outfits – for example, those turning over less than £3 million per year – often don’t have a finance team. They may outsource much of their financial activity to an external bookkeeper or accountant, but they rarely have these skills in-house. So, much of the time, it’s down to the business owner or one of the business partners to look after the day-to-day financial admin, on top of all their other wide-ranging responsibilities.
Tasks typically range from managing billing and collections to taking care of bank reconciliations and keeping an eye on the balance sheet. Depending on the knowledge of the individual – and, indeed, how much time they have in their busy schedules – they may also manage payroll, submit their own tax return, and produce various financial reports to help them track their fiscal progress, including Profit & Loss reports and cashflow statements.
For the average entrepreneur, these duties are not a joy – they are a chore. These individuals are unlikely to have had meaningful financial training and may just be picking things up as they go along, which means they won’t have a great deal of confidence in what they’re doing (and why they’re doing it).
Plus, business owners are fighting all kinds of fires, all the time. They don’t have enough hours in the day as it is. They should quite rightly be focusing on the tasks within their business that are going to help them deliver a better service to their customers, source new leads, and bring in more revenue – not poring over their books in a bid to make sense of what all these numbers really mean.
How can an outsourced finance director fit into your smaller organisation?
If you’re identifying with much of the above, don’t panic.
Help can be at hand in the form of an outsourced FD who can take away much of the daily strain and, even better, add real value in terms of more robust financial leadership and direction.
Three key benefits of investing in support from a finance professional are:
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You’ll improve your cashflow visibility
You’re probably thinking of approaching Dartcell because you have become aware that cashflow is an issue, but you don’t know how to keep more money in your organisation, or how to place it into the right areas to increase profits and fuel growth. Our part-time FDs can help you manage debt, locate idle cash, and make decisions that are going to drive your business forward knowing that you won’t run out of funds. You will sleep better knowing that your finances are under control.
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You’ll start concentrating more on your longer-term vision
It’s all too easy to get caught up in short-term projections, “keeping things ticking over”, and unable to see the wood for the trees. Your CFO will shift your thinking away from the here and now, and help you put together three- to five-year forecasts so you can see where you are going. Importantly, your FD will help hold the business accountable to ensure it is moving in the right direction.
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You’ll free up a lot of your time for other things
Forget feeling overwhelmed by your financial responsibilities, worrying that you lack the skills to keep your finances up to date, or just finding it impossible to make your finances a priority. Our team will take all those time-consuming financial tasks off your desk, leaving you to focus on the things you truly enjoy within your business.
Contact us today to discuss your circumstances in more detail and see if you might benefit from our help.
If you run a larger or more established business, check back to our Resources section next month to read the second article in this series, which will discuss how outsourced finance directors can support companies with existing finance staff or departments.